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Six Dollar Wage Failure
It appears the Liberal regime's new reduced $6 an hour minimum wage is not having the promised effects of lowering youth unemployment and helping small business after all, according to recent indicators.
According to Statistics Canada, unemployment in BC has crept up to almost ten per cent, well above the 7.5 per cent national average, and the province is lagging behind the rest of the country in job creation.
"The jobless rate has literally jumped by almost three per cent from 6.9 per cent just over a year ago," says BC Federation of Labour President Jim Sinclair in a recent news release. "BC now stands last in economic growth and is expected to trail other provinces for several years."
He adds that youth employment, considered the best marker in determining whether the $6 minimum wage is leading to more jobs, has remained almost unchanged at about 60 per cent since the new wage was legislated last November.
Statscan's latest measurement puts the BC youth jobless rate at just over 15 per cent in May, 0.4 per cent increase over April.
In addition, the retail, services and hospitality industries, which were expected to create the most jobs as a result of the lower wage, have in fact not done so, and in many cases are producing layoffs.
But the Liberal government still holds the position that the lower wage is intended to spur job creation.
"B.C.'s minimum wage is by far the highest in Canada, and we have clearly heard from small businesses about the impact this increase could have on job creation," says BC Liberal Labour Minister Graham Bruce. "Young workers are also expecting the government to focus on the challenge of youth unemployment. The first-job rate is a first step to help strengthen youth employment options."
The government's push for the lower wage is based on the premise that lower wages will in some way allow small businesses to open up more positions-a notion dismissed by most labour and social economists, as well as labour, student and youth rights activists.
"Youth participation in the labour force has dropped sharply since 1989. Many youth have given up on trying to find work, knowing that the jobs that are available are hardly worth the time," says the BC Federation of Labour's youth committee. "Those youth who are working face insecure, part-time or temporary, low paying jobs with few or no benefits and little prospect for improvement. For many, the pay will now be lower than minimum wage, and the working conditions continue to be lousy. How many "McJobs" have you had?"
Opponents to the new low wage have quoted numerous studies and historical trends that show lowering wages and job security have a devastating effect on economies, especially in the long term, since they drastically reduce the spending power of consumer to stimulate markets for economic activity.
"Studies show that changing minimum wage levels has only marginal effects on employment," says the committee. "Other trends in the economy influence how many jobs there are far more than lowering people's incomes."
The Canadian Federation of Students, which has been working with the BC Fed and other labour and youth groups to fight the new low wage, says the lower $6 wage shows "a contempt for youth" on the part of the BC Liberal government.
CFS BC Chairperson Summer McFadyen says students have been hit twice in the pocket book because of the combined impact of the lower wage and skyrocketing tuition fees for post-secondary education imposed by the government.
"It is perverse to have a public service such as post-secondary education that is funded through the tax dollars paid by all British Columbians - charging user fees that are so high that access for many lower and middle income families is denied," said McFadyen.
The Columbia Journal
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