Thursday, March 17, 2011

BC Minimum Wage Increase

I guess in my excitement to have completed my exam, I guess I forgot to post last week. I'm sure you are all dying to know how I did. Well... me too. Two more months before I'll get the results. I think I passed, but at the moment I'm just enjoying having some time off.

I'm sure I've made it quite clear about my feelings on minimum wage in the past, so it won't be a big surprise that I'm not ecstatic about Christy Clark's recent announcement. It appears that it will be increasing by 75 cents every 6 months starting May until it reaches 10.25 by May 2012. As well the training wage will be abolished.

Minimum wage is always such a political topic, but I don't understand who it truly helps. I don't know a single person earning minimum wage so I don't understand who exactly is shouting for an increase. We always hear it is to help the poor people, but are there people truly starting at minimum wage and then waiting for it to go up? I always thought you worked hard and you are given raises. Generally we start young and gain experience and trade that experience for higher wages, but maybe I'm wrong.

What I do know is that I haven't had a raise in over 4 years. I also know that higher wages means higher costs, which means my expenses are going to go up accordingly. Having run a business (although admittedly for a very very short time), I also know that businesses have limited resources and can only afford to hire so many people. The higher the cost, the less individuals get work.

I guess one benefit (or downside depending on your view) of a higher wage is that it makes replacing people with technology more feasible. I'm sure you've noticed the self-check out lanes and pay at the pump gas stations. Sure, the low skilled workers will be without work, but these technologies provide more jobs for the skilled and highly educated work force like engineers.

Not only are you getting an increase if you make $8.00 an hour, but basically anyone earning less than $10.50 an hour will be getting an increase by law. Hopefully the companies can afford to give the people above that a raise too. Imagine the people that have worked hard to earn that $11.00 an hour, only to see a 16 year old just hired at $10.50 an hour with no experience.

Everything has consequences, and this is so obvious to me that it will increase everyone's costs to the point that the raise is meaningless. In the end, cost increases will follow the wage increases until $10.50 buys the same that $8.00 did and everyone is back in the same situation all over again.

Why are we rewarding those that don't gain skills or experience? Wouldn't it make more sense to provide incentives to go to school, learn a trade, to work harder?

I'm sure there are some exceptions. A mother, suddenly single, with no skills, forced into the work force for the first time perhaps. However, these groups are identifiable, unlike the masses receiving minimum wage including 16 year old boys and girls. Wouldn't childcare assistance for single parents be more cost effective in this situation? I have no issues with a lot of these ideas.

Maybe I'm wrong. There do seem to be a great deal of people that agree with a minimum wage. I just find it frustrating that it is used for political purposes, when I don't know who it is that we are truly helping.

I'd love to hear your views on this, especially if you disagree. What I really want to hear is who these people that we are supposedly helping are. Do you know any poor earning this wage personally? Is there a reason they need this help? Is raising the minimum wage the only way to help them?

Update: On my search to see who these people are I stumbled across these stats:

  • Just over 6% of workers in BC earn minimum wage.
  • The lower the minimum wage the less people earning it or less.
  • The average hourly rate is much higher than the minimum.
  • Over 56% of those earning minimum wage are 19 or younger.
  • Almost 25% of those earning minimum wage were part of a couple with the other earning more than minimum wage.
  • For most it is a transitional period.

Well there are clearly some people who truly need the money and are earning minimum wage will be struggling. However, does it make sense to raise the amount for everyone involved when most don't need to live off of that money. Choices have consequences, so should we as country take away those consequences? Approximately 2.6% of BC's population chose not to get a post secondary degree, chose to work in the service industry, and haven't been able to excel in that industry to achieve pay raises. Why should small businesses be forced to pay higher wages to 16 year old kids because of this small group? If the average wage is $19/hours, why are they earning $8?


  1. I had commented earlier, but somehow lost it before it could post, so I'm trying to post again. Although, now I don't remember what I exactly wrote or even how I exactly feel about it. :P

    I think you summed it up good with your comments: "Everything has consequences, and this is so obvious to me that it will increase everyone's costs to the point that the raise is meaningless. In the end, cost increases will follow the wage increases until $10.50 buys the same that $8.00 did and everyone is back in the same situation all over again."

    True. And so what will happen in 5 or 10 years...will we keep increasing minimum wages? I understand the intention is so that people can afford to live off of minimum wage....but why are they? Is minimum wage the goal now? I would much rather see an increase in wages as an employee: after a few months, your pay increases, and again after a year. That would make more sense. I'm not too sure who this would benefit other than those who appear to have no intentions on increasing their position or work. But maybe there are a lot of retail jobs where they only hire part-time highschool staff who never make it past minimum wage b/c of the company's decision to not increase the wages.

    Of course, increasing the minimum wage benefits all of the employees who start out at a job. How can they not be excited? But who really STAYS at that wage for a long extended period of time? Who lives off of this amount? (or attempts to) I feel like I must live on a rock to not be able to think of individuals who this is intended to benefit, and I would much like to be educated, instead of appearing as some ignorant and biased fool. So, all in all, I would have to agree with you! What a strange way to increase jobs and put "family first" by our new Premier. I'm sure there could've been other solutions.

    My concern is what is going to happen to smaller companies who can't afford to put out this extra amount for part time employees. Or those companies who already skim on their hardworking employees to cut costs, such as hiring a lot of part-time staff (who tend to be inadequate) instead of one or two full time. Or like you said, hire the younger person just to pay minimum wage, instead of the one with more experience and a higher wage. :( I can see Customer Service being effected and becoming But maybe we're so used to today's standard of 'customer service' that it won't be noticed.

    On the news (yes, I watched it instead of reading it online!) someone commented that the companies who couldn't afford to increase salaries to reflect these minimum wage changes "have a lot more to worry about" than wages, which I thought was very unfair and didn't show much understanding for small companies who do not make enough money to grow and build. But maybe that was his point. Maybe he likens it to "the strong will survive." Too bad the Strong aren't always the Better, and usually tend to be the Bullies. :/

    I guess there aren't enough jobs out there and so people are forced to work minimum wage for a living. :( Single moms. Students. Suddenly unemployed fathers. But then again.... if they get a job and start at the minimum wage, will their wages not increase over time? Increasing wages, whether they are temporary or not, always benefits the worker though. Especially the ones mentioned above. So I do feel conflicted. It's good from an employee's view, but is it necessary?

  2. saw this today and thought I'd post it to you. I found it interesting, although there isn't a lot to the article: