British Columbia has finalized regulations to provide a minimum-wage and basic protections for ride-hailing and delivery workers using app-based platforms such as Uber, DoorDash and SkipTheDishes.
The Ministry of Labour says in a statement the regulations that will take effect on Sept. 3 are a first in Canada.
It says the changes are the result of years of engagement with various stakeholders, and they address workers’ top concerns, including low and unpredictable pay, tip protection and lack of workers’ compensation.
The new rules set the minimum wage for the time a worker is engaged in a job at $20.88 per hour, 20 per cent higher than B.C.’s general minimum wage.
The province says the rationale for adding the premium is that the minimum wage does not apply to the workers’ time spent waiting between assignments.
The rules will also ensure 100 per cent of customers’ tips go to the worker and establish a 35- to 45-cent minimum per-kilometre vehicle allowance to help workers cover their expenses, as well as coverage through B.C.’s workers’ compensation agency.
The regulations will also require platforms to show workers the locations and estimated pay for a particular job before they accept it, and the companies must provide a reason if a worker is suspended or terminated from their position.
So your suggestion is that in order to keep the business afloat, Uber should be allowed to pay their workers less than minimum wage? That doesn’t sound like a reasonable business, and certainly not one I’m willing to support in my province.
This argument also falls flat because other places have done this with no increase in cost. If you look outside of the app job industry, the argument is often made that if the US raises minimum wage, places like McDonalds will get more expensive. But in Europe and elsewhere the minimum wage is way higher than the US, and their prices are not.
Allowing Uber to underpay their workers means we have to subsidize the company by providing welfare for workers who don’t earn enough. That’s coming out of our tax dollars. I’m not personally in favour of subsidizing Uber if their business can only survive by undercutting the people building it.
Ideally, imo, I would advocate for the abolishment of minimum wage in its entirety (this is, in practice, of course, heavily dependent on many other conflicting factors). I believe that the damages caused by a minimum wage outweigh its benefits.
Do you have any sources for this? It is, of course, important to note that minimum wage increases don't necessitate that businesses raise their prices, but it puts an upward pressure on them, as, if they don't, their profits will decrease, and, generally, a business seeks to increase their profits, and they will do so so long as people are willing to pay. Increasing the supply of money available in the market through a minimum wage will induce demand-pull inflation — people have more money so they are more able to buy things, which puts an upward pressure on prices. In addition to that, the increased overhead for employers would induce cost-push inflation.
EDIT (2024-06-23T06:20Z): I was reading this Investopedia page, and the interaction between raising the minimum wage and inflation is more complex than I was initially aware. A specific quote of interest is the following:
These empirical results are quite interesting. I will have to look into this much more. Thank you for bringing it to my attention!
I do wonder, though, if the interactions that the article cites are dependent on the minimum wage already being present — I'd be curious to know what the outcome would be if one started without a minimum wage and implemented one.
Hm, I take issue with this specific language. It's not necessarily underpayment — it's payment that the market has deemed appropriate for the employment given the current supply of it and demand for it. Underpaying implies an official baseline which would only apply in a market with a minimum wage.
Things start to get complicated when one starts introducing other factors like welfare (ie social security income). If there is welfare, depending on how its structured exactly, a minimum wage typically must accompany it, as far as I currently understand things. There are indeed scenarios where welfare could end up subsidizing a company, eg if there is welfare imposed to meet a living wage, but I'm not confident in my knowledge of the specifics.