B.C.’s new $10.45 minimum wage will rank among lowest in Canada

On September 15, British Columbia’s minimum wage increased by 20 cents, to $10.45 an hour. There was no press conference. Since the hike was announced last March, the government has barely said a word about it. That’s despite Premier Christy Clark having personally championed a higher minimum wage.

Just days after assuming office in 2011, for example, Clark pledged to keep B.C.’s minimum wage out of the gutter where her predecessor, Gordon Campbell, had left it at $8 an hour for a decade.

“We’re not going to be number one in the country by any stretch,” Clark said on CKNW radio on March 17, 2011. “But we’re going to be catching up. We won’t be at the bottom anymore.”

That promise held for a couple of years after Clark raised the minimum wage to $10.25 in 2012, Irene Lanzinger told the Georgia Straight. But the president of the B.C. Federation of Labour quickly added Clark’s commitment is about to be broken and stay that way.

Lanzinger explained that when one ranks B.C. alongside Canada’s other provinces and territories, B.C.’s minimum wage will soon drop all the way down to 12th out of 13 jurisdictions in the country. She noted that’s according to the federal Labour Program, which has compiled forthcoming changes scheduled for implementation before the end of 2015.

A federal document states five provinces are about to implement their own wage hikes effective October 1. Those are Alberta (going to $11.20), Manitoba ($11), Newfoundland and Labrador ($10.50), Ontario ($11.25), and Saskatchewan ($10.50). In addition, Lanzinger noted New Brunswick has committed to an $11 minimum wage by 2017, which means B.C. could soon rank dead last.

Lanzinger said an insufficient increase to the minimum wage is half the problem. The other half, she continued, is that B.C. simultaneously pegged the province’s minimum wage to the Consumer Price Index (CPI), a statistical estimate similar to a measure of inflation.

By itself, Lanzinger said, that would be a good thing that provides predictability to both employees and employers. However, she asserted, tying the minimum wage to the CPI coupled with that modest bump of 20 cents means the bottom of the country is where B.C.’s new minimum wage will remain.

“We are essentially indexing poverty,” she said. “We’ve got people earning poverty wages at our current minimum wage, and they will never get out of poverty. If you are going to peg it to something, you need to raise it above the poverty line first.”

The B.C. Ministry of Jobs, Tourism and Skills Training didn’t make a representative available for an interview.

Opponents of a higher minimum wage often claim it’s an issue that’s largely confined to young people on their way to higher-paying jobs.

According to a government analysis obtained via a freedom-of-information request, in 2013 there were 120,400 British Columbians earning the minimum wage. Of those, 47 percent, or 56,100, were 25 years or older. The ministry’s March 12 news release announcing the change to $10.45 states there were then only 110,400 British Columbians earning the minimum wage. However, those revised statistics leave out how many are older than 24.

One of those people is Laura Cairns. She’s in her early 50s, living with her daughter in a one-bedroom apartment in New Westminster.

A decade ago, Cairns recounted, she worked as an office manager and earned double the minimum wage. Then her parents got sick and she was forced to leave the workforce to take care of them.

“I stepped out of the mainstream economy to look after my parents and now that I’ve stepped back in, I’m forced back to minimum wage,” she said.

Today, Cairns works temporary jobs in warehouses or cleaning construction sites.

“People look down on me now because I am a low-wage earner,” Cairns said. “I’m used to people’s opinions and judgments. But it’s very demoralizing.”

When Lanzinger claimed B.C.’s new minimum wage will keep British Columbians like Cairns in poverty, she wasn’t spouting rhetoric. In B.C., everybody who survives on the minimum wage and who resides in a city of more than 500,000 people officially lives in poverty.

According to Statistics Canada data, the 2014 poverty line in a metropolitan area like Vancouver was a before-tax income of $24,328 a year.

If Cairns works 40 hours a week for $10.45 an hour, she’ll earn $21,736 a year, falling $2,592 short of breaking even with the poverty line.

The bar is lower for rural areas. But for the estimated 60,000 minimum-wage earners living in Metro Vancouver, the Straight calculated what’s needed to raise them out of poverty is a minimum wage of $11.70 an hour.

Iglika Ivanova is a senior economist with the Canadian Centre for Policy Alternatives’ B.C. office. In a telephone interview, she said her organization has called for a $15 minimum wage because that’s what’s needed to truly constitute a living wage. But she emphasized even the Straight’s conservative estimate of $11.70 is more than a full dollar above B.C.’s new minimum.

“You can dispute whether that’s $12 an hour or closer to $14, depending on how you do the calculation and what you say is a full week’s work,” Ivanova explained. “But whatever you say, hundreds of thousands of people are living in poverty here in B.C. And this 20-cent increase will not bring them out of that.”

Ivanova called attention to the province’s rationale for tying the new wage to the CPI. Like Lanzinger, she agreed its predictability is a good idea in principle. But Ivanova warned tying future increases to a formula could see the government use that as an excuse to avoid revisiting the $10.45 benchmark as something that might be too low.

“We will be stuck at the bottom again,” she said.