Raising minimum wages: good intentions, bad policy
As the old saying goes, the road to hell is paved with good intentions. But good intentions alone aren’t enough to justify government policy. Real-world evidence matters.
B.C. Premier John Horgan nonetheless recently announced plans to raise the province’s minimum wage by 34 percent over four years, from its current hourly rate of $11.35 to $15.20 by 2021. Horgan made clear his good intentions when he spoke of lifting “people out of poverty.”
We certainly applaud this sentiment and share the premier’s goal. Unfortunately, the evidence shows that raising the minimum wage is a flawed strategy for achieving this critically important social objective.
For starters, the minimum wage does a poor job of targeting the people we want to help: the working poor. According to data from Statistics Canada, the vast majority of B.C.’s minimum wage earners don’t live in poverty. In fact, 89 percent are not part of a low-income household.