Economy and Finance

Labour presses for minimum-wage hike

Experts disagree about likelihood of B.C. government following wage-policy lead of cities such as New Westminster
Tue Apr 15, 2014 12:01am PST

Union leaders in British Columbia are calling for an increase in the minimum wage to $15, but opponents say that a further raise would only hurt the people it's supposed to help.

In 2012, B.C. increased the minumum wage from $9.50 to $10.25, making it the second-highest in Canada. The increase marked the last of three that Premier Christy Clark promised in 2011, when the minimum wage was $8.

John Winter, president of the BC Chamber of Commerce, said an increase to $15 would distort the marketplace and produce unintended results.

"What you have to understand is that few businesses are actually involved in paying minimum wages. Those positions are generally for people who are young and looking for part-time jobs, or augmenting a second income. They are not intended to be family-supporting jobs."

Winter said legislating an increase in wages would only raise costs for employers and cause them to hire fewer people, for fewer hours.

The best way for wages to increase is through a strong economy, Winter said.

The call for a wage increase comes only months after the Seattle suburb of SeaTac raised its minimum wage to $15, sparking movements within other U.S. cities to follow suit.

Mark Thompson, a former professor of economics and labour at the University of British Columbia, said SeaTac's wage hike has been positive for Seattle.

"The two candidates for mayor were kind of competing for who could make the most generous promises. So they're talking $15 in Seattle," Thompson said.

Four years ago, the City of New Westminster imposed a living-wage policy that required city employees and contractors to be paid a $13 minimum hourly wage. The wage is dynamic and has since risen to $18 with changing economic conditions.

"It was effective," said Thompson. "It had a more general impact of raising wages for the lower-paid people, and it didn't affect the prices or the employment very much. I looked at that and I said, 'Gee, if I'm an advocate for the living wage, that's a win.' We haven't had a bunch of people laid off, we haven't had inflation, so you're helping the people who are doing necessary jobs for us, without having major disruption in the labour market."

Mike Klassen, president of provincial affairs for B.C. for the Canadian Federation of Independent Business, recommends rejecting legislation like the living-wage policy because it discourages competition, which could raise wages further, among employers.

"We take the view that right now it's a struggle for small businesses to find employees," Klassen said. "That's making some of the wage rates quite competitive."

New Westminster city council member Bill Harper said even before implementing the policy, most contractors were already paid a living wage.

"We see it as setting an example. We hope companies will see the positive aspects of it," Harper said. "The benefit is you get a stable workforce.

"If you're working for minimum wage and you find a job that pays $2 more an hour, you're going to move on."

Harper dismissed concerns that a higher minimum wage for all businesses would make it difficult for new workers to break into a job market that would be hiring less and retaining workers longer.

"What's happening is senior workers are doing training and mentoring. In the process, [younger workers] can see ahead and say, 'Joe over there is going to be gone in a few years; I can sit in his spot.' They can also get that solid mentoring when they leave."

Tags: labour, employment, Christy Clark, John Winter, University of British Columbia, Canadian Federation of Independent Business, BC Chamber of Commerce, inflation, prices, Mike Klassen



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