A New Brunswick economist says there is merit to the idea of boosting the province’s minimum wage to a whopping $12 an hour.

The minimum wage is set to go up by 25 cents in July, to $7.25 an hour. That sparked a weekend editorial in the Telegraph-Journal newspaper calling on the province to legislate a $5-an-hour increase instead, and to do it as soon as possible. The editorial came as a surprise to some, since the highest minimum wage in the country is $8.50, in Nunavut. And the highest provincial rate is just $8 per hour.

But University of New Brunswick, Saint John economist Rod Hill says he likes the idea, arguing that such a dramatic increase would keep young people in the province, encourage immigration, and lift many out of poverty.

“They make the point, which I think is a reasonable point, that an increase in minimum wages, and a very substantial one, could actually increase total spending in the economy,” Hill said.

But neither the editorial nor Hill’s argument persuades Ian Munro, director of research at the Atlantic Institute for Market Studies, a business-oriented think tank.

“It is a pretty simple concept,” Munro said. “The price of something goes up, you’re going to have less of it. So [if] the price of labour goes up, less labour will be employed.”

Munro points to research by Ontario academics which, he says, shows a 10 per cent increase in minimum wage would tend to result in a three per cent drop in employment.

Hill said he disagrees. “Those claims are rubbish,” he said. “Conventional wisdom among economists has changed in the last 10 years or so.”