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Chamber gives cautious nod to minimum wage hikes

Money in pocket now, but cuts in hours could come later as businesses adjust, Webster warns
Minimum wage
B.C. will be implementing a gradual approach to a $15 minimum wage, an approach the Tri-Cities Chamber of Commerce says is necessary to avoid an economic shock.

The Tri-Cities Chamber of Commerce is cautiously supportive of the new B.C. plan that will hike the hourly minimum wage to $15.20 by June 2021.

The local business organization shares an outlook similar to that of the BC Chamber of Commerce, which in a press release last week acknowledged the importance of a four-year timeline to help businesses plan and incorporate the increase.

“I do support that it’s not done all at once. that could be quite dangerous — shocks to the economy are always bad, “ said Randy Webster, who is chair of the Tri-Cities Chamber’s policy committee.

Webster said the attempt to close the poverty gap is a laudable goal, given international trends in which the hollowing out of the middle class has resulted in a dangerous mix of populism and nationalism.

“I think it’s gotten out of control, this whole ultra-wealthy/ultra-poor situation leads to problems,” said Webster.

But the chamber spokesperson, who is also the chief operating officer for MedRay Imaging, said there may be some unintended consequences of imposing higher wages on businesses, such as cutbacks in employee hours and a speedier introduction of technology to replace workers.

“[An increased minimum wage] hasn’t been the panacea I think people wished it would be,” he told The Tri-City News.

In the short term, workers will have more money in their pocket, which is good for reducing poverty. And it won’t be just employees making less than $15 an hour who will benefit, Webster said, because of the pressure to increase wages for workers who are already earning $15 an hour or slightly more.

“Once you get to $18 an hour, those benefits will disappear. And I do think there will be a benefit, people will make more money,” Webster said.

But unintended consequences could result in more expensive living costs, when employers such as Walmart pass on the increase to customers, making it even more difficult for low-wage workers to keep up, especially if their hours are cut to keep costs down.

Webster said he believes raising the minimum wage is a bet officials make that the good will outweigh the bad, but experiences in other jurisdictions, including Seattle and Ontario, which are increasing the minimum wage to $15 an hour sooner than B.C. shows there are downsides, he said.

“If you shed hours, are you better off? Statistics show they are not.” he said.

Webster said another way to reduce the poverty rate with less impact on employers would be to top up the incomes of people living below the poverty line through a tax credit or similar means.

“It gives them an opportunity to get to the living wage and government has more control — rather than taking it to the businesses and hoping they don’t adjust fast enough.”

Other groups have differing views. The BC Federation of Labour said the four-year timeline to get to $15.20 by 2021 is too slow while the BC Federation of Students said the incremental increases will reduce financial difficulties for students who are facing high costs for housing and tuition.

The wage increases proposed by the Fair Wages Commission and endorsed by the B.C. government, would see wages rising to $12.65 by June 1 in 2018; $13.85 by June 1, 2019; $14.60 by June 1, 2020; and $15.20 by June 1, 2021.

The BC Chamber is recommending that the minimum wage be tied to the Consumer Price Index, a recommendation also supported by the Tri-Cities Chamber of Commerce.