Getting a raise is always a bonus but it is particularly welcoming for thousands of B.C. workers struggling to survive in Canada’s most expensive province.
Yet for small business owners, the added expense of an increase in the provincial minimum wage may prove costly for all.
Premier Christy Clark announced the increase Wednesday to $10.25 per hour from $8, to be implemented in three stages by May 1, 2012. The bump will take B.C. from the lowest to one of the highest minimum wages in the country.
“I think it’s a good thing, obviously long overdue,” said Steelworkers Local 9705 spokesman Chuck Macklon.
The first hike of 75 cents will take effect May 1 and the training wage of $6 will be dumped making the minimum wage even across the board – unless you work in the restaurant or bar industry.
“I don’t think too much of the server wage, I guess they limited that,” said Macklon.
Servers’ minimum wage will be capped at $9 an hour, effective May 1, due to the potential income gained through gratuities.
“You can’t count on tips, they go up and down with the economy, so it just makes it harder for those people.”
Still the longtime union advocate is happy with the abolition of the $6 per hour training wage, as is 16-year-old student Kelcee Bjarnason of Fruitvale.
As a relatively new part-time employee at a local grocery store, Bjarnason is making $7 an hour, less than minimum wage but more than the training wage. In just over a month, she’ll see her wage increase 25 per cent.
“That’s pretty nice,” said the Grade 10, J. L. Crowe student who works at the store about 20 hours per week. “It will definitely help saving for my (post-secondary) education.”
George Penfold, regional innovation chair for rural economic development at Selkirk College, also sees the increase helping out the younger demographic.
“Given that 60 per cent of the folks on minimum wage are 25 and under, it certainly helps with respect to the college’s interest and the broader community’s interest in keeping younger people in school and getting them into training and developing their skills – it’s a costly thing to do,” said Penfold.
But despite the boost, others suggest it may also have a negative economic impact in the long term.
Trail Chamber of Commerce president Ron Clarke has been in contact with the B.C. chamber offering Trail businesses’ input in expectation of the increase.
“It wasn’t a big shock although we did not know the timing and the size of it, which appears fairly quick and fairly significant in dollar value,” said Clarke.
The Trail business owner also voiced concern that the increase in minimum wage may also bump up higher wage earners.
“The minimum wage is an arbitrary figure because the marketplace doesn’t determine what that figure is . . . if you are a supporter of minimum wage, then there is a catch-up, but in my opinion this hike should be viewed in isolation,” said Clarke.
The increased expense for business owners may eventually either lead to layoffs, reduced hours or costs downloaded onto consumers that may effectively eliminate any real gain, he added.
But as far as equity is concerned, the increase has been a long time coming: the minimum wage has not been adjusted since November 2001.
“Like any economic change there is good and bad,” said Penfold. “If you look at what has happened with individual tax-filer income, it went up almost 30 per cent between 2001 and 2008, which is about this scale - that includes the folks on minimum wage that did not experience that increase, so this is catch-up, it is equity.”
The second increase will occur Nov. 1 to $9.50 and May 1, 2012 to $10.25.
“By May of 2012, in terms of general cost of living, folks on minimum wage are likely to be no better off than they were in 2001,” said Penfold.