The hike to B.C.’s minimum wage is not good news for everyone, according to the Canadian Federation Of Independent Business.
“It would appear to be helping people, but it would do more harm than good,” said B.C. and Alberta vice-president Richard Truscott. “That extra money doesn’t magically appear or disappear for small business owners.”
The province announced on Tuesday it would be raising the minimum wage by 50 cents in September and up to $15 by 2021. The fall increase would take regular minimum wage workers to $11.35 and those who serve liquor to $10.10.
That means costs will be out-of-reach for some already-struggling businesses, according to South Surrey and White Rock Chamber of Commerce executive director Cliff Annable.
“The main business we have are the mom and pop shops,” said Annable. “And the more wages you pay, the more you have to contribute to Canadian Pension Plan and such.”
Greater Langley Chamber of Commerce president Jack Nicholson said he worries their members won’t be able to keep their businesses staffed.
“How does the government feel this will not have a negative impact on small business, in their ability to cover costs in small operations such as a corner grocer or coffee shop?” Nicholson wrote in an email. “Small businesses are not going to be able to afford to hire someone at $15 an hour with no skill.”
Truscott said a recently released University of Washington study suggested that what he called “arbitrarily raising” the minimum wage only forces smaller employers to cut back on hours, staff and reduce training programs.
“Why not hike the minimum wage to $25 or $50 and everyone will be better off?” Truscott said. “Fight for 15 makes a good election slogan or snappy chant at a campaign rally, but it’s very difficult to adjust for businesses.”
He shot back at BC Federation of Labour president Irene Lanzinger, who said after Tuesday’s announcement that it wasn’t fair to pay “poverty wages” to full-time employees.
“Let’s be clear here, these are entry-level jobs,” Truscott said. “If someone is trying to support a family, that’s not the point of a minimum-wage job.”
He said he would rather see more training programs for low-wage employees hoping to further their careers, instead of a move he thinks will “destroy” opportunities for those who are hoping to land their first job.
The latest available data from Statistics Canada suggests the two age cohorts most likely to earn minimum wage are 15- t0 19-year-olds and 35- to 64-year-olds, at 39.8 per cent and 24.8 per cent, respectively.
Truscott is asking the B.C. government to instead tie any minimum wage hikes to inflation.
“Anything beyond that, you’re going to be damaging the viability in small business to create jobs or even exist in some instances.”
For his part, Annable worries that money spent in U.S. border towns like his will simply trickle south.
“My first gut reaction is that it won’t be spent in their community,” Annable said. “In South Surrey-White Rock people go across to the States to shop.”