Small businesses fearful of minimum wage hike

Andrea Roberts
Times Contributor

 

One of the NDP’s election platforms, to increase the minimum wage to $15 by 2018, is raising concern among many Alberta businesses including many small, local businesses who fear for their future.
“This increase in minimum wage does scare us and a lot of other industries that will be affected,” said Barb Stefanich and Linda Oberg, the owners of the Red Carrot in Strathmore.
“We definitely think it will be detrimental to small businesses. We can’t raise our prices which means we are going to have to have less staff and less service.”
The Red Carrot is one of the small businesses that will be affected by the wage increase. As a small business they already offset their employees wages with discounts to the store. The owners fear that the increase won’t just affect small businesses or those that pay out minimum wage, but also the economy as a whole. Furthermore, big businesses might have to leave the province in order to operate in cheaper environments, which will hurt the economy. They also reason if you raise minimum wage then you will have to raise everyone’s wages and because of this everything will increase in prices making the standard of living a lot more expensive.
“But really the extra money isn’t going to be there or help anyone because the price of everything is going to go up,” the owners agreed.
The thought is also shared by some economists, like Todd Hirsch, ATB Financial’s Chief Economist, who said that increasing the minimum wage is like using a blunt tool to fix poverty.
“If you raise it for one you have to raise it for all,” said Hirsch.
However, both Hirsch and the Red Carrot owners agree that some workers who earn minimum wage should be earning more compared to others.
Currently the minimum wage in Alberta is set at $10.20, and $9.95 for those who serve alcohol, whereas the new wage will have a 42 per cent increase. According to a wage profile proposed by the government of Alberta only 2.2 per cent of employees earn minimum wage in the province and of those the majority, at 39 per cent, are in the 15 to 19 age range. According to Hirsch if the minimum wage spikes, teenagers may face termination first, in order for the company’s survival, and the Red Carrot feels they will have to follow suit.
Because small business owners may not see the value in working harder for less reward, Oberg and Stefanich lack faith in the businesses’ survival when the proposed changes take effect.
Yet the government is telling people not to fear for they have a plan. Jay Fisher, a government public affairs officer in charge of jobs and the workplace, said that the government understands that people are afraid and oppose the idea. The government has been in talks with employers, businesses, and representatives of minimum wage workers to see how the increase will be implemented. The government also plans to introduce the increase in increments rather than it being introduced overnight.