Premier Christy Clark’s recent declaration that her government won’t impose a minimum-wage hike to $15 because it would hurt small businesses has raised questions about what the economic impact would be.
The B.C. Federation of Labour is pushing for the wage increase, arguing that $15 would put B.C. employees 10-per-cent above Statistics Canada’s low-income cutoff.
But last week, Ms. Clark rejected that position, saying the economy is too fragile and small businesses, which are “huge job creators,” need to be protected.
However, based on results in other jurisdictions, it’s unclear whether increasing the minimum wage would actually reduce jobs.
In the United States, a handful of communities already have a $15 minimum wage for some workers. SeaTac, a suburb of Seattle whose economy is centres on the Seattle-Tacoma International Airport, increased its minimum wage for such large employers as airport hotels to $15 in 2013.
SeaTac Mayor Mia Gregerson said despite dire warnings from employers, she doesn’t know of any businesses that had to close or reduce planned expansions. “The sky didn’t fall,” she said. “There was no apocalypse.”
Still, SeaTac’s wage hike only applied to about 1,000 workers. For a large-scale experiment, many are looking to Seattle, which voted in June, 2014, to increase minimum wage gradually to $15.
Karina Bull, a senior policy analyst with the Seattle Office for Civil Rights, said businesses are concerned.
“They’re trying to think of ways to do it and remain competitive,” she said. “They’re asking how they will absorb the cost of paying higher prices for labour.”
But she said most business owners she’s spoken to are not talking about cutting jobs. “I’ve talked to over 300 employers … and I’ve received a handful of messages that are expressing that sentiment. I see our economy growing.”
That perspective is supported by recent research from the Canadian Centre for Policy Alternatives, which found almost no evidence that minimum-wage increases hurt jobs. The study analyzed data from all 10 Canadian provinces between 1980 and 2012.
“In the vast majority of cases, we found no connection whatsoever between minimum wage and the level of employment,” said Jim Stanford, an economist with Unifor who co-authored the report.
Mr. Stanford said higher wages give people more spending power, which can offset the additional cost to businesses. He said B.C.’s minimum wage should be gradually increased to $15, despite Ms. Clark’s comments.
“Why is the economy fragile?” he said. “One of the reasons it’s fragile is because of stagnant household income and growing inequality. A growing minimum wage is a good way to address those things.”
For those currently living on B.C.’s minimum wage of $10.25, Ms. Clark’s promise to find “a predictable way for the minimum wage to go up” offers little comfort.
Michelle Benson, a single mother with a 12-year-old son on the autism spectrum, said she was “infuriated” by the Premier’s comments. “My life is too fragile for it not to be $15,” she said.
Ms. Benson lives in Silverton, B.C. She has a university degree and used to be a youth worker before her son’s condition made it impossible for her to work regular hours. She now makes minimum wage working part-time at a convenience store. The job allows her to stay home on days when her son can’t manage school, but it’s often hard to put food on the table.
“Once I got into my profession, I never thought I’d be working for $10 again in my life,” she said. “The reality is, we sit down for meals and I eat less than my son.”
Viveca Ellis, co-founder of B.C.’s Single Mothers’ Alliance, said single parents often choose to stay on income assistance rather than enter the workforce.
A 2014 report from First Call, a B.C. youth advocacy coalition, found that a single parent on income assistance makes $17,490 a year, compared with $18,655 working full-time on minimum wage. But Ms. Ellis said child care can easily eat up half that amount, making it more expensive to work than to stay home.
“They get stuck on assistance because there’s no way out,” she said. “Minimum wage being so low really creates a vicious cycle of poverty.”Report Typo/Error
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