Minimum wage increased by 40 cents in B.C. on Thursday.
Now the general minimum wage sits at $10.85 per hour and the liquor server minimum wage, $9.60. A second raise of 30 cents plus an amount based on the 2016 CPI (Consumer Price Index or inflation, currently estimated to be 10 cents) will go in effect the same date in 2017 - bringing the general minimum wage to at least $11.25 and the liquor server minimum to $10.
So what does this mandated raise mean for a mom-and-pop shop, the local pub or a corner restaurant?
“The concern for small businesses that need minimum wage earners is a double-edged sword,” says Ingrid Hope, a Trail business owner and board member of B.C.’s Small Business Roundtable. “As the province with second lowest minimum wage, it is hard to attract workers from other provinces. And there is a real need for these workers. So a higher wage may help… but the extra cost is not good.”
The higher wage makes it even more difficult for small-business owners to compete with larger enterprises.
“As their expenses go up, typically this increases their prices, so everyone pays,” Hope added. “Or if they are in a highly competitive market, they lose money and go out of business.”
She says 85 per cent of employers already pay higher than minimum wage. But as the minimum wage increases, pressure is added for employers to raise their salaries and stay ahead of the game.
“It was stressed that business can’t handle a large increase at once so they are putting it up in increments with notice, as opposed to leaving it for five years and then jumping it a lot,” Hope noted. “The group (Roundtable) advocated for the Canadian cost of living only, but because B.C. was at the bottom, the government thought the lower wage earners needed a bigger bump.
“The economy in B.C. has been tops in Canada, so all earners should share in that because the CPI in B.C. was higher than the national average.”
Also affecting small business is the fact that minimum wage employees usually come with limited skill sets, so training costs are more extensive.
“That is why increased training allowances were advocated for - to offset the higher wage for an unskilled employee,” Hope explained. “The retail and hospitality industries are really struggling to get employees so there is some extra training allowance for these sectors.”
In the end, the Roundtable gave its opinion then the government takes it from there.
“We were adamant that the increases are gradual and there is notification in advance,” said Hope. “There was no appetite to go all the way to $15 like many are advocating for - employers can only pay so much to earners with no or low skills.”
In May, the province announced it was increasing the minimum wage in two stages, “to better reflect the province’s overall economic growth and ensure all workers benefit from B.C.’s thriving job market.”
The daily rate for live-in home support workers and live-in camp leaders, as well as the monthly rates for resident caretakers and farm worker piece rates (for harvesters of certain fruits and vegetables) will also increase proportionate to the general minimum hourly wage increases on the same dates.
The permanent Small Business Roundtable was established in 2005 to engage in dialogue with small business owners to identify the key issues and opportunities facing small businesses in B.C., and to develop recommendations for small business and government on strategies to enhance small business growth and success.
The Roundtable is chaired by the Minister responsible for small business. Board members are recognized as leaders in their community and represent all regions of the province.