In June, the Liberal Government in BC committed to moving ahead with a 40 cent increase in the minimum wage on September 15, 2016, followed by another 40 cent increase in the fall of 2017. Not to be outdone, the provincial NDP party recently introduced its own pledge to increase the regulated floor on wages to $15 an hour by the end of their first term if they win the May 2017 election. This would represent a huge 40 plus per cent increase from BC’s current $10.45 an hour rate.
The plan does not take into the economic realities facing a shaky Canadian and global economy. Many small business owners’ simply cannot absorb such big increases in payroll costs. The NDP proposal amounts to over a dollar increase to the minimum wage every year between 2017 and 2021. Add on additional payroll taxes, like CPP, EI, and WCB which are based upon those minimum wage rates and many small businesses will be pushed to the limit. Further, big hikes in the minimum wage impact more than just businesses with those entry level jobs. It places upward pressure across a businesses’ payroll as the effective wage-floor jumps.
Proponents of a $15 an hour minimum wage argue seniors and single parents need to be paid more. In reality, however, those individuals make up a tiny fraction of those earning minimum wage. Therefore, there are clearly much more effective ways to target them than an across-the-board hike in the minimum wage. Here are the facts on minimum wage earners:
- In 2015, only 5 per cent of employees in BC earned minimum wage;
- Of that small slice, only 2.1 per cent are single parents and 2.9 per cent are seniors;
- One third of small business owners’ effectively make less than $15 an hour.
The reality is there are better ways to help low-income working British Columbians, such as raising the Basic Personal Exemption (BPE) so that all low-wage earners pay less of their earnings in taxes.
Business owners who are concerned by the impact a $15 minimum wage should sign and fax the action alert on this page to 604-684-0529