As B.C. prepares to increase its minimum wage to $12.65 an hour on June 1, a new study suggests that it will do little to reduce poverty.
More than 84 per cent of B.C.’s minimum wage earners don’t live in low-income families, the Fraser Institute found in an analysis of federal low-income statistics that define poverty in Canada.
In 2017, more than 55 per cent of minimum wage earners in B.C. were aged 15 to 24, and 78 per cent of them lived with parents or other relatives.
And more than 22 per cent of the same group had an employed spouse, of which 93.1 per cent earned more than the minimum wage or were self-employed. Only two per cent of minimum wage earners were single parents with young children.
“Contrary to widely held misperceptions, the vast majority of minimum age earners in B.C. aren’t poor, and they are rarely the primary or sole income earner in their household,” said Charles Lammam, director of fiscal studies at the Fraser Institute. “The majority are, in fact, teenagers and young adults living with their parents.”
The June 1 increase from $11.35 to $12.65 an hour is part of the B.C. NDP government’s pledge to raise the minimum wage in steps to $15.20 by 2021. That’s a 34 per cent increase in three years, and it meets a long-standing demand of the B.C. Federation of Labour that the minimum wage reach $15 an hour.
Labour Minister Harry Bains announced in April that the lower minimum wage for liquor servers is also being phased out, with larger increases until it matches the general hourly rate in 2021.
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The latest increase comes as the B.C. government is under pressure from business groups about its health care payroll tax. Finance Minister Carole James disputed a Greater Vancouver Board of Trade study that said two thirds of small businesses said they expect to pay the tax. The employer health tax is being phased in starting January 2019.