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BC Libs use Ontario minimum wage figure, skip Fraser Institute study

B.C. Liberal Party candidates, including Premier Gordon Campbell earlier this week, have repeated that the New Democratic Party's proposal to raise the minimum wage from $8 to $10 an hour would kill 50,000 jobs.

But when asked where that figure comes from, a party official cited a two-year old Ontario study instead of drawing on more recent research from the Fraser Institute.

“Certainly ours would be the most recent and up to date,” said Niels Veldhuis, the Fraser Institute's director of fiscal studies and an author of January's The Economic Effects of Increasing BC's Minimum Wage. “It would make most sense to use ours, that's for sure.”

Veldhuis' report found that a $2 increase in the minimum hourly wage would drop between 25,000 and 52,000 jobs from the provincial economy.

Rather than use the Fraser Institute report, however, the Liberals cite a 2007 report by University of Toronto professor Morley Gunderson that estimated “a 25 percent increase in the minimum wage could lead to a 7.5 percent to 15 percent reduction in teen employment, with limited evidence suggesting it could be twice that amount.”

The party then calculated that a 15 percent reduction of the 363,100 youth that B.C. Statistics counted as working in the province in 2008 would mean about 55,000 jobs lost, roughly the same as Veldhuis' prediction.

Labour and Citizens' Services minister Iain Black was identified as the spokesperson on the issue, but did not return the Tyee's call by posting time.

“I think they're wise not to quote the Fraser Institute,” said Seth Klein, B.C. director for the Canadian Centre for Policy Alternatives. “I think they're not credible.”

The Fraser Institute has argued both that a raise would kill jobs and that young people would quit school to work, he said. “You can't simultaneously make both arguments,” he said. “People aren't going to drop out of school to chase jobs that aren't there.”

The rate should be at least $10.60 an hour, enough to bring someone working full-time to the poverty line, and indexed to inflation so increases are gradual and predictable for everyone, Klein said. “There's nothing unreasonable about that,” he said. “Pegging it to the poverty line makes sense.”

While the Liberals might not be using the Fraser Institute's study, the NDP did cite it in an April 16 press release to show how many people in B.C. earn less than $10 an hour.

“That's interesting,” said Veldhuis. “At least they're giving credibility to our research. That's a positive sign . . . We just put the stuff out there. Hopefully everyone picks it up.”

Andrew MacLeod is The Tyee’s Legislative Bureau Chief in Victoria. Reach him here.

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