Grocery clerks and food service staff will be among the 150,000 British Columbians getting a pay raise when minimum wage increases on June 1.
Minister of Labour Harry Bains announced the increase to $16.75 from $15.65 Wednesday (April 5) at a coffee shop in Victoria.
The 6.9 per cent increase in minimum wage rates reflects B.C.’s average annual inflation rate in 2022, according to the government.
“Having a minimum wage that keeps up with inflation is a key step to prevent the lowest-paid workers from falling behind,” Bains said. “These workers and their families feel the impacts of high costs much more than anyone else. We are maintaining our policy of tying the minimum wage to inflation.”
Bains said that policy could become provincial law through legislation before the next scheduled increase in 2024. But such legislation comes with risks. While inflation has historically increased at low, predictable rates, recent years have seen sudden spikes. The province could potentially tie itself to double-digit increases.
“We are considering our options — how do we tie the minimum wage to the rate of inflation, so that our lowest-paid workers do not fall behind, because the reality is, we understand that businesses are hurting coming through the pandemic,” Bains said. Both workers and businesses need predictability, he added.
The coming increase gives B.C. one of the highest minimum wages in Canada and comes after the release of new figures that peg inflation at 6.2 per cent in February 2023. Inflation has been trending down, but remains high for all economic actors, including small businesses such as restaurants, where margins are historically tight.
“The BC Chamber of Commerce is extremely disappointed with the government’s decision to increase the minimum wage by such a significant amount. This decision is the wrong choice, at the wrong time,” Fiona Famulak, President and CEO of the BC Chamber of Commerce, said.
Famulak said the increase comes on top of several decisions that have “added significantly” to business costs. “Today’s announcement will make it difficult for many businesses to manage their operations moving forward and is a disincentive to (re)invest in our province,” she said.
Healthy communities depend on healthy businesses, she added. “Today’s announcement only adds to the urgency we see for government to take meaningful actions that support businesses so they can create jobs, hire workers, contribute to community growth and drive economic sustainability and prosperity.”
Minister of Jobs, Economic Development and Innovation Brenda Bailey acknowledged the struggles of small businessess during Wednesday’s announcement.
“I’m working with the small business community right now and we are accelerating this work,” she said. “This work is happening in parallel (with the minimum wage increase).”
But she also signalled that government has no plans to introduce different types of wages for different types of industries, and downplayed the impact of the higher minimum wage.
“Small businesses are the backbone of our economy and, thanks to their work and determination, only 3.5 per cent of B.C. workers were paid at minimum wage last year,” she said. “Clearly, the vast majority of businesses are seeing the value of paying their staff a fair wage, which is a sign of a strong economy.”
Iglika Ivanova, Senior Economist and Public Interest Researcher with the Canadian Centre for Policy Alternatives, said indexing the minimum wage to inflation is the bare minimum for lowest-paid workers.
“I’m glad to see that the B.C. government did the right thing and did not cave to the pressure coming from the business lobby that pushed for a lower-than-inflation minimum wage increase this year,” she said.
She added that inflation for the two biggest household expenses — food and rent — are rising faster than general inflation.
“Any extra income in the hands of the lowest earners makes a big difference,” she said. “For those who are supporting families, it may mean not having to choose between paying rent and paying bills. It may mean fewer (or no) trips to food banks, who have been facing large increases in demand given the rapidly rising costs of food. It may mean not getting further into debt.”