Fresh Takes

British Columbia to hike minimum wage; Alberta takes a more nuanced approach

In response to inflation hitting a 30-year high and the cost of living rising at a head-spinning pace, British Columbia is set to increase its minimum wage by approximately 3% on June 1st, from $15.20 to $15.65 per hour.

Raising the minimum wage has no immediate direct impact on government finances, as it costs them nothing to implement, with businesses and consumers paying the price. The sectors that are most likely to be impacted by this decision are retail and hospitality. Unfortunately, this may be the final blow to many small businesses that managed to survive COVID by the skin of their teeth.

In the early days of the pandemic, only half (53%) of the businesses surveyed were expecting to reopen when restrictions on workplace operations were lifted, with an additional 38% unsure if they would be able to. After multiple rounds of shutdowns and restrictions, the number of impacted businesses is surely huge.

This might not be the time to add an additional cost to these struggling small businesses. The government of neighbouring Alberta agrees. When asked if his province would consider a similar move, Premier Kenney said it would be “too hard on businesses trying to recover from the pandemic.”

Raising the cost of doing business is not the only unintended consequences to think of—there’s also job losses, for instance. BC Minister of Labour Harry Bains has been quoted as saying, “There is no link of job losses to minimum wage.” However, research across Canada shows the opposite to be true.

Considering that two in five British Columbians surveyed worry about job losses, the government should take a magnifying glass to this policy measure that may very well cause harm to many of those it purports to be helping.

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