As B.C. awaits minimum wage increase, businesses say hikes shouldn't be tied to inflation

B.C. increased the minimum wage by 2.8 per cent last June. The increase is the first to be tied to B.C.’s annual inflation rate. A local chamber of commerce is concerned another increase tied to inflation will be hard on many businesses.

As businesses wait to hear the province’s decision on an increase to the minimum wage, a local chamber of commerce is calling on the provincial government to reconsider tying the wage hike to the annual inflation rate.

Last year marked the first year that B.C. tied the minimum wage to the annual inflation rate, which came in at 2.8 per cent. When announcing the hike that went into effect last June, Labour Minister Harry Bains said the government decided to use the provincial rate of inflation rather than the national rate to better reflect the needs of B.C. workers.

Cory Redekop of The Greater Langley Chamber of Commerce says this year, a minimum wage linked to inflation would rise by 6.9 per cent, adding up to $16.72 per hour.

The group is asking for a minimum wage increase below that, saying a hike of nearly seven per cent will add pressure on businesses in a challenging economy.

“It’s just one more thing that business owners just don’t need to have on their shoulders right now,” Redekop said.

B.C.’s minimum wage is currently the highest among all provinces at $15.65, Redekop says.

He says a raise of nearly seven per cent would have an outsized impact on sectors with tight margins or high labour needs. Those include sectors such as hospitality, accommodation, and tourism that were hit hard by the pandemic.

Redekop says an increase to the minimum wage will have a knock-on effect on salaries.

“Suddenly, if the minimum wage goes up to to $16.72, well, then the people making $16.72 today are going to be expecting a pay increase, and that cascades all this way up,” he said.

He says the impetus for linking the minimum wage to inflation was to get to slow but steady wage increases.

“That model in a year like this is going to result in not a steady, predictable increase, but a sudden and significant increase.”

“I think it’s well within our remit to then go back and say, ‘Well, is that the right model to follow this time?'”

Rising wages will help workers

Anastasia French, the provincial manager for Living Wage for Families B.C., says an increase of close to seven per cent will make a big difference to minimum-wage workers who need the help.

“These are workers who have seen all of their costs increase dramatically over the past 12, 24 months or so,” French said.

French’s group advocates for employers to go beyond the minimum wage and pay workers a “living wage,” the hourly rate two working adults need to earn in order to meet the basic needs of a family of four.

The living wage for Metro Vancouver was set in November at just over $24 an hour. It marked an increase of nearly $4 an hour from the previous year, largely driven by the rising cost of food and shelter.

French says there are hundreds of businesses across the province that have vowed to pay staff a living wage.

She says she has heard from employers who say that paying a living wage is not only the right thing to do, it also makes business sense, helping the employers attract and retain workers.

“People are less likely to take time off sick; their productivity increases often because people aren’t distracted or stressed or working out how they’re going to be able to pay rent next month.”

CBC has reached out to B.C.’s minister of jobs, economic development and innovation for comment.