Time to take a look at minimum wage

Try living on the minimum wage of $8/hour in British Columbia and see how far it gets you. Worse, try living on the ‘training wage’ of $6/hour and see where that takes you. Calculate the monthly wage and it’s a no brainer that anyone on minimum wage can’t afford to put a roof over their head and food on the table. And don’t even try to factor in hydro, telephone, transportation, medical, clothing – or the cost of having kids.

It’s long past time to raise the minimum wage, something the Canadian Centre for Policy Alternatives currently advocates.

In a recent report entitled Myths and Facts about the Minimum Wage in B.C.,  Iglika Ivanova recommends that the provincial government immediately increase the minimum wage to $10/hour, set stage increases that bring the minimum wage up to the poverty line within a year (using Statistics Canada’s before-tax low income cut off (LICO)), legislate annual increases tied to inflation, and eliminate the $6 training wage.

Good call.

At today’s cost of living no one can live independently in a city earning $8/hour. When that minimum wage was introduced in 2001 it was the highest in Canada. But since then other provinces have increased their minimum wage levels to adjust for inflation leaving this province now at the bottom of the rankings. Stats Canada draws the poverty line at an annual wage of $22,229 based on 2009 figures, the latest published LICO calculation which is equivalent to a wage of $11.11/hour based on a 40 hour week 50 weeks of the year.

On the other side of the fence, the Canadian Federation of Independent Business cries foul. They argue that small businesses can be adversely affected by an increase in the minimum wage. They said in their own report that if the minimum wage was increased employers would feel compelled to increase wages for all employees leading to increases in payroll taxes, CPP contributions and other overheads.

But Ivanova debunks that as one of the myths in her report. She argues that “Employment levels in any economy, including BC’s, are determined by a number of factors and minimum wages are a very small player overall.” She lists the economic outlook, commodity prices, the value of the Canadian dollar and global demand for our products all having bigger impacts on the labour market than minimum wage hikes. Besides, she argues, there is no evidence that minimum wage increases in other provinces resulted in loss of jobs.

Another myth Ivanova diffused is that few people actually earn minimum wage. While only 2.3 per cent of B.C.’s workers actually earn $8, over 13 per cent of all employees in the province earn under $10/hour. That’s over 250,000 people.

The harsh reality for low income wage earners is the fact that they can’t get ahead enough to live independently. According to Ivanova, in 2006 44 per cent of workers between 20 and 30 still lived with their parents compared to 32 per cent in 1986. She pointed out that while the minimum wage has been frozen for over nine years, the cost of living in B.C. has increased over 18 per cent.

Today, the cost of living continues to stubbornly increase in rental housing, food, and transportation. Alarm bells are already ringing that food, clothing and gas are set to spike upwards this summer in a perfect storm of supply, demand and a warming world wreaking havoc on weather patterns affecting agricultural production worldwide.

Both George Abbott and Mike de Jong, candidates in the Liberal Party leadership vote later this week, have policies to review the minimum wage with public consultation. After a nine-year freeze, it’s long overdue.

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