Minimum wage victory — where to go next?

Last week, Advanced Education, Skills and Labour Minister Al Hawkins announced that the provincial government was going to increase the minimum wage from $11 to $11.15 an hour, and minimum wage overtime rates to $16.73 — 1.5 times the minimum wage rate. This will take place on April 1st of this year. In addition, all futures increases will take place on April 1st and be based on a percentage change in the national Consumer Price Index and if it decreases, the minimum wage will not decrease.

I am going to touch on a couple of things here. The concept of tying minimum wage to the national Consumer Price Index, provincial Consumer Price Index or inflation is not a new idea. Many jurisdictions have or are having conversations about implementing a policy like this — which is fantastic, because this is a progressive step forward for minimum-wage increases, a great balance between the needs of the employer and employee, and a win for people who work in a minimum-wage job.

With all of that being said, let’s get down to the basics. Why is this a win for people who work in a minimum wage job? Tying minimum wage and the national Consumer Price Index stops minimum-wage earners from falling behind on the cost of goods and services over time. This was a big issue with the ad hoc or arbitrary minimum-wage increases of the past. Earners would fall behind over time and not get back to that level, until the House of Assembly was able to vote on a specific minimumwage increase, which may not be substantial enough to help minimum-wage earners at the end of the day.

Why is this a great balance between the needs of the employer and the employee? Indexing and implementing future changes of the minimum wage on April 1st allows businesses to prepare for their increase in liabilities and gives them the proper time to get their businesses ready for future minimum-wage increases.

Restaurants Canada (which represents more than 30,000 industry members), for example, has applauded the decision, saying: “Tying wage increases to the Consumer Price Index will create transparency and predictability that will allow the industry to protect and grow job opportunities.”

In addition, all four Atlantic provinces — Nova Scotia, Prince Edward Island, New Brunswick and, after we implement the new wage — will have harmonized our minimum wage increases to April 1st. This enables businesses that operate throughout Atlantic Canada and elsewhere to be better informed and, in addition, encourages the expansion of more business into and between Atlantic provinces.

Why is this is a progressive step forward for minimum wage increases? This eliminates the negotiation, the conflict and the tardiness of ad hoc minimum wage increasing and implements a system that benefits employer and employee equally, without politics interfering in the progress.

The last thing I want to touch on is what to do next. We are reforming minimum wage in our province, now where do we go from here? What do we do to further help the hardworking minimum-wage earners?

We need to keep the concept of balance in our thoughts — balance between wages and costs going up. With that in mind, I think a conversation about a way to put more money in the hands of all taxpayers is beneficial. I think the idea of increasing personal exemption on your income taxes — effectively putting more money back into your pockets — in an interesting idea that is worth exploring.

In conclusion, the provincial government is delivering strong reform for the employers and employees of this province. Last week’s announcement is a great victory, but it is only a step in the reforms needed for improving the quality of life for minimum-wage earners.

I am looking forward to taking part in the conversation to strengthen our social services to better serve the people who benefit from them.

Matthew Babb Vice-president and director of finance Newfoundland and Labrador Memorial University Young Liberals St. John’s