Wage increase will help business, say labour and poverty groups

When it comes to minimum wage, the buck stops with the economy. This is the assessment of Doug Rody, executive director of the Yukon Federation of…

When it comes to minimum wage, the buck stops with the economy.

This is the assessment of Doug Rody, executive director of the Yukon Federation of Labour, and an advocate for raising the rate to $8.25 an hour, from $7.20.

An increase won’t hurt local business, it will boost it, he said.

“The people who are getting this raise don’t spend their money in Paris or Cancun — they spend their time in Whitehorse and the extra money will go right back into Whitehorse,” he added.

The Whitehorse Chamber of Commerce whacked the proposal this week, stating a mandated wage increase would “hurt the people who it’s meant to help.”

Increasing the payroll will force business to hire fewer employees or cut worker hours, said chamber president Rick Karp.

The increase should be phased in over two years, at least, to mitigate any potential damage to business, he said.

“The last increase was in October of ‘98 and the chamber wants people who haven’t had a raise in two years to wait another two years?” said Rody.

“The chamber’s approach to this is right out of a Charles Dickens’ novel — maybe if they tried living on $7.20 an hour they’d see things differently.”

The Yukon employment standards board’s proposal to raise the minimum wage is a move in the right direction, said Ross Findlater, vice-chair of the Yukon Anti-poverty Coalition.

In November, the board proposed raising the wage by April 2006.

It’s not enough to take people out of poverty, but it will help, said Findlater.

“What I personally hear from people is that they’re working two or three jobs and it’s still not working out,” he added.

“The board, as a whole, feels the minimum wage is way too low,” said Yukon employment standards board vice-chair Gerry Thick.

The wage hasn’t been re-evaluated since 1998.

It was simply an oversight, said Thick, when asked why the raise was so long in coming.

Board members have changed in the past few years and new members were unaware it was their responsibility to re-evaluate the pay, he said Wednesday.

The raise was sparked by an increase in the consumer price index, which has gone up about 14 per cent since 1998, according to a government release.

It also proposed annual wage hikes tied to the consumer price index, to account for ever-increasing costs of living.

The extra payroll expenses businesses will incur because of the raise are minimal, said Rody.

For a part-time worker, the WCB, EI and CPP costs on the extra $1.05 an hour is about 10 cents an hour.

Rody said businesses will most likely raise their prices to offset the costs of increasing wages.

“Ultimately all costs are borne by the consumer, whether building a building or serving a coffee,” he added.

The Yukon Federation of Labour and the Anti-poverty Coalition have both recommend the minimum wage be increased to $10 an hour.

However, the wage would have to be increased to $10.75 an hour nationally to bring most people above the poverty line, said Findlater.

He conceded that probably wasn’t feasible for business right now.

If there’s too high an increase, employees could find themselves in no better shape, said Findlater, noting they could find their hours cut back.

The government’s consultation process on the proposal continues until January 20th.