VANCOUVER (NEWS1130) – The minimum wage is going up to $10.25 on Tuesday, but some feel wages in general are stagnating, thanks to foreign workers.

The federal government announced last week  that employers will be able to pay temporary foreign workers  15 per cent less than the average wage.

UBC economics professor David Green says usually if there is a shortage of domestic skilled workers, the market adjusts by pushing wages up, but  “what we are essentially doing with this policy is stopping the wage adjustment that would naturally happen in this economy.”

In other words, a shortage of skilled workers typically translates into higher wages. But employers won’t need to entice workers with better pay if they can easily import cheaper labour.

“There are firms that say there aren’t enough carpenters and pipefitters,” Green explains. “But to respond by bringing in more carpenters and pipefitters keeps wages from rising.”

He believes Canada’s increasing reliance on foreign workers shows a stunning lack of understanding about economics.  He says the worker shortage is perpetuated when wages decrease, as Canadians become less inclined to enter those professions, due to the lower wages.

And he says because there is little accountability built into the Foreign Worker Program, companies who say they’ve searched the country for appropriate candidates don’t have to prove it.

Green isn’t the only one sounding the alarm over changes to the Foreign Worker Program.

BC Building Trades says paying 15 per cent less opens the door to abuses and reduces incentives to invest in training and apprenticeship in Canada.

The organization says the government also hasn’t established what an average wage is.

Last year, 300,000 foreign workers were in Canada, 70,000 in BC alone. The numbers represent a 50 per cent increase since 2007.