It's time to raise BC's minimum wage above the poverty line

March 27, 2007

What does it mean to be a minimum wage earner in British Columbia?

It means making $8 per hour—or as little as $6 if you’re getting the so-called “training wage”. If you work full-time, it means paydays that bring in at most $640 — and that’s before deductions. It means seeing your buying power eaten away year after year by rising living costs — BC’s minimum wage has been frozen since 2001, but you pay 2007 prices just like everyone else. And it means living on an annual income that is at least $4,000 below the poverty line for a single person.

BC is not alone in failing to set a decent standard of pay for low-wage workers. No province in Canada currently pays a minimum wage that lifts people out of poverty. Provincial governments have been content to let minimum wages erode over time, until forced to act. As a result, their real value has fluctuated widely in recent decades, decided more by political winds than any rational policy or clear standard.

Raising the minimum wage to $10 an hour would mean a single person working full-time, all year round, could earn enough to live just above the most current (2005) poverty line. And indexing the minimum wage to inflation would put an end to pay cuts by inflation for our lowest-paid workers.

The idea that someone working full-time should be able to get out of poverty is a clear, transparent policy that should determine the minimum wage — in BC and in other provinces.

Last week, Ontario’s provincial government announced plans to raise its minimum wage to $10.25 by 2010, arguing that a more rapid increase would result in substantial job losses. The evidence suggests otherwise. A new study by the Canadian Centre for Policy Alternatives weighs the full body of research in this area. It concludes that the minimum wage is, if anything, a bit player when it comes to employment rates. Over the past 25 years, increases in provincial minimum wages have been followed by both increases and decreases in employment, showing that other trends in the economy are much more important. Given BC’s current economic growth and labour shortages, increasing the minimum wage to $10 would, at worst, result in a negligible slowdown in job growth.

Opponents to minimum wage increases also argue that so few people actually earn minimum wage the problem is trivial, and that most who do are teenagers living comfortably at home. In fact, one in 25 Canadians works for the minimum wage or less. Twenty eight per cent of women minimum wage earners are age 25 and older. Seventeen per cent of male minimum wage earners are 25 and older. But thousands of others work for only a little more. One in five Canadians earn less than $10 an hour, and nearly half of them are over 25. This debate is not “just about teenagers.”

For a significant proportion of our workforce, the idea that full-time minimum wage work should pay enough to stay out of poverty isn’t just a matter of principle. It’s a matter of financial survival for them and their families.

These numbers tell us that economic growth alone is not enough to raise the floor for low-wage workers. And in spite of our growing economy, the gap between the rich and poor continues to widen. By 2004 it had reached a 30-yer high, with the wealthiest 10% earning 82 times more than the poorest 10%. The bottom half of earners is taking home a shrinking slice of the income pie, even though Canadian families are working harder than ever (200 hours more per year, on average, than they worked 10 years ago).

Raising the minimum wage to $10 an hour won’t end poverty or close the income gap overnight. But it is an important first step down the road to a less polarized society, and a step that will make a vital material difference in the lives of thousands of workers and their families.

It’s time for BC’s provincial government to raise the minimum wage to $10, index it to inflation, and get rid of the $6 “training wage.”


Stuart Murray is a researcher with the Canadian Centre for Policy Alternatives’ BC Office, and co-author of Bringing Minimum Wages Above the Poverty Line, published March 26, 2007.