Chamber supports Government’s effort to reduce poverty, but is there another way?


(Tri-Cities) February 20, 2018 – The Tri-Cities Chamber of Commerce supports the effort to reduce poverty and the growing income gap between the high and low-income earners. We applaud the Government for taking steps to help low-income earners. However, the Tri-Cities Chamber believes there will be unintended consequences to minimum wage increases. Furthermore, there are more effective solutions to increasing the minimum wage, such as Earned Income Tax Credits or Working Income Tax Benefit.

The Tri-Cities Chamber supports a gradual increase to $15 per hour rather than a quick increase to mitigate the risk of shocks to the economy. The four-year timeline is important to allow businesses to plan for and incorporate the increase. On June 1, 2018, we will see the first, and largest, jump in minimum wage; $1.30 to a total of $12.65.

We will see an average increase of $0.85 each year over the next four years. The additional cash-in-hand will help workers get by in the short-term. The Tri-Cities Chamber supports any further increases that are tied to inflation.

Minimum wage increases elsewhere have had a number of unintended consequences, such as a reduction in the number of hours and benefits in the short and mid-term, and expedited automation plans replacing technology and robotics with workers in the long term. For example, Seattle workers experienced a sharp decline in hours with the introduction of increased minimum wages, whereas other similar jurisdictions like Portland and Vancouver did not experience this effect.

One of the key concerns to increases in minimum wage is the impact it has on key groups who earn minimum wage: young people and secondary income earners. 58.4% of minimum wage earners are between the ages of 15 and 24 years. Young people new to the workforce use their ‘first job’ to develop employment skills such as showing up for work on time, professionalism, how to deal with customers, teamwork, and work ethic. These important human capital development skills could be at risk if the opportunity to secure hours becomes difficult. 87.5% of minimum wage earners live in households that live above the Low Income Cut Off (LICO) point. In fact, 2.2% of minimum wage earners support family income. Therefore, the Chamber supports a more progressive Tax Benefit program for workers such as the Earned Income Tax Credit or Working Income Tax Benefit programs offered elsewhere. These programs provide the Government with effective tools at reducing and eliminating poverty and allows employers to maintain hours and benefits for their employees.

Poverty and a widening income gap between the rich and poor affect every community in BC and if left unchecked, our society risks social issues such as systemic poverty, nationalism, and populism. Minimum wage increases will benefit a number of people in the short term but may harm many in the long term, which is why we support Government programs that help support low-income earners through tax benefits.

The Tri-Cities Chamber of Commerce is a proactive network of business-minded individuals that are committed to acting as an accessible, visible, supportive and reciprocal resource to our members and the Tri-Cities at large, communicating their collective voice to help shape a prosperous business community.

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For further information, please contact:

Stephanie Rennie, Communications Manager
Tri-Cities Chamber of Commerce
T: 604.468.6874