Minimum wage needs scrutiny
Sometimes, it’s a good thing when a new government retreats from a campaign promise.
The New Democrats’ election platform promised to increase the minimum wage to $15 an hour by 2021.
Instead, influenced by its Green allies, the government has referred the issue to an independent Fair Wages Commission.
It has 90 days to make a recommendation on how — and how quickly — to move to a $15 minimum from the current $11.35.
Governments too often play politics with these kinds of issues.
The former BC Liberal government refused to increase the minimum wage for a decade, as employees fell further and further behind, then played catch-up ahead of the 2013 election.
The commission is well-balanced. Marjorie Griffin Cohen, a left-leaning economist, is the chair, and is joined by Ken Peacock from the B.C. Business Council and Ivan Limpright of the United Food and Commercial Workers Union. (Though a person with recent experience living on minimum wage would have been a useful addition.)
And it will play a critical role in a debate typically dominated by interest groups that wildly overstate the benefits or risks of an increase.
For example, when the Liberal government announced a three-step, 28 per cent increase in the minimum wage in 2011, the Canadian Federation of Independent Business predicted 32,760 to 199,560 lost jobs. The Fraser Institute projected job losses of 26,097 to 57,194.
In fact, employment increased by 2.2 per cent in the 16 months after the first increase, compared with national growth of 1.3 per cent.
There are legitimate arguments for and against. Higher minimum wages could lead businesses to invest in automation, for example. But the computer-ordering stations popping up in fast-food restaurants remind us that they will do that in any case.
The commission has the opportunity to look at facts, and the way any change would affect the 94,000 people — almost half of them over 25 — being paid minimum wage.
The commission also has a mandate to look at the relationship between the minimum wage and the “living wage.” That is an important issue.
Our society and economy suffer when the gap between what it costs to live in a community and wages become too great — as the increasing number of “Help Wanted” signs indicate.
The 90-day timeline for the commission’s first report is tight. But there is a large amount of research available, and advocacy groups prepared to present arguments on both sides.
Ultimately, the legislature will decide on how much and how quickly to increase the minimum wage.
How quickly is a critical issue as businesses need time to prepare and plan.
But its decision will be based on a serious, independent review of the costs and benefits, not on political calculations in the premier’s office.