There are various ways to look at the $15 minimum wage. One is as a disaster – an attack on small business that might break the back of some enterprises. That sort of alarm is being spread – often by people with a political agenda.
In his presentation to the Slave Lake Business Support Network on Sept. 21, Northern Lakes College business instructor Tom Bidart attempted to leave the politics out of it and present perspectives some may not have thought much about.
For starters, he said, higher wages can be looked at from the point of view of “incentive, attraction and retention,” of employees.
Bidart’s next point was to look at a case study. He said the State of New Jersey implemented a higher minimum wage law a few years ago – while neighbour Pennsylvania didn’t. The outcomes were studied and the result was a 3.1 per cent increase in prices (in the fast-food sector) in New Jersey, and no reduction in employment.
Another way of looking at it: Alberta’s minimum wage will still be lower than other provinces in relation to the median income (41 per cent vs. 43 per cent in Saskatchewan and 47 per cent in Ontario).
Other factors: “Sixty-seven per cent of minimum wage earners are not teenagers. Forty-five per cent are parents.”
Bidart added that $15 an hour isn’t even a living wage – defined as enough to support two adults and two children.
Boston Pizza owner Tyler Warman led off the discussion on the topic. He’s not against a higher minimum wage, he said, but it is having (or will have) “a huge impact on us. We’ve crunched the numbers.”
What the number-crunching has told him is that with a large percentage of entry-level workers on staff, the increase in cost to the business will be “a lot more than three per cent. But we can’t pass it on to the customer.”
The alternative is to carry on business with fewer staff, which is exactly what Boston Pizza is doing, Warman said. Where the store used to have 80 staff it is now operating with around 60, and aims to cut that even further by the time the $15 per hour minimum wage kicks in next year.
“It will have a significant impact on our customer service,” he said.
In the ‘round-table’ portion of the discussion, most business reps were against the higher minimum wage or at least leery of it.
“We are thinking how we will survive,” said Fas Gas owner Khadim Hussain. “We are totally against this.”
“It’s a big concern for us,” said Pierre Gauthier of The Fix coffee bar and restaurant. He added September was shaping up to be the best month ever for the relatively young business.
Bruce Allarie of Allarie Cleaners said they’ve informed their bigger clients that costs will be going up. The company also has also quit hiring kids under 17 years of age, precisely because of the higher minimum wage situation. Others mentioned the same dilemma i.e. where a 15 year-old kid, coming on in a part-time role, might be making as much or nearly as much as a full-time, older employee. It makes things complicated, and not hiring younger people is one way of dealing with it.
Munir Mughal of Mary Brown’s Chicken predicted that “some businesses are going to close their doors because of this. We have to increase prices,” he said.
On a brighter note, Mughal said that “business is not bad the last couple of months.”
Warman added that Boston Pizza is also seeing decent traffic lately, which he attributes to out of town visitors. Bidart said the business he and his wife operate (TA’s restaurant) is “improving,” lately as well.
The Business Support Network meets over lunch on the third Thursday of the month, excluding July and August. It is a project of Community Futures – Lesser Slave Lake, in conjunction with local businesses. Robin-Lee Vance of Community Futures encouraged attendees to spread the word and also suggest topics for future meetings.