Increasing B.C.’s minimum wage will mean lost jobs: Report

Increasing minimum wage to $10.25 could mean 52,000 lost jobs: Fraser Institute
||Last Updated: 05/03/2011

Increasing British Columbia’s minimum wage to $10.25 could result in the loss of up to 52,000 jobs in the province, according to a new study from the Fraser Institute.

British Columbia’s minimum wage increased on May 1, from $8 to $8.75 per hour. This is the first of three 75 cent increases. The final increase will see minimum wage increase to $10.25 on May 1, 2012.

“While increasing the minimum wage may be done with good intentions, the facts show that it has very negative consequences,” said Niels Veldhuis, Fraser Institute senior economist and co-author of Estimating the Economic Impact of British Columbia's Minimum Wage Increase.

“When governments impose high labour costs on businesses, employers react by hiring fewer workers and reducing the number of hours employees work.”

The study looked at research from Canada and internationally to measure the effects of raising minimum wage. It found raising minimum wage generally has a negative impact on employment especially for youth.

Raising the minimum wage from $8 to $10.25, could result in the loss of 9,391 jobs to 52,194 jobs. Veldhuis calls this a conservative estimate that only looks the impact on youth and teen workers.

Raising the minimum by 75 cent increments over the course of a year will do little to protect jobs, the report said.

“The time period over which the $2.25 increase will roll out is relatively short, and the overall increase too large for the adverse employment effects to be mitigated, especially in the current economic climate,” said Veldhuis.

Fewer benefits and less training for workers may also be outcomes of the increased minimum wage, the report said.

“Fewer opportunities and less training for young adults are especially unfortunate, given that entry-level jobs, many of which pay the minimum wage, are a stepping stone to better paid employment,” said Amela Karabegović, Fraser Institute senior economist and co-author of the report.

Quebec’s minimum wage also increased on May 1, up 15 cents, from $9.50 to $9.65.

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