Campaign comes on the heels of moves by some U.S. cities
The BC Federation of Labour has launched a campaign called "Fight for $15" in an effort to increase the minimum wage rate in British Columbia to $15 an hour.
The general minimum wage rate has been $10.25 since May 2012. The rate for liquor servers is $9 per hour. To date, the provincial government has not announced any rate changes.
"Raising the minimum wage is an important piece of reducing poverty levels in British Columbia," says Irene Lanzinger, president of the federation, which represents more than 500,000 members from affiliated unions in the province. She adds that an increase to $15 would take minimum wage workers’ pay to about 10 per cent above the poverty line in the province.
To promote the campaign, the federation is sponsoring an event highlighting a minimum wage issue on the 15th day of every month this year. It has also started a petition to get the government to raise the rate. So far, the petition has garnered more than 21,000 signatures.
The campaign follows an unsuccessful initiative last year by the Ontario Federation of Labour to get the government there to raise the wage to $14.
On a national level, federal Opposition Leader Thomas Mulcair has promised that, if elected, an NDP government would implement a $15-an-hour minimum wage for federally regulated employees. Since 1996, federal workers have been subject to the minimum wage rate in effect in the province or territory in which they work. While a change to the federal rate would not mandate provincial/territorial changes, it could set a standard for other governments in Canada, say labour groups.
The push for a $15 minimum wage has made headway in the United States. Last year, Seattle and San Francisco passed laws that will gradually raise the minimum wage in those cities to $15 and then index it to the rate of inflation.
In Seattle, the government will phase in the rate increase over a number of years, beginning next month. The timeframe for complying will depend on an employer’s size and whether it funds the cost of medical benefits for employees.
Businesses with more than 500 employees that do not contribute to the cost of employees’ health-care benefits (at at least the "silver" level as defined in the Affordable Care Act) must pay a minimum wage of $15 an hour by Jan. 1, 2017. Employers that contribute to the cost of the health benefits will have an extra year to get to $15.
For businesses with fewer than 500 employees, the $15 minimum wage will be phased in over four to six years, depending on whether employers pay tips or medical care benefits. Employers who pay only a flat, hourly wage rate will have to reach $15 an hour by Jan. 1, 2019.
Small businesses that pay reportable tips or pay towards employees’ health-care benefits can include those payments in employees’ wages to reach the $15 requirement by Jan. 1, 2021. Employers will be able to include tips and health-care benefits in minimum wage calculations until 2025.
In San Francisco, the $15 minimum wage will be phased in over three years, with two rate hikes this year (January and May) and annual increases in 2016, 2017 and 2018.
In Canada, the BC Chamber of Commerce has called the $15 proposal irresponsible, saying it could hurt small businesses and workers. In a statement, it said: "Raising the minimum wage to $15 would raise labour costs by almost 50 per cent. When this is added to the 28 per cent minimum wage hike that B.C. has already seen since 2011, the cost pressure on many businesses would be untenable."
The Canadian Federation of Independent Business (CFIB) says its research shows minimum wage increases hurt the people they are meant to help. In a 2011 study, it concluded a 10 per cent increase in the minimum wage across all provinces would lead to job loss between 92,300 and 321,300 jobs.
"In order to deal with increased wage costs, many employers must cut back hours or can’t hire another employee. This usually means having fewer entry level positions, which are frequently filled by youth," the CFIB says in a statement.
"The big winners when minimum wages rise are the unions pushing the policy," the statement says. "They win because if the new floor for wages is $15 an hour, it creates pressure to increase wages throughout the system. The employee who was making $10.25 is now making $15, so what does the employee who was making $15 want?"
Research by the Canadian Centre for Policy Alternatives (CCPA) shows different results. In a study released last October, the CCPA looked at the relationship between minimum wages and employment in all provinces between 1983 and 2012 and found almost no evidence wage hikes affected jobs.
"In 90 per cent of cases, we found no connection whatsoever between higher minimum wages and employment levels. And in the remaining 10 per cent, the evidence was split," says the study’s co-author Jim Stanford, an economist with the private-sector union Unifor.
"What really drives employment is whether there is purchasing power in the economy to buy the stuff that workers make."
David Green, a professor in the Vancouver School of Economics at the University of British Columbia, says it is important to get past the rhetoric and have a real conversation about the pros and cons of implementing policies, such as minimum wage changes, to reduce poverty.
"The problem with the minimum wage debate is that the people who are against it act like the costs are infinite and the people in favour of it act like the costs are zero."
He says academic literature shows minimum wage hikes do have some effect on teenage employment, but almost zero effect for other age groups. If minimum wage went up by 10 per cent, Green says it would cause teenage employment to drop by three per cent, but there would be virtually no impact for people in other age groups.
The problem, he says, is that the data is based on smaller minimum wage changes than the $15 proposal would bring.
"The key here, when you think about going to a $15 minimum wage, is to realize that in the past, the minimum wage changes that we have had have been in the range of 40 to 50 per cent of the median wage," Green says.
"Let’s say we’re talking about a change now from $10 to $11 in B.C. It would still keep it in that range. That means that the estimates that we have would predict that there would be some impact on teenage unemployment and not much of anything on anyone else," he says.
"If you talk about going to a $15 minimum wage, now you are talking about a minimum wage that is more like over 60 per cent of the median wage. We’re out of the range of the estimates that we have for minimum wage effects. Would there be broader employment effects? There probably would, but they would probably be of a size such that the total wage bill going to workers would still increase."
Although the B.C. government has not said whether it is considering a rate hike, when labour groups called for a $13 minimum wage a few years ago, Premier Christy Clark said the increase could hurt employment in the province.
In most jurisdictions, the general minimum wage rate is between $10 and $11 an hour, with the lowest in Alberta ($10.20) and British Columbia and the highest ($11) in Ontario and Nunavut.
A number of Canadian jurisdictions have begun to tie minimum wage rates to economic indicators such as a consumer price index or the average industrial wage and raise them every year. Alberta, Nova Scotia and Yukon do this. Beginning this year, Ontario and Saskatchewan will index their rates.
Although not indexed, minimum wage rates are also going up this year in Newfoundland and Labrador, the Northwest Territories, Prince Edward Island and Quebec.
Lanzinger says a problem with the minimum wage in B.C. is that, unlike other provinces that have minimum wage boards or annual indexation, there is no established process for raising it.
"We have always advocated for a process where business, labour and government sit down together every year and the minimum wage gets raised annually."
Lanzinger adds that although indexation is a good idea, the federation is against doing it right now "because then you would be indexing poverty. The current minimum wage is well below the poverty line," she says.
"The problem right now is that we need a really big bump and then we need an annual process because we haven’t raised it in such a long time."
