Minimum wage workers in the Hills will get a small boost in their paychecks this week, but some small businesses and advocacy groups worry about how the increase will affect them.
Starting May 1, minimum wage employees earned $14.25 per hour, up from $13.50. Servers and bartenders now make $11.40 per hour, as the government also increased the tipped minimum wage by $0.60.
Wakefield General Store director Julie Arsenault said that although she had planned for this annual wage increase, it’s still a tough cost to swallow for a small business in the Hills.
“I think it’s a difficult time to do business,” said Arsenault. “The goods that we purchase – all of those costs have gone up. So, those costs get carried onto the consumer, who may decide to buy less or make different choices. For example, meat is very expensive. So, people may choose to buy less meat and more vegetables,” she continued.
Inflation and the ongoing worker shortage has impacted small businesses across the province, and the general store is not immune, said Arsenault.
“It’s also been very difficult for us to find people who want to work,” she said.
“Because of where we are and what the labour force is like in Wakefield – the only ways to encourage new people [to work for us] is by giving people a good wage and employee benefits.” In an effort to retain employees, the general store offers health plans to its employees.
The Canadian Federation of Independent Business (CFIB) worries that small businesses aren't prepared for such an increase - especially at a time when they are still recovering from COVID-19.
CFIB director for Quebec Francis Bérubé said the province should slow the minimum wage increase so that small and medium-sized businesses can have time to find financial footing in post-pandemic times.
Representing 20,000 Quebec business owners, Bérubé urges “the government to think of the impact of the rising minimum wage.”
His organization released a report to explain how the minimum wage increase will negatively impact small to medium-sized businesses in Quebec. It argues that the salary increase hinders businesses' ability to pay off debt. The study states that seven out of 10 small to medium businesses in Quebec accrued debt during the pandemic–averaging $100,000.
“One of the impacts that we see is that when minimum wage increases, it can have a domino effect with the other salaries,” he said. “If you have employees who make two dollars more than minimum wage, that employee will now ask for a raise.” In consequence, employers are burdened with costs that they might not be able to fulfill.
However, labour unions like the Fédération des travailleurs et travailleuses du Québec (FTQ) and the Centrale des syndicats du Québec (CSQ) would like the province’s 301,100 minimum wage workers to earn a minimum of $18 per hour.
According to the FTQ, the government raises the minimum wage according to the cost of basic needs like shelter, clothing, commuting costs, and food–this is how they came up with the $14.50 number. But in the opinion of this labour union, a person cannot lift themselves out of poverty on under $18 per hour and 35 hours per week.
Also, a higher minimum wage helps workers like Blair Cross, save for his future.
A minimum wage employee and St. Mike's high school student, Cross is happy to scoop ice cream at MaBoule for an extra $0.75 per hour.
“It’s nice to get a little more spending money,” he said. “I’m already saving up for a car, so I was happy to hear about the increase.”