The Yukon government should not raise minimum wage any more for the sake of the economy, according to the president of Yukon Chamber of Commerce.
“That seems palatable from what I’ve heard from the employers,” Peter Turner said. “But if we continue to accelerate into this danger zone of beyond what currently would be $14 an hour, then we got some real problems.”
Minimum wage will hit $13.71 per hour in April, an increase of $1 — the highest of any territory.
John Streicker, minister of the Department of Community Services, said there’s always a range of opinion when it comes to minimum wage hikes.
“It’s not always black and white. There is a balance, always, and I appreciate the perspective of the chamber’s. That’s why the Employment Standards Board has both employee and employer sort of representation on the board, so that they can keep that balance,” he said.
In 2018, The Yukon Employment Standards Board suggested ratcheting up the territory’s minimum wage to roughly $15 by 2021.
An economic evaluation released in January by a branch of the Yukon Finance Department says this would represent the largest three-year increase to the Yukon’s minimum wage in 50 years, if followed through with. It calls the increase, when compared to the other territories, “unprecedented.”
It says there could be economic impacts if minimum wage exceeds 45 per cent of average wages.
“For the Yukon in 2021, this danger zone (of) 45 to 50 per cent range is expected to lie between $14 and $15.50 per hour.”
Turner said increases would represent the highest in Canada by year three.
“If we are going to continue on a path to accelerate beyond cost of living adjustment at this point, then we really get into the territory where we start to negatively impact the economy,” he said, noting that most jurisdictions in Canada don’t have such an adjustment written into legislation like the Yukon does.
In October 2019, the Yukon Anti-Poverty Coalition released its annual report on the cost of living in the territory, which found that the “living wage” in the Yukon — basically, the minimum that two adults with two kids living in Whitehorse would have to earn to meet all their basic needs — was $19.07 an hour.
A mainstay of increasing minimum wage deals with poverty reduction.
The Yukon government’s economic evaluation calls this tactic “crude.”
Turner said a higher minimum wage puts strain on small business owners. It also exerts upward pressure on higher wage earners.
He suggested childcare subsidies instead in order to combat poverty.
“What starts to happen is employers start to scale back on the number of people they hire, or they go to automation,” Turner said.
Streicker said it’s correct to think that there needs to be a suite of approaches in order to alleviate poverty — affordable housing being another example.
“It is true that many people earning minimum wage are people just entering the workforce,” he said.
Turner said that there are few of these workers in the Yukon.
The report says there were 408 people earning minimum wage in 2018.
“Of those 400 people, more than half of them basically are students or live at home with their parents,” Turner said.
With files from Jackie Hong
Contact Julien Gignac at email@example.com