Monday, September 10, 2012

Dire warnings of lost jobs because of minimum wage increases proved wrong

When Christy Clark made the long overdue commitment to raise the province's minimum wage, the warnings of job losses came from the usual suspects.
The Canadian Federation of Independent Business predicted 32,760 to 199,560 lost jobs - a catastrophe. (That's based on CFIB's projection of jobs lost for each 10 per cent increase in the minimum wage.)
The Fraser Institute projected job losses of 26,097 to 57,194.
So what happened?
In April 2011, the month before the first of three phased minimum wage increases, 2,273,000 British Columbians were employed. Last month, StatsCan reported 2,323,000 people were working in the province.
You could argue that the jobs were still lost because of the minimum wage - that the number of people working would be even higher if the minimum wage was still frozen at $8, as it was since 2002.
But not very convincingly. B.C. job growth was 2.2 per cent, compared with a national average of 1.3 per cent. If the CFIB's mid-point projections were accurate, then employment in B.C. would have increased 5.5 per cent without the minimum wage hike - more than four times the Canadian average. That's not credible.
Minimum wage opponents could point to the loss of 29,000 part-time jobs in the period. But part-time work was down across Canada, and B.C. gained 79,000 full-time jobs.
The job numbers raise another question. The period covered is basically the same as Clark's time as premier, which has featured a jobs' focus. The increase in employment is better than the Canadian average, and growth in full-time employment is much better - up 4.5 per cent in B.C. compared with 1.9 per cent across Canada. (Part-time job performance was worse than the Canadian average.)
So why isn't Clark getting the credit? (A poll today confirmed her ranking as the second least popular premier in the country.)
Partly, perhaps, because the Liberal government's overall record is still worse than average.
There are still slightly fewer people working in B.C. than there were four years ago, when the recession was beginning to bite. Across Canada, employment has increased by 2.5 per cent in the same period.
The gap is even greater for full-time jobs. B.C. full-time employment is down two per cent; the Canadian average is up 1.9 per cent.
And partly because voters have come to recognize that governments have much less to do with job creation, and job losses, than politicians like to claim.

1 comment:

Anonymous said...

Where are the Canadian Federation of Independent Business and Fraser Institute's response to your questions PW?