Don’t Tie Minimum Wage to Economic Growth – PG Chamber
Prince George, B.C. – The provincial government is poised to increase the minimum wage beyond the Consumer Price Index (CPI) and the Prince George Chamber of Commerce isn’t very happy about it.
It was just last year the government indicated any increases to the minimum wage would be tied to the CPI, but Minister of Jobs,Tourism and Skills Training Shirley Bond said last week (see previous story here) the Province is now “reviewing the minimum wage increase to keep it in line with overall economic growth.”
This isn’t exactly music to the ears of Chamber of Commerce CEO Christie Ray.
“We as a province have prepared our businesses for this and for the increase of what was supposed to be 10 cents an hour,” she says. “So the chamber doesn’t support changing that and tying it to economic growth instead of the CPI.”
Ray says there is a good reason for their opposition to the idea.
“It takes businesses a long time to be able to plan for these things. It isn’t just about minimum wage earners, there’s a whole ripple impact when the bottom wage earners receive an increase,” she says.
“Other staff earning more than the minimum wage also put pressure on that business to increase their wages as well.”
Ray feels the provincial government’s change in direction has been motivated by “politics,” and is “Not necessarily a motivation that focuses on what’s best for B.C.”
She adds the change, expected to be announced this spring and implemented in September, will be bad for business.
“Absolutely, wages are often one of the biggest line items, one of the biggest expenses for our businesses and they need to be able to plan this stuff out, so the chamber doesn’t believe that September, being right around the corner, is enough notice and enough time to spring this on businesses.”
Ironically the chamber’s opposition to tying the increase to economic growth comes just a day after the State of California announced its plan to raise its minimum wage to $15 an hour by 2022.
Currently B.C.’s minimum wage is $10.45 an hour. It was increased last September, the first bump in three years.
Comments
As someone who spent 12 years on minimum wage I can understand both sides of the argument however for many minimum wage leaves the average person usually having to make choices that will affect what gets paid and what doesn’t
Rent even cheap rent will eat up over 60 percent of a persons check based n a 40 hr work week factor in your standard bills hydro, terasen gas, cable/internet and phone. Then if you have a vehicle insurance and fuel add up quickly not to mention repairs then there is groceries and clothing needs as well. The cost goes up considerably if there is a child or children involved.
This doesn’t include if the person smokes or drinks
Add to the fact many people don’t budget so there is that consideration as well in the end the average minimum wage earner ends up making decisions to ignore bills, not buy that food/clothing getting needed repairs to vehicles.
The list goes on and on.
moved up to gods country back in 83 from Vancouver and haven’t looked back since.Everything worked out for the better. Nothing comes easy, you have to work for what you get. I have to chuckle about the above comment because in an earlier post he was pissed because some people were bothering him for some coffee money as he walked into a MR.G’s. condescending if you ask me. Buy someone a coffee or something to eat sometime. Makes ya feel good.
it is called having an opinion everybody has one
Dearth: you didn’t mention all the price increases that have occurred in just the last couple of years, that eat into that bottom line of wages as well.
I don’t know who is responsible for these increases but they have been coming steadily. Wages are simply not keeping up at all. There certainly does need to be an adjustment.
I for one would rather see the prices rolled back and the minimum wage increased a bit at the same time.
Someone is making money and it sure isn’t the wage earners.
It’s tough trying to make it in today’s world with a GOOD wage. I’m not sure how people on minimum wage can do it.
I laugh when I go to a car dealership and see cars and trucks selling for 50, 60, or 70 grand. Groceries are getting ridiculously expensive. Cell phone plans are just stupid in what they cost. Heck…we get all excited when the price of gas drops a couple of cents.
Hats off to those frugal folks who make it on the minimum.
Seattle right across the boarder has a $15 minimum wage already. If one factors in the currency exchange rate that’s twice what the minimum wage is here in BC. Obviously something wrong when the minimum wage there is double what it is here in BC just across the boarder.
Check again, the minimum wage in Seattle is not 15.00 across the border.
Small businesses there won’t be at 15.00 until 2021, they are at 10.50 right now. There are many court challenges going on right now so we will see once the dust settles but 10.50 is pretty darned close to what we are at right now isn’t it?
