ISSUES — Minimum-wage hike a non-event

ISSUES — The new B.C. minimum wage is too much, or not enough. Depends on which side of this unwinnable, unresolvable argument you’re on.

Thursday, Minister of State for Tourism and Small Business Naomi Yamamoto, and Shirley Bond, the minister responsible for labor, announced the minimum hourly wage will be indexed to the consumer price index starting next year. And, effective Sept. 15, the minimum wage will go from $10.25 to $10.45. The minimum wage for liquor servers will rise from $9 to $9.20. The daily rate for live-in home support workers and live-in camp leaders, as well as monthly rates for resident caretakers and farm worker piece rates increases proprotionate to the 20-cent increase in the general minimum wage.

Business, usually wary of increases to the minimum wage, was restrained if not outright pleased with the announcement. Aleece Laird of the Kamloops Chamber of Commerce said it’s something businesses can work with and the six months’ notice — which will become standard practice each year — gives them an opportunity to budget for it.

Restaurants were also OK with the 20-cent hike. The Business Council of B.C. called the indexing approach “fair and predictable.”

Others, not so much, including the NDP and the B.C. Federation of Labour. The latter, which wanted a $15 minimum, called the 20-cent raise “pathetic and inadequate.”

The CPI goes up one or two per cent a year, meaning the minimum wage will go up around 20 cents a year and hit $12 an hour some time around the year 2020.

Twenty cents an hour is a pretty modest increase more in line with those who fear higher minimum wages make it tough on businesses and force them to reduce staff, as opposed to those who favour higher minimum wages and claim they improve standard of living and encourage spending — and therefore stimulate the economy.

So, which side is right? Does a higher minimum wage kill jobs, or create them? The effect of raising minimum wages is subject to as much art as science because so many different factors affect hiring levels. It’s reasonable to think that a dramatic increase in minimum wage would impact hiring but evidence suggests “reasonable” increases have minimum effect.

Twenty cents an hour — whether you consider it “reasonable” or otherwise — is a neither/nor sort of proposition. It isn’t going to raise anyone’s standard of living, nor is it going to negatively impact hiring. It is, basically, neutral.

The more important feature of the government’s announcement is indexing, which provides a degree of certainly both to employers and minimum-wage employees. While base minimum will continue to be a source of disagreement, they’ll at least know what to expect year to year.