Painful Truth: Wages need to keep rising

The business community in B.C has come together, not surprisingly, to criticize the provincial NDP government for sticking to its promise to raise the minimum wage by the rate of inflation.

The argument is that the increase from $15.65 to $16.75 an hour will impact the ability of small businesses to keep operating. The increased cost of staffing – whether it’s raises to minimum wage workers’ salaries, or pressure to give raises to those making around $17 to $20 an hour – will cause layoffs, or small firms will just go out of business.

I agree that the NDP should not be increasing the minimum wage based on inflation.

They should be basing it on the cost of housing or food.

For example the cost of groceries in Canada was up by 10.6 per cent annually as of February. That was double the then-current overall inflation rate.

If you’re living on minimum wage (or the closer you are to it) then groceries are, proportionally, a much larger part of your monthly spending than they are if you make six figures. There’s a reason why people with jobs have to go to food banks, and why we have backpack programs in schools that send kids home with food for the weekends.

So you could argue that the actual increase should have been 10.6 per cent this year alone. At least that would have let people making the lowest legal wage in B.C. keep up with their food bills!

But what about housing?

Well, if we look at the cost of renting, according to the Canada Mortgage and Housing Corp. (CMHC), in 2022, rent overall surged by 6.3 per cent last year – pretty close to the rate of inflation.

But that’s not the whole story. The average rent for a vacant unit was 43 per cent higher than overall average rent for an occupied unit – in other words, if you want to move, you’d better be willing to either pay a whole lot more, or accept a much smaller living space.

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Should we look at the price of real estate over the last decade? Maybe we could index the minimum wage to that?

I’m sure it’s true that increasing the minimum wage does make things harder for businesses, particularly small businesses with tight margins

But not increasing the minimum wage makes things much, much harder for their employees, who are actual human beings who deserve to be able to buy food and pay for decent housing, and have something left over at the end of the month.

For decades across North America, minimum wages stagnated. In B.C., 20 years ago, the minimum wage was $8. The price of a detached house in the suburbs of the Lower Mainland was edging above $300,000. This year, the minimum wage is a little more than double what it was in 2003. The price of a detached house is north of $1.3 million, having more than quadrupled over the same time.

Wages haven’t kept up with the cost of living for decades. Raising the minimum wage by the rate of inflation is doing the bare minimum to keep workers out of dire poverty.