The debate on whether or not to raise minimum wage rages on
This year, 11 jurisdictions in Canada raised their minimum wages.
Only Ontario and Newfoundland and Labrador had minimum wages that remained stagnant throughout 2011, with British Columbia and Prince Edward Island even having multiple increases.
And there’s no shortage of opinions on what an increase in the lowest wages means for the country.
Increased minimum wages are good politics but bad social policy, said Marilyn Braun-Pollon, the vice-president of Saskatchewan and agri-business for the Canadian Federation of Independent Business (CFIB), who is based in Regina.
“I think, when you look at minimum wage decisions, they make for great politics and they are very popular but it leaves small business owners picking up the tab so it makes for great politics but lousy public policy.”
The CFIB released a report in February called Minimum Wage: Reframing the Debate, which challenges the overall effectiveness of minimum wage policy in Canada. The report says tax relief is a better way to help low income earners than wage increases.
“Minimum wage increases hurt the very people they are supposed to help,” said Braun-Pollon.
Bumps in minimum wages force business owners to decrease hours and training, put future hiring plans on hold or raise prices, she said.
“At at time when the economy is at a point where we’ve got a level of uncertainty right across the country, the last thing that we should be doing is increasing the cost of doing business in a challenging time for many business owners.”
“We agree that low income earners should make more, it’s how we put more money in their pockets, without jeopardizing the ability of business owners to grow and expand,” she said. “The government should exhaust all their avenues on the tax front and on the training front before they even consider a minimum wage increase.”
Niels Veldhuis, the Vancouver-based vice-president of research at the Fraser Institute, has a similar opinion to Braun-Pollon.
“An increase in the minimum wage has dramatic negative effect on a particular subset of the population and that is certainly true for young, low skilled individuals,” he said.
More specifically the group Veldhuis is referring to is ages 16 to 24.
“What we’re doing is taking opportunities away from our young individuals to gain some experience in the labour market.”
This is a common argument Iglika Ivanova, economist and public interest researcher at the Canadian Centre for Policy Alternatives based in Vancouver, said she comes up against.
Usually the argument is the people earning minimum wage are teenagers living at home and it really wouldn’t affect poverty, she said.
“But the numbers we looked at show that this isn’t the case,” she said.
“There are a lot of young people that earn minimum wage but there is also a substantial group of adults, 40 per cent of all minimum wage earners, that are over 25.”
Tuition rates and student debt levels are steadily increasing, so young people and teenagers filling these jobs and going to school have to be able to make reasonable wages, she said.
“Even if it was teenagers we should think about increasing minimum wage,” she said.
And a lot of minimum wage earners are women, she said.
“So some people say they are secondary earners, their husband earns more, but I really think that’s not an appropriate way to look at it, because a lot of women who have problems with things like family violence cannot leave their husbands if they cannot support themselves.”
Ivanova wrote a paper in early 2011 called Myths and Facts About the Minimum Wage in B.C., which argued the minimum wage in the province, at $8, was too low and should be raised to as at least meet Ontario’s minimum of $10.25 an hour.
Since then the wage in the province has gone up to $10.
“We’re happy that the minimum wage increased,” she said. “We used to hold the record for the longest time for which minimum wage was frozen. Almost 10 years.”
The locked wage stayed stagnant too long, she said.
“It just seemed unreasonable that over 10 years there would be no increase in the minimum wage, while every other province was increasing theirs,” she said, adding inflation was eating into the material value of the wage during that period.
Keeping it frozen for that long is unacceptable because the living standards of the people earning that wage will fall, she said.
Veldhuis is concerned about the current situation in B.C. In the early 1990s the province hadn’t increased the wage in about five years. Then in 1995 and 1996 there were two 50 cent increases.
“So substantial increases,” he said. “Much like the same that’s happening now.”
That period of time has been much-researched and documented by academics — those two increases had a substantial negative impact on the amount of opportunities in the job market, said Veldhuis.
“This is just going to be a case of history repeating itself,” he said.
Ivanova is advocating for regularly scheduled increases in B.C. tied to an economic indicator like inflation.
This already happens in the Yukon and Alberta, where wage increases are tied to inflation and average wages, she said.
This would save B.C. and others from having to have drastic increases over a short period of time, she said.
“So, as a result in order to bring it up to some reasonable level, we had to see quite large increases and that kind of thing is difficult for businesses,” she said. “If you have regularly scheduled annual increases then you would never be in that situation again.”
It will benefit business by bringing them clarity and giving them the ability to plan for increases and help workers by ensuring their earnings do not fall during periods of inflation, Ivanova said.
“In a way this takes the politics out of minimum wages if you had some mechanism of adjusting it,” she said.
But the CFIB is opposed to tying minimum wages to economic indicators, said Braun-Pollon.
“You’re really assuming affordability every year and certainly it doesn’t reflect the current market conditions because it’s based on trailing indicators,” she said.
