BC Government raising minimum wage, raising false hopes

In the recent weeks along with leadership posturing and opposition members of BCs provincial parliament are all a twitter over raising the minimum wage to $10.00 an hour.

The British Columbia Labour Minister Murray Coell, on the advice of the finance committee, perhaps the liberals reflecting on their unpopularity state raising the minimum wage may be a good thing.     While opening the purse strings of businesses in effect who will be the ones forced to pay for this increase, the Liberals know mandating an increase will curry favour with labour groups and voters come election time. 

British Columbians poorest of the working poor getting a raise?  British Columbians have heard it before, the NDP promises of raising the minimum wage when they were in power, didn’t deliver.  Now with the Liberals on the slippery slope into obscurity seem to want it more.

While raising the minimum wage may seem tickety boo by the poorest of the working poor looking for a well deserved raise.  Reality must set in, job losses will result, and lots of them by businesses operating on razor thin profit margins.

Minimum wage versus unemployment across Canada

Unemployment Rates for all the provinces were (previous month in brackets):

• Newfoundland and Labrador 13.5%  - Minimum wage $10.00
• Prince Edward Island 13.6% - Minimum wage $9.00
• Nova Scotia 9.0% -  Minimum wage $9.65
• New Brunswick 9.8% - Minimum wage $9.00
• Quebec 7.7% - Minimum wage $9.50
• Ontario 8.8% - Minimum wage $10.25
• Manitoba 5.4% - Minimum wage $9.50
• Saskatchewan 5.5% - Minimum wage $9.25
• Alberta 6.2% -  Minimum wage $8.80
• British Columbia 7.5% - Minimum wage $8.00

Vancouver is not Alberta

Alberta during the boom times had a hard time finding people to fill menial jobs was forced to raise the minimum wage in order to retain unskilled workers, turning to students to fill the void. Alberta on the other hand has a lower unemployment rate pegged at 6.5% versus Vancouver at 7.3% and Ontario at 8.8%.   One can see the job losses with Ontario’s $10.25 with the Dalton Liberals.

Vancouver is not Alberta, though British Columbia experiences dribs and drabs of boom times of sorts, the majority of the jobs are not in the unskilled sector.  Unskilled labour is a dime a dozen, thus no shortage of people who will work for peanuts.

BC labour groups feel our current $8.00 an hour minimum wage should increase upwards of $10.00 an hour, like Ontario who currently enjoy $10.25 an hour.  The liberal government most likely would settle with parity with Alberta.  Alberta’s minimum wage at a princely sum of $8.80 an hour would be seen as doable.   Canada GDP and where a portion of it goes for social assistance   Canada’s GDP (Gross Domestic Product) for 2009 is $1.600 trillion dollars.  Canada spends 16% of its GDP or $256 Billion dollars exclusively on social programs, this includes everything from social housing, unemployment, immigrant social services, healthcare etc.

Canada employed and unemployed

Canada currently has 34,600 million people. 

Canada currently has 18,416,700 million employed
Canada currently has 1.5 million unemployed

British Columbia GDP and the employed and unemployed

As the statistic below show, those unemployed and currently on social assistance during our $8.00 an hour minimum wage today, so how would raising the current minimum wage help the currently unemployed?  Not one iota!  

British Columbia GDO is estimated at $200 Billion Dollars

·         British Columbia has 4,530,960 million people

·         British Columbia currently has around 1.1 million people employed between the ages of 20 to 60 years of age.

·         British Columbia has an average of 470,000 people unemployed

·         Children and teens comprise of the bulk of the population at 2.8 million.

·         The elderly at 160, 000 make up the rest of the population age 65-100.

·         British Columbia currently has 1.9% of the population or 85,600 persons currently receiving social assistance in their social programs.

·         It is estimated $38 Billion dollars is used for social programs alone.

So you see, a raise of 80 cents an hour, while doable, is less of a burden on businesses, though an estimated 20 % would be eaten up by various taxes that person would have to pay, not including union dues which take a cut from its union members.

Reality

While raising the minimum wage may seem tickety boo by the poorest of the working poor looking for a well deserved raise.  Reality must set in, job losses will result, and lots of them by businesses operating on razor thin profit margins.  Currently there are numerous businesses operating in the lower mainland whose hiring practices may seem suspect, as well as recent arrivals to Canada are a vast unskilled work force, especially true in British Columbia.

 Recent arrivals to BC unskilled with no English language skills actively compete for any job, no matter how menial for any wage no matter how little just to survive.  Many employers looking for menial labour know this, enjoy it and use it to their advantage.  This depletes any chance of British Columbians of even finding a minimum wage salary in the job market.

Vancouver’s underground economy goes unchecked, if one is attuned to the underground economy one only need witness one example of hundreds of areas in the Lower mainland where throngs of men and women, work tools in hand, the majority new arrivals to Canada standing on the corner Ontario Street and 3rd Avenue looking forlorn at passing motorists hoping for any unskilled job offer a passerby may have for them.  Certainly described as the Best Place to Live on Earth, Vancouver certainly is, but only for those who have well paying jobs.

Government and Unions wishing for a $10.25 an hour minimum wage will cost more jobs that you can imagine, if any indication of higher unemployment rates in provinces with $10.25 minimum wage rates.

While everyone deserves a decent standard of living, demand it will most likely result in employers in Canada’s manufacturing sector and other sectors to look East, in fact the Far East where a $8.00 wage is a daily rate, and not an hourly rate like in BC.

British Columbians' by now should be used to the façade of political platform promises such as raising the minimum wage in the past and present made by all political parties who know a sure fire vote getter, rarely delivered once elected.