Today (May 4), Premier Christy Clark announced the province’s minimum wage will receive two sizable increases above what was previously planned. The move marks a significant break from policies unveiled last year.
This September, B.C.’s minimum wage will rise from $10.45 an hour to $10.85. Then, in September 2017, it will jump again, to $11.25 an hour.
“One of the first actions I took when I became premier was to raise the minimum wage,” Clark said, quoted in a media release. “Raising the minimum wage twice over the next two years, coupled with some targeted supports for young people and businesses, will help everyone share in the benefits of our growing economy.”
Taken together, those bumps amount to more than double the increases that were previously planned for implementation by 2017.
In March 2015, Jobs Minister Shirley Bond announced a new provincial policy that would see the minimum wage tied to the consumer price index (CPI), an economic indicator similar to inflation.
That would have seen B.C.’s lowest income earners receive a raise of just 10 cents each year, far below the two 40-cent increases that Clark announced today.
Clark claimed the government is introducing the unexpected increases because the province has a strong economy that will allow small-business owners to swallow the bumps in payroll expenses. But there’s more to it than that.
The Straight has reported extensively on the decision-making process behind the March 2015 announcement. Through more than 10 freedom-of-information requests filed over several months, it was uncovered that the government made a serious error in calculating how it would set a new minimum wage and adjust it going forward.
Along with the peg to the CPI, in March 2015, the province also delivered an initial increase to the minimum wage, of 20 cents.
There were two stated reasons behind these changes.
The first was to deliver an element of predictability that business leaders had requested. Instead of large increases at infrequent but unpredictable dates, businesses could plan for steady and regular adjustments.
A second stated rationale was to move B.C.’s minimum wage up in its ranking against those of the country’s other 12 provinces and territories. Clark said that she wanted B.C.’s minimum wage to fall somewhere in the middle.
After the March 2015 announcement, the first objective was achieved but the second was not.
That was the result of a mistake, emails obtained by the Straight reveal.
A confidential cabinet submission states that an initial 20-cent increase plus a peg to the CPI would raise B.C.’s minimum wage to the middle of the pack. But that’s incorrect. Bureaucrats in the Ministry of Jobs failed to sufficiently account for other jurisdictions’ planned increases.
Just about every province and territory ties their minimum wage to an economic indicator like inflation. That means that when B.C. similarly pegged its minimum wage to the CPI after an initial increase of only 20 cents, it remained at a spot near the very bottom of the pack, rather than at a position halfway up the ladder.
In between the March 2015 announcement and the September 2015 implementation of the new system, the provincial government became aware of its error, but did nothing to fix it.
In June, government emails show, civil servants in the Ministry of Jobs learned that 20 cents was not enough to accomplish Clark’s stated goal. But in September, the province still went ahead with the increase as planned, knowing it would not change B.C.’s rank below the other provinces.
“I’ll take the blame for only just discovering this now,” wrote Jake Ayers, a senior policy adviser with the B.C. Jobs Ministry, on June 29, 2015.
With today’s news that B.C.’s minimum wage will rise to $11.25 by September 2017, that mistake is corrected and Clark's promise is on track for delivery.
Since this morning’s announcement, however, reactions have been mixed.
The B.C. Federation of Labour issued a media release claiming that even after the two 40-cent increases, people earning the minimum wage in B.C. will still live below the poverty line.
“This is just one more missed opportunity for the premier and the government to do what’s right,” said B.C. Fed president Irene Lanzinger, quoted there.
The B.C. Fed has repeatedly called for a $15-an-hour minimum wage.
The B.C. Chamber of Commerce (BCCC) similarly issued a statement expressing dissatisfaction, though for different reasons. Its release criticizes the government for breaking from the regular increases and policy based on predictability announced in March 2015.
“For our businesses, the bottom line is the need for certainty and predictability,” said BCCC interim CEO Maureen Kirkbride. “Quite simply, we need to take the politics out of minimum wage increases.”
According to the government's May 4 release, the policy change will affect some 93,700 people who earn the minimum wage, 43 percent of whom are over the age of 24.