The Yukon Employment Standards Board is suggesting ratcheting up the territory’s minimum wage to roughly $15 by 2021.
Currently, those on a minimum wage payroll earn roughly $11.51 per hour. By next April, if recommendations from the board are implemented, people could be make about $12.60.
In 2020 and 2021 the minimum wage would climb to roughly $13.80 and $15.12, respectively.
This gradual change, the board believes, “will benefit the Yukon by reducing the inequality gap as recognized by the living wage, improving the local economy by increasing consumer spending power, and allowing employers to attract and retain employees more easily,” according to a report released earlier this week.
Cabinet is currently reviewing the report’s recommendations and will publicly release its decision “as soon as possible,” spokesperson Janine Workman said in a written statement.
NDP house leader Kate White applauded the report.
“Ultimately, we know the cost to live in the territory is high, so by increasing the minimum wage what we’re doing is closing that gap between what it actually costs to live here and what people make,” she said. “The next step to me after that is we have to address the cost of living here.”
The gap between minimum and living wages currently is $7.06 per hour. Living wage is defined “as the hourly rate of pay a household of two adults and two children requires in order to meet basic needs” like housing after taxes.
“Wouldn’t it be fantastic if minimum wage earners got this gift for Christmas,” said White, whose party campaigned to increase the minimum wage to $15/hour.
The Yukon Chamber of Commerce had suggested raising minimum wage incrementally, said president Peter Turner.
Last year, the chamber put out a survey and the “vast majority” of businesses indicated workers were paid more than minimum wage, he said.
“Most of it was because of competition for employees,” Turner said.
Increasing minimum wage, however gradual, could still come with difficulties.
Higher tier wages would have to be adjusted, Turner said.
Employers told the chamber that they would either have to scale back business hours or the number of employees, he added.
He said the changes, if carried out, would likely impact the hospitality and tourism sectors most.
“Not because of, say, one person getting higher minimum wage, but more that upward pressure on salaries that this results in,” he said.
“It’s a really interesting conundrum.”
The proposed increases factor in the consumer price index, calculated as an average of 1.5 per cent over the next three years, according to the report. The reason for including it is to account for funds required for low wage workers to meet their basic needs, it says.
Relative to 13 jurisdictions in Canada, the Yukon’s minimum wage is ranked eighth, says the report, noting that Yukon is trailing behind the two other territories.
There aren’t many Yukoners on lower pay scales.
In 2017, there were 2,038 residents earning between $11.32 and $15, the report says, citing the Yukon Bureau of Statistics.
Those who make this much tend to work in the service industry — bars, hotels and retail, for instance.
While it’s important to ensure that low skilled workers are paid on pace with inflation, there’s a danger if minimum wage is increasing too much too soon, said Mark von Schellwitz, the vice-president of Restaurants Canada’s western branch.
If there’s not a strong sales growth, a rapid increase could throw off the balance, he said.
“When you have to absorb that big of an increase in a short period of time, an operator only has two choices, they can cut back on labour or increase their menu prices, and each one of those is something they’re obviously reluctant to do. They want to provide the best level of service they can for their customers and provide the greatest value,” von Schellwitz said.
Minimum wage increases in Alberta, for instance, at least in part, have caused a “huge” loss of employment, he said.
The wages in that province grew from $10.20 in 2015 to $15 in 2018.
In February 2015, there were about 160,000 workers in the food industry, von Schellwitz said.
“As of Oct. 1, 2018, when the last minimum wage increase went ahead in Alberta, our employment was about 146,000,” he said, a loss of roughly 13,000 jobs in the sector.
The Yukon report, however, says increases to minimum wage in Alberta created a boon of new jobs in the service sector — about 23,000 of them.
A public survey was available over the summer concerning the boards’s report. It garnered 661 responses, the majority of whom resided in Whitehorse.
Most people — about 86 per cent — said the current minimum wage is too low, the report says.
Contact Julien Gignac at email@example.com