As potential employees prepare for the Black Press Extreme Education & Career Fair next week, they may be wondering how a recent minimum wage increase may affect their chances of getting hired.
Several business groups have come out against the NDP government’s plan to hike the base pay by 50 cents to $11.35 an hour, effective Sept. 15, and gradually to $15.
“It would appear to be helping people, but it would do more harm than good,” said Richard Truscott, B.C. and Alberta vice-president of the Canadian Federation Of Independent Business. “That extra money doesn’t magically appear or disappear for small business owners.”
READ MORE: NDP to raise B.C. minimum wage by 50 cents
But Michael Maschek, the head of the University of the Fraser Valley’s economics department, said the effects on unemployment are hard to predict and will likely be marginal.
Maschek said there are too many conflicting studies and data available to make any clear predictions.
“Our best evidence seems to change over time depending on studies, and the reason for that is it’s such a difficult thing to study,” he said.
Despite claims by those both for and against minimum-wage increases, Maschek said there is no evidence to back up the most partisan claims on each side.
Economists have historically looked at minimum-wage policy through the lens of supply and demand: If the government legislates a higher price, supply will increase and demand will decrease, leaving excess in the market – unemployment.
But in the last decade, academic studies coming out of California schools have suggested the employment effects are marginal, Maschek said. The studies don’t provide a clear answer for why, but they’ve muddied the mainstream thinking.
“We [economists] can seem to flip flop depending on the studies,” he said.
Seattle became one of the first U.S. jurisdictions to legislate a phased-in $15-an-hour minimum wage in 2014. The base pay there is currently $13 an hour for some businesses.
Maschek pointed to a widely cited University of Washington study as an example of just how tough it is to understand the relationship between wage increases and employment levels. The study appeared to show that working hours decreased as earnings rose, but Maschek says its methods were flawed.
The study compared single-location business in Seattle to those in other Washington Sate cities.
“Many businesses that you would anticipate that would be able to deal with a minimum wage [increase] very well would have multiple locations – they’d be a little larger,” he said. “That’s exceptionally problematic there and of itself.”
With Seattle being the largest city in Washington by far, he said it’s hard to compare to smaller communities.
The messy nature of studying a single policy in a large and complicated economy makes a clear thesis near impossible. But overall, Maschek said the evidence suggests B.C.’s gradual path to a $15 minimum hourly wage will have minimal effects on the employment, while significantly improving the income of low-wage earners.
The Black Press Extreme Education & Career Fair goes from 10 a.m. to 4 p.m. Sept. 28 at the Cloverdale Agriplex (17798 62 Avenue, Surrey).