In today’s modern world current wages, at whatever level they may be, are still only a PART, and an ever declining part overall, of ALL the costs that flow through into prices. Prices of everything needed or desired that the incomes distributed by wages and salaries are supposed to be able to FULLY liquidate. The OTHER part of those costs are PAST labor costs, money that was distributed as incomes at sometime in the past, and, for the most part, spent as received at THAT time. This largely is now accounted for in pricing as Capital Costs. The making of “things to make things with”. Including government spending on infrastructure, and such like. You ask where the money all goes? It goes back to the bank that created it as a loan to initiate some form of production or distribution of goods and services. When it does, it is cancelled out of existence. Simple bookkeeping, debits versus credits. Because the flow of loans and loan repayments is so large and ongoing in total there is an illusion that money is always in existence and always circulating through the economy. Which, for the most part, it is. Only this flow is not made up of the SAME money ~ it is rather ebbing and flowing like the tide coming in and out. If the flow of money BACK to the bank takes place before the price value of the goods it is costed into is liquidated through sale into final consumption, there is a disparity created between that price and the amount of money then still in existence capable of fully liquidating it. Presently that disparity is masked by an increase in loans for more Capital Spending (including Trudeaus’s deficits). But as this spending is from more loans, overall debt increases. And it tends to increase exponentially. We’re not fully liquidating past costs through it, in other words, as fast as we’re piling up new ones that will need to be liquidated. in such a scenario, you could raise the minimum and all other wages to whatever heights your little hearts desire, and prices that must be paid from them will only advance all the faster. All you’re doing is working with bigger figures. There is NO net advantage to the wage earner, and long term he’s going backwards financially in terms of what his earnings will buy and fully pay for.
In other words, what you are saying is that we should not increase anyone’s wage or salary and let the prices rise or fall as long as they fall and rise to retain the current equilibrium in relation to each other.
Or, possibly we could try it with government stepping in to accommodate the plight of the low wage earner by creating a reverse income tax whereby they guarantee a “living income”, however they would determine that in their infinite wisdom. ;-)
They’re NOT in ‘equilibrium’ to one another. That’s the problem. If you took the total amount of wages and salaries distributed as incomes in one week, there is no way they would ever be able to liquidate total costs flowing through into prices in that SAME week ~ even if everything was sold strictly at cost, no profit allowed.
You could possibly use a mechanism like a ‘reverse income tax’, but that would likely be a crude and somewhat mis-understood means of doing what needs to be done. Businesses are really good at determining prices relative to costs. In a competitive environment they have to be, or someone will undersell them and get their market. So leave that be, it works.
The problem we have to deal with is the increasing disparity between the flows of prices and incomes. We want to bring them into balance. To do that we have to look at the whole economy and apply what could be viewed as a macro-economic accounting adjustment. One that would allow consumers to purchase goods at retail at a price LESS than currently accounted for cost.
To do this we have to make price (to the final consumer) bear the same RATIO to cost as total National Production and Imports bear to total National Consumption and Exports over any same given time period. The former is generally considerably larger than the latter. Over time, it has to be. Find out the percentage of by how much, and apply that as a price factor to rebate retail prices paid by the consumer by that amount.
What happens? Business booms. And people can afford to buy back what they’ve just made, and pay for it from what they’ve just made. FULLY.
Don’t do that? Then argue about how much the next minimum wage should rise to, after it’s hit $ 15, and no one’s really any better off than they were when it was $ 10.25.
“We’re not fully liquidating past costs through it, in other words, as fast as we’re piling up new ones that will need to be liquidated.”
Perhaps we are too busy liquidating past and present costs in OTHER COUNTRIES? I read your comments but I have yet to see the inclusion of the outside world (goods imported into Canada) in any of your liquidation schemes. No country is isolated from the global financial and production reality.
Therefore, in my opinion, your theory and reality are at odds with each other. Apparently those worker paradises of the past did not measure up either in their wishful isolation.
Exports and Imports are side issues, Prince George. ALL ‘finance’ is merely a numerical REFLECTION of physical reality. The physical reality of actual Production and Consumption. You could have an industrial system without a financial system, albeit with some difficulty; but there’s no way you can have a financial system without an industrial system behind it. To do otherwise would be the ultimate inanity, for what good is ‘money’ if there’s nothing to buy with it?
Ideally we export our relative surpluses to pay for our imports in the alternate relative surpluses of some other country. Trade, in that sense, makes perfect sense, since it allows the diversification of consumption, both here and abroad.
