theQuestion: Is tying the minimum wage increase to inflation a good compromise?*
I think it’s safe to say that a vast majority of British Columbians could use a raise. Many of us work harder and longer than we did just a short time ago, only to earn the same amount or less. So, I don’t agree that those working for minimum wage in this province are the only ones who are feeling the pinch of rising costs and stagnant wages — they shouldn’t be singled out for a $9,880/year raise.
That’s the annual raise full-time minimum wage workers would have gotten if the Fight for $15 Campaign had gotten its way. Poverty activists and big labour have been lobbying governments across North America to raise minimum wages to $15 per hour, and here in B.C. pressure was on the provincial government to join the few jurisdictions that have made the leap.
Activists wanted government to hike the minimum wage by nearly 50%, from the current $10.25 per hour to $15 per hour. But last week they lost the battle when Jobs Minister Shirley Bond announced a $0.20-per-hour increase to the minimum wage, lifting it to $10.45 per hour, plus a commitment that future raises will be tied to increases in the province’s Consumer Price Index. The new wage floor goes in effect this September and yearly increases will be announced each March.
This is a shrewd move by the BC Liberals, both politically and economically. By pegging future increases to the CPI it removes politics from the decision-making process. As the cost of living increases, so too will the minimum wage. This is a fair compromise, which has the benefit of being predictable for both the wage earner and the employer. It allows wages to keep pace with inflation while at the same time providing small businesses a tool to manage labour costs.
Granted, a $0.20-per-hour increase is not a lot. But the proposed $4.75 increase to $15 per hour was entirely unreasonable. According to the government, there are 110,400 workers earning minimum wage and 62,500 (57%) of those are part-time. Meaning, there are 47,900 full-time minimum wage workers in the province.
Since we don’t know how many hours account for all the part-time labour, just calculating the cost of the proposed increase for full-time workers adds up to a whopping $473 million. Factoring in an estimate for part-time workers, the cost to the economy could be close to $750 million per year. That’s some raise.
The provincial economy could not afford to take this kind of hit.