“Eeyikes.”
That’s the Trail and district chamber’s reaction to the news that B.C. will hike minimum wage to $15.20-an-hour - or higher - by June 2021.
Four increases between June 2018 and 2021 represent a 34 per cent increase over four years.
“Our local response is the same as most rural communities,” says Audry Durham, executive director for the Trail and District Chamber of Commerce.
“The worst piece is the ‘no collaboration’ that seems to be rampant in municipal, provincial and federal governments,” she added. “When an announcement like this hits, the prices have to go up and the customer will make up the difference because supplies and overhead won’t go down.”
Hardest hit will be the service, retail, and tourism industries that provide entry level jobs and training for newcomers and students, said Durham.
Minimum-wage workers had their first 50 cent an hour pay increase in September 2017, and now earn to $11.35 per hour. That upped B.C. from seventh position to the third-highest minimum wage among Canada’s provinces.
The next increase of $1.30 per hour is recommended for June 1.
“The B.C. chamber has been working with the province, so we knew when that first one came up,” said Durham. “It would have been nice for the province to have more input from the business world because 75 per cent of B.C. businesses are small business, and this is really going to affect profit margins.”
She expressed another concern with minimum wage increments, that being jobs at the Trail chamber will no longer be competitive when the mandated hourly rate hits $12.65, likely in June. The gap will keep narrowing when the recommended minimum jumps another $1.20 an hour to $13.85 in 2019, then to $14.60 the following year, and $15.20 in June 2021.
In other words, raising the minimum wage closes the margin for summer student jobs as well as entry level positions at the chamber, which have historically paid a few more dollars per hour than minimum.
“That’s the other thing I think of,” said Durham. “We’ve had summer students forever, they are going to university and need the money, so we top up what the federal government gives us, which is $10.85 an hour,” she added.
“So when the minimum wage goes up we are going to have to look at that, and ask ‘Are we going to be able to be competitive at that point?” Durham questioned.
“And people who have been here for awhile, they are going to be way closer to minimum wage than ever before.”
From a social perspective, raising the minimum to $15 is incredibly important, but doesn’t go far enough, says Morag Carter, The Skill Centre’s executive director.
“The plan is laudable,” said Carter. “But I wouldn’t be doing my job properly if I were to say that it’s enough, it really isn’t.”
Carter was referring to the discrepancy between minimum wage and the Lower Columbia’s living wage, which is $18.21 an hour.
(A living wage is the hourly amount a family needs to earn to cover basic expenses)
“So I think it’s really important to recognize that, when we are paying someone minimum wage, we are still not paying them enough to live on.”
She mentioned the mythology around who is actually working at the bottom of the pay scale.
“It’s not kids living at home, that’s not what is borne out by all the research,” Carter said. “It’s mostly women working minimum wage, it’s women supporting families earning the minimum wage.”
Given that it will take three years to fully implement as the cost of living rises, Carter says low-wage earners will continue their struggle.
“If you’re not earning enough money working 40 hours a week to cover your expenses, which is the gap between living wage and minimum wage, ” she explained. “You’re either ending up deeper in the hole, scrimping on things, working extended hours or having to work multiple jobs to pay the rent and put food on the table.”
Premier John Horgan announced the changes, recommended by the Fair Wages Commission, on Feb. 8.
“Regular, predictable increases to our minimum wage are one important way we can make life more affordable for people,” Horgan said in a news release.
“For too long, the lowest-paid workers in our province have been left to fall behind, with their wages frozen for a decade at a time. That’s not fair and it’s not right. Like all British Columbians, our lowest-paid workers deserve a fair shake and a fair wage.”
The government appointed the Fair Wages Commission last October to deal with the business sector and establish the timing of the minimum wage increases.
The three experts who led the Fair Wages Commission recommended predictable and regular hikes and said the hourly wage rate could be raised to $15.40 an hour by 2021, depending on economic conditions.
“We believe that we have strong economic growth in British Columbia and the commission’s rationale for front-end loading the increases was because we have a robust economy in British Columbia and the expectation is that’s going to continue for the next two years,” Horgan said.
BC Federation of Labour president Irene Lanzinger said she was disappointed it will take over three years to raise the minimum wage to $15.20 an hour, noting Alberta’s increase is expected later this year and Ontario’s in 2019.
“Poverty and inequality are rampant in our province while B.C. is Canada’s most expensive place to live,” Lanzinger said in a statement.
“In light of the slow timeline to achieve $15, we expect that the government will move more decisively in the next phase of its fair wage process around exemptions from the minimum wage, like the punitively lower wages for restaurant servers and farm workers, and the concept of a living wage.”
Notably, it’s not just 50 cents an hour employers are mandated to pay out. Business owners typically pay another 21 to 25 per cent per employee on top of respective wages, such as five per cent toward CPP, two per cent to EI, a minimum four per cent to WCB, and four per cent for both vacation and statutory holiday pay.
As a whole, the BC Chamber of Commerce has called on the province “to maintain certainty and predictability as minimum wage set to rise to by 2021.”
“While front-loading the minimum wage increase will cause challenges for some businesses, the four-year timeline – with projected increases – will help businesses plan and incorporate those costs into their budgets,” said Val Litwin, President and CEO of the BC Chamber of Commerce.
The chamber’s province-wide membership previously called for minimum wage increases to be linked to the Consumer Price Index, so as to bring stability and predictability to these increases and thus protect B.C. businesses from the fallout of sudden, unexpected hikes.
“We support wage increases so employees can keep up with the cost of living,” said Litwin. “We also support increases being announced in advance to ensure businesses are able to adjust. Tying wage increases to CPI going forward provides businesses with the ability to plan and budget, and ensures they will not face large increases in labour costs”
With files from Canadian Press