An NDP plan to increase the province’s minimum wage is causing concern among Albertans, who feel that going from the current $10.20/hour up to $15/hour over the next three years could have detrimental effects on businesses, and result in a trickle down effect for consumers.
“It’s going to be an issue if it goes up to $15 per hour,” says Alice Herperger, St. Paul & District Chamber of Commerce president, and a St. Paul small business owner. “Absolutely, it’s going to hurt small business.”
Although Herperger says she is in favour of a minimum wage increase of sorts, jumping to $15/hour isn’t what she has in mind. When looking at her own business, she says she could do the $15 an hour, but it would likely result in laying off a student employee, and cutting other staff hours.
“There’s no way I can recoup that kind of a cost,” says Herperger, adding, “I wish I could give everybody a super good wage.”
In turn, Herperger says she would have to increase the cost of products she sells at her business, the Jungle, resulting in consumers being affected too.
“It’s not a smart move at this point,” says Herperger, pointing to the current economic situation in Alberta. She explains that overall, her staff are paid more than minimum wage, because she understands that people have bills to pay, “and I know people struggle on minimum wage.” But, she believes business owners should also have a say, since the situation is different when taking into account student employees who are working for extra spending money, rather than paying bills or supporting a family, for example.
Herperger recommends the NDP government take a step back and look at the situation before making any changes. “Small business runs the towns,” she says, adding, if the province wants to ensure local economies remain healthy, increases to minimum wage needs to be thoroughly considered.
On May 29, the province announced it would be taking the next steps to raise minimum wage in Alberta.
“The existing formula for minimum wage increases, based on the consumer price index and average weekly earnings, was inadequate,” says a media release from Jobs, Skills, Training and Labour. “As such, our government will undertake targeted consultations with key stakeholders through the month of June to establish a new path forward.”
Over the month of June, meetings will be held with industry associations representing employers who typically employ minimum wage earners, along with other groups.
The “phased increases to minimum wage” could begin to take effect as early as Oct. 1.
Although Alberta’s minimum wage of $10.20 is among one of the lowest in the country, most provinces and territories fall at or below $11/hour, according to the Retail Council of Canada website.
Tamara Champagne is another business owner in St. Paul who isn’t in favour of the increase to $15/hour. She is the owner/operator of TLC Daycare and says the changes would certainly have an effect on the prices parents pay for child care.
“It would effect people differently,” she says, adding, although it could be good news for some of the parents she deals with that work in jobs where wages are near minimum wage, it would in turn result in Champagne having to increase child care fees so that she could continue to pay her own employees.
A family with three children and a single parent would certainly notice a substantial increase in fees if the minimum wage were bumped up. Champagne adds that other changes would likely occur within her business, such as the food served to children during the day, to help mitigate costs.
She recommended that a better solution could be to increase a universal subsidy for childcare, and help out parents that way. TLC Daycare has seven full-time staff, and as of Oct. 1, two of those staff would be affected by the minimum wage increase, with all staff wages being affected the following year.
When speaking to County of St. Paul council at last week’s regular meeting, Lac La Biche-St. Paul-Two Hills MLA David Hanson said he felt the proposed minimum wage increase by the NDP government was “another nail in the coffin,” during an economic downturn.
The increase would be tough on small business, said Hanson, adding, he is hopeful the NDP government will come to the table calmly regarding similar issues, rather than “shoot from the hip.”
When the Journal asked readers for their input on the issue, some “definitely” agreed with the minimum wage increase, but many others disagreed.
“It would mean higher taxes, more people losing their jobs, could put a person in the next tax bracket, which would mean less take-home pay. Corporations would move out of province which would mean more lost jobs, and higher prices to pay for groceries . . . Doesn't sound like a very good move to me,” said one reader.
While another added, “In a perfect world it would be nice if everyone could get paid more for doing the same job, particularly those struggling to make a living. But in reality, there will be an economic trickle down effect. When you manipulate the cost of labour by a significant amount where do you think the extra money comes from?”
Others noted that workers should be ok with starting at the bottom and working their way to the top, and for many, making minimum wage is a direct result of choosing not to further their education.
Others agreed that although an increase is likely needed to Alberta’s minimum wage, right now is not the best timing.
“This wage needed to come at a better economical time. Employers can barely afford to keep employees as it is. Alberta has one of the lowest minimum wages in Canada and one of the highest costs for living. I agree we needed a raise, but this is the wrong timing.”
The Alberta Chambers of Commerce is one group that is hosting a survey to gauge the impacts that a significant minimum wage increase could have on businesses. The survey is available on the ACC website, with results being sent to the province.
