March 18, 2011
While we here in Canada debate the merits of raising the minimum wage through anecdotal evidence and personal experience, Britain has created a Low Wage Commission that has reported annually to the government on the various effects of minimum wage legislation that was enacted in 2000.
Here is what the commission had to say in 2005:
“There is little evidence that the minimum wage has had any impact on profits at the macroeconomic level. We did, however, find some evidence of small negative impacts on profits at the individual firm level, but not on a scale that led firms to close down or to lay off workers. We found no significant effects of the minimum wage on either prices or overall productivity, although we found some evidence of small positive effects on labour productivity in the service sector.”
In others, while some individual businesses were hurt, there was overall not much effect.
But what’s true for the British is not necessarily true for British Columbians. For one thing, it’s unlikely we would toleration the creation of a collection of bureaucrats to keep an eye on the effects of minimum wage. My guess is that it was established as a way of tempering opposition — some of which was apparently quite rabid at the time — to the original legislation.
Still, there are other differences. We’ve got the HST, which has raised prices for many items. And new drunk-driving legislation has cut consumption of alcohol — along with profits.
The HST may soon be gone if it is defeated in an upcoming referendum. But I have the feeling drunk-driving laws will not be changed. It would be very hard for the government to explain why it is returning to the old limit when the evidence so far shows that lives are being saved.
But what about the minimum wage? Will business lobby groups be successful in scaling back the increases? Not before the next provincial election. The wage hike is proving to quite popular if The Daily News poll is anything to go by. Christy Clark will hold onto those votes for as long as she can.