The wage debate: Does higher minimum wage hurt small business or does it help level the playing field?

The wage debate: Does higher minimum wage hurt small business or does it help level the playing field?

‘That extra money doesn’t magically appear or disappear for small business owners.’

  • Aug. 23, 2017 9:45 a.m.

As suggested in the closing of the above article, the hike to B.C.’s minimum wage is getting mixed reaction. Some say it’s long overdue. Others say it is not good news for everyone.

Richard Truscott, British Columbia and Alberta vice-president for the Canadian Federation Of Independent Business says, “It would appear to be helping people, but it would do more harm than good,” and added, “That extra money doesn’t magically appear for small business owners.”

The province announced on last 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 a spokesperson for the Chamber of Commerce, Cliff Annable.

In smaller communities “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.”

Another Chamber of Commerce president Jack Nicholson agrees saying he worries members, especially small operations such as a corner grocer or coffee shop, won’t be able to keep their costs covered and businesses staffed. He says; “Small businesses are not going to be able to afford to hire someone at $15 an hour with no skill.”

READ MORE: NDP to raise B.C. minimum wage by 50 cents

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. It’s very difficult to adjust for businesses.”

The BC Federation of Labour president Irene Lanzinger, responded positively to the wage increase announcement, saying that full-time employees deserve to be paid higher than “poverty wages.”

But Truscott 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 age group most likely to earn minimum wage are 15- t0 19-year-olds.

Truscott is asking the B.C. government to rather tie 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.”

The concern of small businesses in smaller communities, like Vanderhoof, passing the burden of higher wages onto consumers with higher priced goods, is that this will further hurt their ability to compete with big stores in larger centres like Prince George.

Speaking to a local business owner presents another view. It appears that small businesses here often try their best to look after staff and some already pay employees higher than the minimum wage. By increasing minimum wage across the board it effectively “levels the playing field.” Soon competitors will have to pay staff a higher minimum wage as well.

The power lies with the consumer. Choosing to buy local is what will secure economic stability in vulnerable markets.

– with files from Katya Slepian, Black Press