The new B.C. NDP government will raise the minimum wage by 50 cents an hour in September, and move to a $15-an-hour rate by 2021 — a long-sought move by labour and anti-poverty groups but one met with wary concern in the business sector.
On Sept. 15, the minimum wage will increase to $11.35 an hour, a commitment from the previous Liberal government the NDP will implement. The government will also increase liquor servers’ wages by 50 cents to $10.10 an hour.
Minister of Labour Harry Bains said on Tuesday that the hike this fall is just a “stepping-stone”.
“Raising the minimum wage is only one way the new government will make life more affordable for British Columbians, but it’s an important start,” he said.
Bains said the government listened to business owners and recognized the need for a gradual strategy for increasing wages to minimize the impact on businesses.
“It’s predictable. It’s incremental. (Business owners) can look at their structure and costs ahead of time knowing full well what their costs will be,” he said.
The NDP did not provide a timeline for the gradual implementation of the $15-an-hour rate. It plans to set up a commission that will consult with stakeholders and determine how to increase the hourly minimum wage to $15.
A wage hike to $15-an-hour by 2021 is too much, too soon, for small businesses, said Richard Truscott, the Canadian Federation of Independent Business’s B.C. and Alberta spokesman.
“To get to $15 an hour you’re looking at much larger increases the next four years to get there. We’re talking a dollar or more depending on the implementation schedule,” he said.
Large corporations can use economies of scale or automation to mitigate higher labour costs, but many small businesses would not have the resources to absorb the hike and may have to resort to cutting jobs, foregoing hiring, scaling back on employee hours, or passing along the cost to consumers with higher prices.
“There are adjustments that have to be made. It’s not going to be an easy pill to swallow,” said Truscott, calling on the government to consider a longer phased-in period, perhaps six years, similar to Seattle.
Anita Guberman, CEO of the Surrey Board of Trade, said her group supports a minimum-wage increase tied to the consumer price index, but said small businesses will be impacted by the wage hike.
“We need to be cautious and sensitive and help small business,” said Huberman. “I understand the path (the government is) going down, taking care of citizens, but they also have the opportunity here to take care of business.”
Huberman and Truscott said the government can use other policy levers to soften the blow on small businesses, whether that’s in the form of tax cuts or backing off on other policy changes such as the carbon tax increase or changes to employment rules.
When asked whether the government is considering any mitigating measures, Bains said that will be under consideration when Finance Minister Carole James and Premier John Horgan put together the budget.
Machiko Purse, who works at a hotdog stand in downtown Vancouver, said a $15-an-hour minimum wage is much-needed.
“Vancouver is a very expensive city. Many people are living paycheque to paycheque.” She did wonder, however, whether the cost of goods would also go up, and added “maybe there won’t be much change.”
Originally from Japan, Purse, 42, said she can only afford to make ends meet because her husband also works. “But if I’m a single mom and I have a 10-year-old daughter, it is not possible to live on a minimum wage.”
Connor McRae, an ESL teacher in Vancouver, said he sees both sides of the argument, but his gut reaction is that a $15-an-hour minimum wage is a good thing. “I’d say it comes down to principles and what are your ideals,” he said. “It’s taking care of our people, same thing if you think people deserve the right to health insurance, they deserve the right of a minimum wage that’s livable.”
By CHERYL CHAN