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Mixed reaction to minimum wage increase
Reaction to B.C.’s minimum wage increase is mixed.
While employees looking to make more money are excited, business leaders are taking a more cautious stance.
“It’s not as big an issue as some might have thought. Although, the speed that it’s coming is rather quick,” said David D. Hull, executive director of the Abbotsford Chamber of Commerce.
He admits that an increase was warranted, but said some businesses will have to act quickly to adjust their financial plans.
“If your business doesn’t utilize minimum wage employees, then it really doesn’t matter. However, if you do, then it’s not a lot of time to change your business model.”
Hull said a 20 per cent increase in one year is a “huge difference.”
On Wednesday, new B.C. Premier Christy Clark announced the increase from $8 an hour to $8.75, beginning May 1. The wage will rise to $9.50 on Nov. 1 and finally to $10.25 on May 1, 2012.
However, restaurant and bar employees who serve alcohol will see smaller increases – $8.50, $8.75 and $9 respectively. The smaller increases were put in place because those workers receive tips, which supplement their income.
The $6 training wage has also been eliminated.
Another concern for Hull is the ripple effect that will occur. He explained if a minimum wage employee earns $10.25 next year, middle level employees will also want a raise in their income.
“If a guy making $8 goes to $10, then the guy making $10 will want $12,” said Hull.
And while it puts B.C. back in line with the rest of the country, it would have been preferable to have 50 cent increases spread out over several years.
It’s a different story at the University of the Fraser Valley, where students are cheering the increase as needed and long overdue.
Joel Enns is a 23-year-old student who is currently unemployed. He feels the increase will help struggling students earn a little more spending money.
"You don't want to depend on your parents for everything, or keep mooching from your friends," said Enns. "And by putting more money in people's pockets you put it back into the local economy."
Fellow student Samuel Verghese agrees. The 22-year-old works for the city of Langley and earns more than the minimum. However, he see the value of the increase.
"More money means more opportunities. It allows students to fend for themselves."
Verghese started in the workforce earning the $6 training wage, and then bumping up to the $8 minimum, before landing his job in Langley.
"People should take advantage of the new wage. It's an opportunity I didn't get."
He said with the price of gas, tuition and parking going up, minimum wage had to increase.
Abbotsford South MLA John van Dongen said the increase is “a good start for the new premier,” and shows that the provincial government is listening to the public’s priorities.
“This is going to really help people at the lower end of the economic spectrum,” said van Dongen, adding that a $4,000 annual increase represents “a pretty significant raise.” That will be the difference for minimum wage earners after all three increases come into effect.
Van Dongen said government has consulted widely prior to the decision, and that’s why considerations were made for operators in the restaurant/bar industry.
“It’s important to acknowledge that employers have costs and investment. We’ve tried to strike a balance.”
Of particular interest to Abbotsford’s many farm workers, the Labour ministry will also be reviewing and setting new rates paid to those hand-harvesting berries and fruit, with an eye to bringing them into line with the minimum hourly rate.
When B.C.’s first increase takes affect on May 1, the province will still have the lowest minimum wage in Canada. At $8.75, it will be just under Alberta’s rate of $8.80, the Yukon at $8.93 and New Brunswick, North West Territories and Prince Edward Island, all at $9.
When the final increase occurs on May 1, 2012, B.C.’s wage of $10.25 will be the second highest in Canada, tied with Ontario and behind Nunavet at $11. (figures based on minimum wage rates as of March 17, 2011).
According to government statistics, only 2.3 per cent of B.C.’s workforce earns minimum wage. Of that, 53 per cent are youth living at home while 26 per cent are one member of a couple. Fourteen per cent are unattached individuals and seven per cent are single mothers.
The service sector makes up 92 per cent of all minimum wage workers.
More than half of minimum wage workers have been on the job for one year or less and 55 per cent will move up the wage scale in one year or less.