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Report argues minimum wage increases won’t actually help B.C.’s working poor

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On the heels of the first round of increases to B.C.’s minimum wage, the Fraser Institute is out with a report about why it thinks the move won’t help those actually in need.

More than 84 percent of minimum wage earners in B.C. don’t live in low-income families: that’s one of the findings.

Author Charles Lammam says the increase would end up helping the wrong people because of who actually makes minimum wage.

READ MORE: LISTEN: How will minimum wage increases affect the restaurant industry in B.C.?

“They’re predominantly young workers. They’re between the ages of 15 and 24. They’re often times living at home with their parents — in fact, nearly sixty percent of all minimum wage earners in the province are young workers,” he said.

“They’re typically getting their first experience in the labour market, working part time while they go to school, and that explains largely why this minimum wage is not a good way to target the working poor.”

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Instead, he proposes a wage-based subsidy from the government to help low-income workers.

READ MORE: B.C. to raise minimum wage to $15.20 an hour by June 2021

He says this move would be better for two reasons.

“It targets the people we want to help, so you can provide the subsidy to workers that have a household income below some threshold, so it’s better targeted,” he said.

“And second, it doesn’t create those negative economic consequences on jobs, on prices, that the minimum wage does.”

On June 1, the province will increase the minimum to $12.65 an hour — $1.30 uptick.

Iglika Ivanova is a senior economist with the Canadian Centre for Policy Alternatives.

READ MORE: B.C. government to announce minimum wage increases Thursday morning

She says the cost of living continues to increase — and people need to be able to keep up.

“Even among young adults, who are living at home with their parents, often they’re living at home because they can’t afford to live anywhere else. If you’re a full-time worker, you should be able to pay your own rent and buy your own groceries and support yourself, and it’s not currently possible.”

Ivanova also notes women are overrepresented in B.C. numbers.

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READ MORE: Vancouver’s JJ Bean coffee raises B.C. employees wages to match Ontario minimum wage

She says about 61 per cent of them are making less than $15 an hour.

Breaking it down even further, she says immigrant women and First Nations women are the most vulnerable.

“I’m sure this shouldn’t surprise anyone who has walked through a food court and looked around at who is employed. Those are not teenagers living at home. Those are immigrants and racialized workers who are adults, who have families to support, often have children.”

B.C. is hoping to get to a minimum wage of $15.20 an hour with additional increases between now and 2021.