Only Ontario and Newfoundland and Labrador had minimum wages that remained stagnant throughout 2011, with British Columbia and Prince Edward Island even having multiple increases.
And there’s no shortage of opinions on what an increase in the lowest wages means for the country.
Increased minimum wages are good politics but bad social policy, said Marilyn Braun-Pollon, the vice-president of Saskatchewan and agri-business for the Canadian Federation of Independent Business (CFIB), who is based in Regina.
“I think, when you look at minimum wage decisions, they make for great politics and they are very popular but it leaves small business owners picking up the tab so it makes for great politics but lousy public policy.”
The CFIB released a report in February called Minimum Wage: Reframing the Debate, which challenges the overall effectiveness of minimum wage policy in Canada. The report says tax relief is a better way to help low income earners than wage increases.
“Minimum wage increases hurt the very people they are supposed to help,” said Braun-Pollon.
Bumps in minimum wages force business owners to decrease hours and training, put future hiring plans on hold or raise prices, she said.
“At at time when the economy is at a point where we’ve got a level of uncertainty right across the country, the last thing that we should be doing is increasing the cost of doing business in a challenging time for many business owners.”
“We agree that low income earners should make more, it’s how we put more money in their pockets, without jeopardizing the ability of business owners to grow and expand,” she said. “The government should exhaust all their avenues on the tax front and on the training front before they even consider a minimum wage increase.”
Niels Veldhuis, the Vancouver-based vice-president of research at the Fraser Institute, has a similar opinion to Braun-Pollon.
“An increase in the minimum wage has dramatic negative effect on a particular subset of the population and that is certainly true for young, low skilled individuals,” he said.
More specifically the group Veldhuis is referring to is ages 16 to 24.
“What we’re doing is taking opportunities away from our young individuals to gain some experience in the labour market.”
This is a common argument Iglika Ivanova, economist and public interest researcher at the Canadian Centre for Policy Alternatives based in Vancouver, said she comes up against.
Usually the argument is the people earning minimum wage are teenagers living at home and it really wouldn’t affect poverty, she said.
“But the numbers we looked at show that this isn’t the case,” she said.
“There are a lot of young people that earn minimum wage but there is also a substantial group of adults, 40 per cent of all minimum wage earners, that are over 25.”
Tuition rates and student debt levels are steadily increasing, so young people and teenagers filling these jobs and going to school have to be able to make reasonable wages, she said.
“Even if it was teenagers we should think about increasing minimum wage,” she said.
And a lot of minimum wage earners are women, she said.
“So some people say they are secondary earners, their husband earns more, but I really think that’s not an appropriate way to look at it, because a lot of women who have problems with things like family violence cannot leave their husbands if they cannot support themselves.”
Ivanova wrote a paper in early 2011 called Myths and Facts About the Minimum Wage in B.C., which argued the minimum wage in the province, at $8, was too low and should be raised to as at least meet Ontario’s minimum of $10.25 an hour.
Since then the wage in the province has gone up to $10.
“We’re happy that the minimum wage increased,” she said. “We used to hold the record for the longest time for which minimum wage was frozen. Almost 10 years.”
The locked wage stayed stagnant too long, she said.
“It just seemed unreasonable that over 10 years there would be no increase in the minimum wage, while every other province was increasing theirs,” she said, adding inflation was eating into the material value of the wage during that period.
Keeping it frozen for that long is unacceptable because the living standards of the people earning that wage will fall, she said.
Veldhuis is concerned about the current situation in B.C. In the early 1990s the province hadn’t increased the wage in about five years. Then in 1995 and 1996 there were two 50 cent increases.
“So substantial increases,” he said. “Much like the same that’s happening now.”
That period of time has been much-researched and documented by academics — those two increases had a substantial negative impact on the amount of opportunities in the job market, said Veldhuis.
“This is just going to be a case of history repeating itself,” he said.
Ivanova is advocating for regularly scheduled increases in B.C. tied to an economic indicator like inflation.
This already happens in the Yukon and Alberta, where wage increases are tied to inflation and average wages, she said.
This would save B.C. and others from having to have drastic increases over a short period of time, she said.
“So, as a result in order to bring it up to some reasonable level, we had to see quite large increases and that kind of thing is difficult for businesses,” she said. “If you have regularly scheduled annual increases then you would never be in that situation again.”
It will benefit business by bringing them clarity and giving them the ability to plan for increases and help workers by ensuring their earnings do not fall during periods of inflation, Ivanova said.
“In a way this takes the politics out of minimum wages if you had some mechanism of adjusting it,” she said.
But the CFIB is opposed to tying minimum wages to economic indicators, said Braun-Pollon.
“You’re really assuming affordability every year and certainly it doesn’t reflect the current market conditions because it’s based on trailing indicators,” she said.