Where we run into trade problems is when we try to subsidise ‘production’, somehow, (and there are many various ways), and thereby undersell our foreign competitors. That’s what we agree NOT to do when we sign onto various free trade agreements. I’m not aware, however, of anything in any of those agreements that says we can’t subsidise ‘consumption’ in our own country.
Don’t worry chamber it’s not tied to economics at all . It’s tied to the election cycle .
Actually, it is tied to the willingness of Chamber member businesses to provide low wage earners with the same level of compensation increase as the rest of those working fro those businesses, including the business owners and perks they create fro themselves which are tax deductible.
Take driving a business car, just as a sample for instance, or employing their spouses and children and giving them more than minimum wage for minimum wage type of work.
So, a business car, is a taxable benefit if you’re incorporated. And the benefit is designed in such a way by CRA, that you’d be better to own the car personally and bill the company for business use kilometers. Now, if you’re referring to business people who have business cars and don’t report their personal use – then that’s a tax avoidance issue that CRA has to deal with.
As for paying spouses and children more, there actually is a basis for that. Generally they don’t steal from you, and generally have more of a vested interest in seeing you succeed, because what benefits you, benefits them, so they probably are worth more, even though they are doing the same work, but again, if the amount paid family members is unreasonable, it would be a tax avoidance problem.
But most business owners don’t realize they gain little doing that. By the time you lump on CPP, EI, WCB, it’s not that great a deal.
“if you’re referring to business people who have business cars and don’t report their personal use – then that’s a tax avoidance issue that CRA has to deal with.”
Good luck with that. Here is where the honesty of family, including ALL members of the family comes into the matter versus the honesty of staff who you accuse of stealing.
Not a business I would recommend anyone to work for with that attitude!!!!
Who did I accuse of stealing? If you’re going to quote, quote everything applicable. “As for paying spouses and children more, there actually is a basis for that. Generally they don’t steal from you,”
What I did, is state who usually doesn’t steal.
But from Huffington post – a good left wing news source.
“According to a report released by the Retail Council of Canada and PricewaterhouseCoopers LLP, out of all theft related incidents, employee theft grew to 33 per cent, up from 19 per cent in 2008. The loss in retailers’ goods, otherwise known as “shrinkage” works out to an average of $10.8 million a shopping day or roughly $4 billion in losses a year.”
socredible. Your scenario is for all intents and purposes true, however when you relate it to to-day, (that is the day we are presently living in) then I would much sooner go through the day with a rate of pay in the area of $20.00/$30.00 per hour as opposed to $10.45 per hour.
We must remember that it is the business people who determine what value a job has and pays them accordingly. When they are dealing with people who have no Union (or Government) support they can drive the wages they pay to the lowest possible level under the law. However when workers are represented by Unions, or other associations that bargain for wages and benefits they cant get away with that kind of BS.
So, we seem to think that those people are having to work for lower wages because of education, etc; when in fact without them, the rest of us could not survive as a business.
What we really have here is a huge amount of people working in BC who because of the low wages they receive from their employer are in fact subsidizing these business’s so that they can stay in business.
So, just how great are they as business people when they cannot survive without being subsidized by cheap labour???
Businesses being subsidized is good way to put it. In April 2014, Forbes ran a story about a report by Americans for Tax Fairness that found Walmart’s low-wage workers cost U.S. taxpayers an estimated $6.2 billion in public assistance including food stamps, Medicaid and subsidized housing.
Well, Palopu, I think most people would like to be dealing in figures that show they are worth $ 20/30 per hour, or more, rather than a measely $10.45. But the big question here is, I think, how much more good does it really do any of us to make double the minimum wage, or even double whatever more than that we’re already earning, if the prices of everything we have to buy from that pay MORE than double, too? I think that’s akin to Bob Mugabe telling everyone in Zimbabwe he’d made them all millionaires. Only they had to be multi-millionaires, and then billionaires, to be able to afford to eat.
