BC’s minimum wage will jump from $16.75 an hour to $17.40 on June 1 — the highest of all Canadian provinces. But will it hurt more than it helps?
BC’s minimum wage is set to increase again on Saturday, reigniting what has become an annual debate about who gains and who loses when labor costs rise — a subject even economists don’t agree upon.
In keeping with inflation, BC’s minimum wage will jump 65 cents, or four per cent, to $17.40 an hour from $16.75, the highest of all Canadian provinces. By comparison, Ontario’s minimum wage will go up to $17.20 in October, while Alberta’s hasn’t budgeted from $15 since it was set in 2018.
According to a press release issued when the BC government tied minimum wage increases to inflation this year, “minimum-wage earners will be able to count on increases every year” on June 1.
While some people say that isn’t enough for a province where many people spend half their income on housing, others claim it will harm businesses and consumers. There’s a lack of consensus among experts, too.
Simon Fraser University professor Andrey Pavlov said economists are generally “not excited” about cost increases because they weaken demand. When wages rise, businesses might cut jobs, start to rely on technology instead of workers, or look at relocating to a place where labor is cheaper.
All of that can hurt the province’s lowest earners, making minimum wage increases “very counterproductive,” said the professor at the Beedie School of Business.
Mandated wage increases could eventually make it harder for low-skilled workers to find jobs, particularly as they come on the heels of other government measures like the carbon tax and short-term rental bans that could drive businesses out of the province.
Pavlov said he supports the idea of a living wage, but he sees a “disagreement on how to get there.” He favors creating an environment for business to thrive, thereby increasing demand for labor and higher wages in turn.
Other experts believe lifting more people out of poverty benefits everyone. Almost a decade ago, University of BC economics professor David Green published an article debunking claims that increases at that time would lead to “massive job losses.”
While many people pictured teenagers living with their parents as the beneficiaries of minimum-wage hikes, he said the majority of those impacted were women older than 20 who worked full-time for large corporations.
An analysis released this week by the Canadian Center for Policy Alternatives, a group that advocates for a living wage, found the same to be true. Using Statistics Canada data, researchers determined half of the racialized women working in Metro Vancouver earned less than the region’s living wage of $25.68 per hour in 2023, while about 413,100 workers across the province earned less than $20 an hour — about 18 per cent of all paid employees.
The group defines a living wage as the hourly rate that full-time workers need to support a family.
But Richmond restaurant owner David Chung said the issue is more complex. If businesses pass on costs to consumers, as he might have to do, it hurts everyone, including people who hold minimum-wage jobs.
The president of the BC Asian Restaurant Cafe Owners Association said he expected to see job losses and restaurants closing.
“It’s going to happen with the way things are going.”
After BC’s minimum wage increased by seven per hundred last year, Chung said he was forced to raise prices at his restaurant, Jade Seafood. But he noticed customers continued to spend the same amount on a meal — about $100 — although they ate less or ordered differently.
“Tips go up again and again. And then food, too. How much more can people take?” he asked.
BC’s minimum wage increase will force Jimmy Tham to consider a tough question: How much can he raise the price of tutoring services before parents can’t afford it anymore?
The owner of Sylvan Learning was forced to close his West Vancouver center this week. As he struggles to keep the others going and pay off pandemic-related loans, he’s been approached by staff who make more than minimum wage seeking raises.
“It’s a domino effect,” he said.
He wants to keep prices affordable for parents whose children need help with schoolwork.
“How much can we pass those costs on to the consumer?”
