Small business owner says NDP’s proposed $15 minimum wage will decrease sales, threaten employment
Alberta’s NDP government has promised to raise minimum wage to $15 an hour by 2018. According to the government, the increase will inject money into Alberta’s slumping economy; however, some small business owners say the move is going to do more harm than good.
“At the end of the day, we are risking those businesses’ being able to stay open and we are risking their employment because those businesses will have to lay off their employees,” says John Evans, the owner of Bumpy’s Café in Calgary.
Evans says he estimates that for every dollar minimum wage increases, he will have to raise his prices by nine per cent. He says this will result in a 35 per cent increase in sale prices by the time the wage reaches its $15 per hour plateau in 2018.
Evans says he understands the benefits of raising the minimum wage, but he does not think the NDP government fully understands the implications it may have for small businesses.
Evans says raising wages is indirectly reflected in the price of goods and services, food costs, and the price restaurants pay for leasing their space.
“Don’t kick us while we are down. We are already hurting” – John Evans
This is all happening at a time when sales are down in the service industry. Evans estimates that his cafe is down nine per cent in sales this year alone and he says he fears the minimum wage increase could impact his sales further.
“People are being very cautious right now because they don’t have much job security, they are pinching their pennies,” says Evans.
With job security being a big problem in Calgary, Evans says he does not think it is the right time to implement a policy that could put more jobs at risk.
Evans has been in contact with various members of government, including Premier Rachel Notley, and is urging politicians to consider whether this is the best time for a wage increase in Alberta.
“Don’t kick us while we are down. We are already hurting,” says Evans. “We are suffering in our sales and we are not saying this doesn’t need to happen, but we need to do it smart, and we need to do it better.”
Some industry watchdogs are also cautious about the minimum wage increase in Alberta. Mark von Schellwitz, vice-president of Restaurants Canada, says the timing of this increase may have a negative impact on the industry.
“We will certainly make the case if our employment rate lowers, or our employees are losing hours,” says Schellwitz. “The last thing I think we all want is less job opportunity for young people in Alberta.”
Young adults make up the majority of restaurants and hospitality employment in Alberta. Schellwitz says if raising minimum wage has a negative effect on their employment, then the plan is a failure.
“We are not against wage increase, but they have to be reasonable, and absorbed into our business plan,” says Schellwitz.
However, some organizations are hopeful that the NDP’s plan will benefit the economy as well as low-income earners.
“People are going to be able to buy more,” says Franco Savoia, the executive director of Vibrant Communities Calgary, a non-profit organization that aims to reduce poverty.
He says that the minimum wage increase will not have the negative effects on Alberta’s economy that some are anticipating.
“We say ‘oh that’s not very much money’ but when you’re literally living so close to the edge, if you put more money in my pocket, I’m going to spend more. It will create more economic activity because people are going to spend this money somewhere.”
But the future of the wage increase is uncertain. Premier Rachel Notely announced Dec. 16, that the NDP may not reach its $15 an hour goal by 2018 if the economy continues to decline.
The Calgary Journal reached out to the NDP for comment but at the time of publishing had not heard back.
For more information on the Alberta minimum wage increase, please visit: The Five Year Plan