The Pallister government’s decision to tie annual minimum wage increases to the rate of inflation is a good move. It’s fair, it’s reasonable and it’s a perfectly acceptable compromise to what will always be a polarizing debate between business groups and organized labour.
It’s a solution I recommended in a column last fall when the Pallister government decided not to raise the rate for 2016. Under Bill 33, the Minimum Wage Indexation Act, the minimum wage, currently $11 an hour, will go up every year on Oct 1 by the rate of inflation from the previous year. This year the wage will rise to $11.15.
It will be adjusted to the nearest 5 cents every year. And government will have to publish prior to April 1 what the minimum wage will be in October.
That way businesses can prepare for the increase and everyone will know what to expect.
Naturally, the compromise will never satisfy either side in this debate. Business groups typically want no increase at all and would prefer the market determine how much entry level workers should be paid. By contrast, the political left, including the NDP and union leaders, want extreme government intervention, demanding the rate rise to over $15-an-hour, which would result in an immediate wage shock of close to 40%.
Tying the wage to inflation falls somewhere in the middle. It offers predictability and it ensures the base wage keeps pace with the cost of living over…
click here to read more.