We try to deal always with the minor issues, relatively speaking. Which isn’t entirely wrong, there are many that should be dealt with. But we also tend to ignore the major issue. The ongoing relationships between costs, prices, and incomes. If we can’t arrange our financial affairs so that costs distributed as incomes cannot fully meet the prices through which those costs have to be liquidated as ‘production’ becomes ‘consumption’, we will NEVER be able to solve any of the various things raising the minimum wage is supposed to be able to solve. We will have a ‘financial’ poverty in the midst of a ‘physical’ plenty. We will attack those who managed to get ahead under their own steam, in the mistaken belief that tearing them down will build some others up. It won’t. Not proportionally certainly, if at all. But we will give misery plenty of company, because we can certainly make everyone equally miserable if that’s our ultimate objective. I think we’re better than that. We CAN lift others up, without tearing anyone down. And it’s not that hard to do.
In a world of supply and demand, if there are more workers than jobs, wages fall. If you artificially increase those wages, then jobs decrease, as businesses who planned on X wage cost, can’t make a reasonable return, so they cease business.
On the flip side, if jobs exceed workers, wages should increase, to entice more workers to enter the workforce – i.e. retirees, people on social assistance see it as worthwhile working.
BUT, what happens on the flip side, is the government increases supply of workers by allowing TFW’s to enter the labour market, which artificially keeps the minimum wage as the floor.
Right now as I see it, there will be a shortage of entry level workers -, and minimum wage will be a moot point, unless the government supplies out of country workers.
It seems to me that a higher minimum wage would provide an incentive for some people to get off welfare.
There will always be those who prefer not to become a wage slave and live as best they can on what welfare gives them for doing nothing.
Can’t change that.
Life on welfare will continue to be difficult for those who can’t work a job, not sure what could be done for them that would not make life easier also for those who could work, but won’t.
A higher minimum wage should, in theory, benefit the economy;
directly, by increased purchasing power and corresponding increased sales tax collected, and indirectly, through increased amounts of payroll tax, and cpp deductions (benefits payable once you’ve “put your time in”)
More money in people’s hands, more taxes collected, fewer people on welfare ( perfect world fantasy! )
Every business that currently employs people at minimum wage will see their costs rise fairly dramatically with a generous hike to the minimum wage, but as we have seen in other jurisdictions, those additional burdens are introduced gradually, theoretically allowing those businesses time to adapt.
And let’s not forget, your competitors will face the same cost of business increases as you do, and at the same time, so everyone has to raise their selling prices to reflect their increased costs.
During my years in business, I was against a mandatory increase in the minimum wage, but now I’m not so sure.
For the record, we never paid minimum wage, always 2 or 3 dollars an hour more, as I felt that the minimum was pitifully low.
metalman.
In Canada 2014 6 out of ten people were making less than $15 an hr. when years ago it was 1 in 10. People in this category will no longer have very little purchasing power. Maybe in the future the min wage earners will have to organize and say walk away from their job for a week or so then you might see real change. People that are getting $15 dollars are not even getting a living wage.
It would be worse then with inflation factored in. 40 years ago I made $5.00 an hour working in the unionized sawmill.
Look, fact is, raising minimum wage is probably a good thing. Minimum wage employers can probably pass on the wage increase to customers – i.e., I’ll pay 10 cents more, and most would, for their coffee. But only if their competitor has to as well, and by government mandating the increase, they will all have the same good excuse to raise prices.
At end of the day, it’s not businesses that pay their employees, it’s their customers.
The median annual income of individual Canadians is $27,600. That means 50% earn more and 50% earn less. At a 37.5 hour work week, 2 weeks vacation and 10 days paid holidays that works out to 1800 hours of work at $15.33/hr.
The richest 10% make three times as much ($80,000+) and more as does the median family which has an income of $76,000.
We as a province have prepared our businesses for this and for the increase of what was supposed to be 10 cents an hour,” she says.
That must have taken a lot of planning.
“the chamber doesn’t support changing that and tying it to economic growth instead of the CPI”
What the Chamber is really saying is that the benefit of economic growth should accrue to the business owners as well as to those who are more than minimum wage earners.
Minimum wage earners do not deserve to share at least equally in the economic growth of the business world.
Nice business owners, aren’t they?
Here we are, supporting the small businesses in the City with virtually the lowest municipal small business taxes in BC, and they are not interested in sharing the economic well being of their businesses with their minimum wage earners.
What good is this Chamber to this community anyway?
So what is Christie Rays salary? Does she think its OK to offer someone a 10 cent increase when you are already scraping the bottom of the barrel. In my opinion I think it is an insult.
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