An increase in minimum wage would usually sound like a good thing for students, but in the case of the recently announced increase in New Brunswick, it may make elusive jobs even scarcer.
The new Liberal government recently announced that New Brunswick’s minimum wage will be increased to $10.30 an hour. The increase will take place on Dec. 31.
Weiqiu Yu, chair of the economics department at UNB, believes that the increase will be most helpful to youth, particularly students.
“For students in particular with the high tuition costs, every little bit helps. For students I would say it’s a good thing because the student population is always on the look for job opportunities. This kind of higher pay would help students,” Yu said.
“It’s going to help those who work on minimum wage and low income, including students. There’s still a significant percentage of people below poverty that require this kind of help.”
Students won’t be the only ones affected by the increase.
“The amount of pay based off of minimum wage is not sufficient for the people who work full-time. Raising minimum wage would actually help those people who are going to be able to improve their condition.”
While raising the minimum wage is a step towards poverty reduction, it is not an end solution.
“Poverty rate is a long battle. We’re in a have-not province and the province economy hasn’t been doing that well.”
However, Yu sees both the good and the bad in terms of the wage increase.
“There are always pros and cons with this kind of thing. Often there are unanticipated consequences. In this case that could also raise some prices should labour cost be a significant cost of running business, smaller businesses in particular.”
Yu also said that the increase of wage will likely increase the unemployment rate for younger age groups. New Brunswick is currently tied for the lowest minimum wage rate in Canada according to the Retail Council of Canada. By increasing the wage, Yu believes that certain labour markets may get more competitive.
“[Businesses] may not be able to hire as many workers or have their employees work as many hours as they were able to before the raise. It’s going to cost businesses more,” he said.
“This is only helping a small group of people, not everybody.”