Report: Minimum wage in British Columbia to rise, but still below subsistence level

British Columbia's minimum wage will increase to $17.40 an hour on June 1, but hundreds of thousands of people will still not have the minimum income that is costing them their lives, says an economist who co-authored a new report.

“The statistics clearly show who these workers are,” said Iglika Ivanova, senior economist at the Canadian Centre for Policy Alternatives in British Columbia. “The majority are over 25 years old, with women and racially discriminated workers disproportionately affected.”

The report, released by CCPA in conjunction with Living Wage for Families BC, shows that more than a third of paid workers (740,000 people) earn less than the minimum wage in their community. The minimum wage is the hourly wage each of two full-time working parents must earn to support a family of four in their community. The report, which examines 20 cities and regions, comes just before the minimum wage is set to increase by 65 cents under new legislation that will tie future increases to inflation.

“In the current affordability crisis, workers are stuck in the gap between the living wage and the minimum wage, facing impossible choices – buying groceries or heating the house, paying bills or paying rent on time,” said Anastasia French, provincial director of Living Wage for Families BC.

The gap between the living wage and the new minimum wage is smallest in the northeastern municipality of Dawson Creek: $3.14. This gap widens southwards, reaching its peak in Metro Vancouver and Greater Victoria, where the difference is over $8 per hour.

“I think we need to close the gap on both sides, both in terms of wage increases, but we also need to curb some of the costs and provide more support in the area of ​​social infrastructure,” Ivanova said.

The report recommends raising the minimum wage to $20 an hour to close the gap, benefiting more than 400,000 people across British Columbia.

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The report also recommends additional investment in public transport to reduce costs and calls for an “affordable food strategy” combined with “more generous income support”. It also calls for additional investment in housing.

“We've been in a full-blown housing crisis for well over a decade, if not longer,” Ivanova said. “It's felt across the country, and we still haven't seen the government step in to the extent that's needed to do something about it and actually make a difference.”

Ivanova acknowledged recent efforts but said it would take “several years” to see results.

Calls for a living wage or guaranteed basic income are not new, but they coincide with business concerns about excessive bureaucracy and rising costs in BC.

When the government announced it would index future minimum wage increases to inflation, the British Columbia Chamber of Commerce welcomed the certainty. But Chamber President Fiona Famulak also said, “We cannot ignore the fact that the cost of doing business in British Columbia is high and businesses are struggling,” and called on the government to find a “balance.” She also warned of the knock-on effects of a minimum wage increase that sets the “floor” for all wages.

Ivanova said some of the recommendations in her report would help stimulate the economy.

“Affordable housing, for example, is a big problem for employers,” she said. Housing costs – not the minimum wage – are often a major reason employers struggle to fill positions, she added. “If you give very low-income people more money, they will spend it, and that stimulates the economy,” she said.

While Ivanova acknowledged that higher wages would impact the bottom line, wages are only part of the cost equation.

“Small businesses need more support and we can look at different ways to support them, but that should not come at the expense of the lowest paid workers.”

British Columbia Labour Minister Harry Bains said his government has “steadily increased” the minimum wage since 2017 to prevent the lowest-paid workers from falling behind.

“The minimum wage has been frozen for nearly a decade and was one of the lowest in Canada as recently as 2016,” he said. “With this latest increase, it will continue to be the highest of any province.”