Why Small Business is Concerned About the 15 Dollar Minimum Wage

Atlantic Canadian small business owners should start bracing themselves for the 15 dollar minimum wage campaign. The governments in Alberta and Ontario have both bought into the idea, and now British Columbia’s new ‘GreeNDP’ coalition is putting it on the table. It’s being driven principally by Canada’s largest labour unions and a coalition of the federal and provincial NDP and social activists.

Let’s be clear, the Canadian Federation of Independent Business (CFIB) is responsible for advancing the interests of our members, small- and medium-sized, independent businesses. Firms ranging in size from your mom and pop shop to companies with up to 500 employees. CFIB has led awareness on this 15 dollar minimum wage issue because these are the businesses who will suffer, shrink or die with such a sudden spike in labour costs.

Because of their size, the Loblaws, Walmart and Shoppers Drug Marts of the world will be much better positioned to absorb this shock, but make no mistake, they will also be shedding staff, cutting hours and eliminating opportunities for young, entry-level workers, who make up the vast majority of those who are earning a minimum wage.

Most CFIB members already pay well above minimum wage for employees as most small businesses understand the importance of valuing and retaining staff. CFIB certainly has no argument with improving pay and benefits for employees when appropriate and our members support these efforts.

Our argument is with a government mandated spike in the wage floor which will put the sustainability of small business in peril. Remember, this is not just about entry level workers, a 32 per cent increase in the wage floor will put enormous pressure on employers to increase the wages of all staff.

Armine Yalnizyan, a principal advocate for the 15 dollar minimum wage and an author of the Canadian Centre for Policy Alternatives’ (CCPA) Inequality Project, clearly stated this week, “Yes there will be a reduction in some hours, some jobs, some businesses. No argument there. And most vulnerable workers (teenagers and newcomers) will bite the bullet first, particularly when there’s a downturn in demand.”

Her comments are remarkable unto themselves, but I would also ask, what is the acceptable casualty rate? How many hours should be cut and how many young workers should lose their first jobs? How many businesses are they prepared to sacrifice to hit this arbitrary target?

And where will this new money for wages come from? Will it come from increased profitability? That seems unlikely in light of increased labour costs. Will it come from stronger employment? That’s not happening as, it seems everyone agrees, these higher wages will inevitably lead to reduced hours and/or job losses. Will minimum wage workers suddenly become 32 per cent more productive? Unlikely.

Finally, our region’s economy is far more fragile than Alberta, Ontario or BC. If there are politicians musing about this here, we would ask they understand the repercussions of this kind of wage spike before we even think about such a move in Atlantic Canada. We’ll have the opportunity to watch how this experiment plays out in those other province’s economies first. Fortunate for us, not so much for them.

This originally appeared in the Chronicle Herald, June 9, 2017

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