Canadian Payroll Reporter

2 Canadian HR Reporter, a Thomson Reuters business 2015 News March 2015 | CPR Contrasting verdicts from CFIB, CCPA province or territory in which they work. While a change to the federal rate would not mandate provincial/territorial changes, it could set a standard for other governments in Canada, say la- bour groups. The push for a $15 minimum wage has made headway in the United States. Last year, Seattle and San Francisco passed laws that will gradually raise the mini- mum wage in those cities to $15 and then index it to the rate of inflation. In Seattle, the government will phase in the rate increase over a number of years, begin- ning next month. The timeframe for complying will depend on an employer's size and whether it funds the cost of medical ben- efits for employees. Businesses with more than 500 employees that do not con- tribute to the cost of employees' health-care benefits (at at least the "silver" level as defined in the Affordable Care Act) must pay a minimum wage of $15 an hour by Jan. 1, 2017. Employers that contribute to the cost of the health benefits will have an extra year to get to $15. For businesses with fewer than 500 employees, the $15 minimum wage will be phased in over four to six years, depend- ing on whether employers pay tips or medical care benefits. Employers who pay only a flat, hourly wage rate will have to reach $15 an hour by Jan. 1, 2019. Small businesses that pay reportable tips or pay towards employees' health-care benefits can include those payments in employees' wages to reach the $15 requirement by Jan. 1, 2021. Employers will be able to include tips and health-care benefits in minimum wage calculations un- til 2025. In San Francisco, the $15 minimum wage will be phased in over three years, with two rate hikes this year (January and May) and annual increases in 2016, 2017 and 2018. In Canada, the BC Chamber of Commerce has called the $15 proposal irresponsible, saying it could hurt small businesses and workers. In a statement, it said: "Raising the minimum wage to $15 would raise labour costs by almost 50 per cent. When this is added to the 28 per cent mini- mum wage hike that B.C. has already seen since 2011, the cost pressure on many businesses would be untenable." The Canadian Federation of Independent Business (CFIB) says its research shows minimum wage increases hurt the people they are meant to help. In a 2011 study, it concluded a 10 per cent increase in the minimum wage across all provinces would lead to job loss between 92,300 and 321,300 jobs. "In order to deal with in- creased wage costs, many em- ployers must cut back hours or can't hire another employee. This usually means having fewer entry level positions, which are frequently filled by youth," the CFIB says in a statement. "The big winners when mini- mum wages rise are the unions pushing the policy," the state- ment says. "They win because if the new floor for wages is $15 an hour, it creates pressure to increase wages throughout the system. The employee who was making $10.25 is now making $15, so what does the employee who was making $15 want?" Research by the Canadian Centre for Policy Alternatives (CCPA) shows different results. In a study released last October, the CCPA looked at the relation- ship between minimum wages and employment in all provinces between 1983 and 2012 and found almost no evidence wage hikes affected jobs. "In 90 per cent of cases, we found no connection whatso- ever between higher minimum wages and employment levels. And in the remaining 10 per cent, the evidence was split," says the study's co-author Jim Stanford, an economist with the private-sector union Unifor. "What really drives employ- ment is whether there is pur- chasing power in the economy to buy the stuff that workers make." David Green, a professor in the Vancouver School of Eco- nomics at the University of Brit- ish Columbia, says it is impor- tant to get past the rhetoric and have a real conversation about from B.C. WAGE on page 1 see INDEXATION on page 4 Minimum wage rates in Canada CURRENT HOURLY RATE ANNOUNCED CHANGES Canada Labour Code Aligned with general adult minimum wage rate in each province/territory ALBERTA General $10.20 Sept. 1: adjusted based on changes to Alberta's annual average weekly earnings and its consumer price index (CPI) Liquor servers $9.20 BRITISH COLUMBIA General $10.25 Liquor servers $ 9 MANITOBA General $10.70 NEW BRUNSWICK General $10.30 by 2017: $11.00. In future, it will be indexed to inflation NEWFOUNDLAND AND LABRADOR General $10.25 Oct. 1: $10.50 NORTHWEST TERRITORIES General $10.00 Jun. 1: $12.50 NOVA SCOTIA General $10.40 Apr. 1: $10.60 No experience $ 9.90 Apr. 1: $10.10 NUNAVUT General $11 ONTARIO General $11 Oct. 1: adjusted based on changes to provincial CPI Liquor servers $ 9.55 Students $10.30 under 18 PRINCE EDWARD ISLAND General $10.35 Jul. 1: $10.50 QUEBEC General $10.35 May 1: $10.55 May 1: $ 9.05 Employees in $8.90 hotels and restaurants who normally receive tips SASKATCHEWAN General $10.20 Future changes to be indexed to provincial CPI YUKON General $10.72 Apr. 1: adjusted based on changes to Whitehorse CPI Different rates may apply for specific categories of workers not listed. Contact the applicable employment standards board for more information. the pros and cons of implement- ing policies, such as minimum wage changes, to reduce poverty. "The problem with the mini- mum wage debate is that the people who are against it act like the costs are infinite and the people in favour of it act like the costs are zero." He says academic literature shows minimum wage hikes do have some effect on teenage em- ployment, but almost zero effect for other age groups. If mini- mum wage went up by 10 per cent, Green says it would cause teenage employment to drop by three per cent, but there would be virtually no impact for people in other age groups. The problem, he says, is that the data is based on smaller min- imum wage changes than the $15 proposal would bring. "The key here, when you think about going to a $15 minimum wage, is to realize that in the past, the minimum wage changes that we have had have been in the range of 40 to 50 per cent of the median wage," Green says. "Let's say we're talking about a change now from $10 to $11 in B.C. It would still keep it in that range. That means that the esti- mates that we have would pre- dict that there would be some impact on teenage unemploy- ment and not much of anything on anyone else," he says. "If you talk about going to a $15 minimum wage, now you are talking about a minimum wage that is more like over 60 per cent of the median wage. We're out of the range of the estimates that we have for minimum wage effects. Would there be broader

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