Mar 31, 2010

BC’s minimum wage is now 22% lower than Ontario’s


Today, thousands of low wage workers in Ontario are getting a raise of 75 cent per hour, as the province’s minimum wage goes up to $10.25. This makes Ontario the first province to pass the $10 mark, but several other provinces are following closely. Newfoundland’s minimum wage will increase to $10 in July, as will New Brunswick’s next fall. Others, like Alberta and the Yukon have their minimum wages indexed to increases in the average wage or inflation, so low paid workers there will also get a raise come April 1.

While Ontario and these other provinces have a reason to celebrate, British Columbians should be embarrassed by our government’s inaction on the minimum wage front. Here a complete minimum wage freeze has been the name of the game for over eight years now. As Jim Stanford aptly summarizes in his column in the Globe and Mail:

Since taking office, B.C. Premier Gordon Campbell has taken his province from champ to chump in the low-wage sweepstakes. In 2001, B.C. had Canada’s highest minimum wage ($8). Today, it’s the lowest – still $8. In that time, inflation eroded the purchasing power of B.C. minimum wage workers by almost 20 per cent; Mr. Campbell made things worse with a new super-low minimum of $6 for new hires.

Our $8 minimum wage now is 22% lower than Ontario’s, which means that the annual income of a full-time, full-year minimum wage worker in BC is more than one fifth smaller than the income they could be earning working a minimum wage job in Ontario. And the cost of living here is on par, if not higher than Ontario. Consider, for example, average housing prices which are 30% higher in BC than in Ontario. I haven’t seen comparisons of rental costs between the two provinces, but I doubt the difference is any less striking.

It’s time to raise the minimum wage in BC. Not just because other provinces are doing it, but because it is the right thing to do. One simply cannot live on $8 per hour in this province in 2010.

Can small business afford it on the heels of the recession? Small businesses in the rest of Canada are able to pay higher wages and BC businesses are no less profitable or creative, so they should be able to afford them too.

For those worried about potential unemployment arising from a minimum wage increase – rest assured; there is no evidence that increased minimum wages in the rest of Canada has had significant disemployment effects. On the flip side, there is also no evidence to suggest that BC has done better in terms of youth employment as a result of keeping our minimum wage so low for years. As Jim Stanford explains:

In free-market theory, this should have made B.C. a nirvana for low-wage workers (especially young people). In reality, B.C.’s tight-fisted approach didn’t stop youth employment from falling faster, and the youth unemployment rate from rising further, than any other province as the recession hit in 2009. So much for the virtues of a flexible “free market.”

A minimum wage increase in BC is much needed and the provincial government is running out excuses for denying our lowest-paid workers a raise. The rest of Canada is leading by example, it’s time for the BC government to follow suit.

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