As B.C. awaits minimum wage increase, businesses say hikes shouldn't be tied to inflation

As businesses wait to hear the province's decision on anincrease to the minimum wage, alocal chamber of commerce is calling on the provincial governmentto reconsider tying the wage hiketo theannual inflation rate.

Last year marked the first year that B.C. tied the minimum wage to the annual inflation rate, which came in at 2.8 per cent. When announcing the hike that went into effect last June, Labour Minister Harry Bains said the government decidedto use the provincial rate of inflation rather than the national rateto better reflect the needs of B.C. workers.

Cory Redekop of The Greater Langley Chamber of Commerce saysthis year, aminimum wage linked to inflation would rise by 6.9 per cent, adding upto $16.72 per hour.

The group is asking for a minimum wageincrease below that, saying a hike of nearly seven per centwill addpressure on businesses in a challenging economy.

"It's just one more thing that business owners just don't need to have on their shoulders right now," Redekop said.

B.C.'s minimum wage is currently the highest among all provinces at $15.65,Redekop says.

He says a raise of nearly seven per centwould have an outsized impact on sectors withtight margins or high labour needs. Those include sectors such ashospitality, accommodation, and tourismthat were hit hard by the pandemic.

Redekop says an increase to the minimum wage will have a knock-on effect on salaries.

"Suddenly, if the minimum wage goes up to to $16.72, well, then the people making $16.72 today are going to be expecting a pay increase, and that cascades all this way up," he said.

He says the impetus forlinking the minimum wageto inflation was to get toslow but steadywage increases.

"That model in a year like this is going to result in not a steady, predictable increase, but a sudden and significant increase."

"I think it's well within our remit to then go back and say, 'Well, is that the right model to follow this time?'"

Rising wages will help workers

Anastasia French,the provincial manager for Living Wage for Families B.C., says an increase of close to seven per cent will make a big difference tominimum-wageworkerswho need the help.

"These are workers who have seen all of their costs increase dramatically over the past 12, 24 months or so," French said.

French's group advocates for employers to go beyond theminimum wageand pay workersa "living wage," the hourly rate two working adults need to earn in order to meet the basic needs of a family of four.

The living wage for Metro Vancouver was set in November at just over $24 an hour. It marked anincreaseof nearly $4 an hour from the previous year, largely drivenby the rising cost of food and shelter.

French says there are hundreds of businesses across the province thathave vowed to pay staff a living wage.

She says she has heard fromemployerswho say that paying a living wage is not onlythe right thing to do, it also makes business sense, helping the employers attractandretain workers.

"People are less likely to take time off sick; their productivity increases often because people aren't distracted or stressed or working out how they're going to be able to pay rent next month."

CBC has reached out to B.C.'s minister of jobs, economic development and innovation for comment.