B.C.’s minimum wage went up to $17.40 per hour on June 1, but it still leaves hundreds of thousands short of earning a living wage, according to an economist, who has co-published a new report.
“The statistics clearly show who these workers are,” Iglika Ivanova, senior economist with the Canadian Centre for Policy Alternatives, British Columbia, said. “The majority are over the age of 25, with women and racialized workers disproportionately affected.”
The report — which CCPA co-published with Living Wage for Families BC — shows that more than a third of paid employees (740,000 people) earn less than the living wage in their community. The living wage is the hourly rate that each of two parents working full-time must earn to support a family of four in their community. The report tracking 20 cities and regions appears on the eve of the minimum wage rising by 65 cents according to new legislation tying future increases to inflation.
“In the current affordability crisis, workers are stuck in the gap between the living wage and the minimum wage and face impossible choices — buy groceries or heat the house, keep up with bills or pay the rent on time,” Anastasia French, provincial manager of Living Wage for Families BC, said.
The gap between the living wage and the new minimum wage is smallest in the northeastern community of Dawson Creek: $3.14. This gap increases heading south and reaches its peak in Metro Vancouver and Greater Victoria, where the difference exceeds $8 per hour.
“I think we need to close the gap from both sides, both in terms of raising wages, but also we need to curb some of the costs and provide more support in that kind of social infrastructure way,” Ivanova said.
The report recommends raising the minimum wage to $20 per hour to narrow the gap. That would benefit more than 400,000 people across B.C.
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The report also recommends additional investments in public transit to cut costs and calls for an “affordable food strategy” combined with “more generous income supports.” It also calls for additional investments in housing.
“(We) are in a full-blown housing crisis and have been for a good decade…if not more,” Ivanova said. “It’s across the country and we still haven’t seen government step up quite to the scale that is necessary to do something about it, to actually move the dial.”
Ivanova acknowledged recent efforts, but said it would take a “few years” to yield results.
Calls for a living wage or a basic guaranteed income are not new, but coincide with business concerns about excessive bureaucracy and rising costs in B.C.
When government announced that it would tie future minimum wage increases to inflation, the B.C. Chamber of Commerce welcomed the certainty. But chamber president Fiona Famulak also said “we cannot overlook the fact that the cost of doing business in British Columbia is high and business are struggling” in urging government to find “balance.” She also warned about the knock-on-effects of a rising minimum wage, which sets the “floor” for all wages.
Ivanova said some her report’s recommendations would help boost the economy.
“For example, affordable housing is a huge issue that employers are facing,” she said. The cost of housing — not the minimum wage — is often a key reason why employers struggle to fill jobs, she added. “When you give very low-income more people, they are going to spend it and that boosts the economy,” she said.
Ivanova acknowledged higher wages would impact the bottom lines, but wages are only one part of the cost-equation.
“Small businesses need more support and we can look at different ways to support them, but it shouldn’t be at the expense of the lowest-paid workers.”
B.C.’s Labour Minister Harry Bains said his government has made “consistent increases” to the minimum wage since 2017 to prevent the lowest paid workers from falling behind.
“The minimum wage had been frozen for most of a decade and was one of the lowest in Canada as recently as 2016,” he said. “With this latest increase, it will continue as the highest of all provinces.”
