It’s a black-and-white world for advocates of an hourly $15 minimum wage in British Columbia. Down at the payroll office of your local small business, however, there are far more shades of grey.
Members of the black-and-white brigade argue, among other things, that B.C. is now a laggard in the minimum wage sweepstakes, having fallen to last among the country’s provinces with its $10.45 hourly rate.
Anti-poverty advocates also maintain that a higher base rate for low-skilled workers will help reduce income inequality.
According to a recent Insights West survey, those sentiments are gaining traction with British Columbians, too. That’s understandable. Who would begrudge a raise for low-paid workers?
For starters: those who’ll be on the hook for paying it. Add in: economists who argue that raising a region’s minimum wage does little to address core poverty issues. There’s also some basic business math to consider in such sectors as the restaurant industry, where profit margins are notoriously thin.
According to the BC Restaurant & Food Services Association’s CEO (“Poll shows rising support in B.C. for $15 minimum wage” – Business in Vancouver issue 1379; April 5-11), raising the province’s minimum wage to just $10.75 for a restaurant with $300,000 in annual labour costs would add $6,000 to that bill.
Economists elsewhere in North America are similarly unenthusiastic about the $15 minimum wage movement.
According to a University of New Hampshire Survey Center poll of economists conducted for the Employment Policies Institute, 83% of respondents said a $15 hourly federal minimum wage would hurt youth employment; 67% said it would make it harder for companies with fewer than 50 employees to stay in business.
Rather than engaging in more politically motivated labour-market price fixing by arbitrarily raising human resources costs for private businesses, government should reduce the tax burden for workers at the lower end of the pay scale to allow them to keep more of what they’re paid in the first place.
