Minimum wage increase may not be a good thing

Jocelyn Turner
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After a busy lunch service, Pat Landry, dining room manager at Bella’s Café and Bistro, works on some receipts. Small businesses like the café may have to make some changes when the minimum wage for their employees increases in April

AMHERST – 15 extra cents an hour may seem like a great thing to anyone working a minimum wage job. But small business employers may not be singing the same joyful tune.

Jennifer English, Canadian Federation of Independent Business senior policy analyst said although the small increase could have more negative effects, especially on low-income earners. Without making some other changes, small businesses and their employees won’t be bringing in any benefits from the increase.

“Our members are already reporting significant cost constraints,” she said. “An increase in the minimum wage is just one more pressure in that already challenging mix. On one hand, it’s not just the additional 15 cents, it’s the other payroll taxes that are associated with that. On other hand, part of that upward pressure is that people who are already earning that $10.30 an hour want a raise.”

 Although raising minimum wage may seem like a good idea, Rick Sangster, the manager at Bella’s Café and Bistro, said for small businesses, it could mean some cut backs. But the café, he said, is already functioning with small staff.

“We’re running on barebones right now anyway,” he said. “Future consideration is we’d be hiring two more staff for the summer.”

Sangster said employers have to work with the minimum wage increase and make cuts where need be.

“It may require you to have less hours available but people would still be employed, fewer hours to compensate for the increase,” he said. “(The employees) pretty much understand. It’s one of those scenarios where, ‘we’d love to have you work here but no, you’re not going to be getting 40 hours.’ It might only be 32.”

Juggling these sorts of obstacles, Sangters said, can put managers of small businesses in a difficult position. He said it usually means he, as a manager, and the senior staff end up doing a bit more work.

“It’s business, it’s a juggling game,” he said. “When you don’t have business going on, you don’t schedule staff for it and when you do have the business, then you can sort of compensate for the increases.”

Amherst and Area Chamber of Commerce president David Mosley said with an increase in minimum wage comes an increase in expenses for employers. But, he said the town does have a few good small businesses who work hard to keep themselves and their employees thriving.

“We’re very fortunate that they have kept their people for a long time and they provide pretty good service but the one that can’t seem to get to that point, it’s going to be hard on them,” said Mosley. “Because obviously they’re running very small margins, very close margins. They’re either going to have to cut back on their services in regards to the amount of people that they have there or they’re going to have to do business differently.”

Mosley said the whole system, in regards to minimum wage and expenses, needs to be restructured. He said employers work very hard in small areas like Amherst in order to do business because of the rules and regulations that are set up because for years, governments, municipalities, towns and provinces have catered to big businesses.

“You want to know how the small retails survive? They have a bit of the market on the weekends, on Sundays. They provide a service locally,” said Mosley. “Most of them have closed. Why? Because the big stores wanted that market. What do you have? No service and no jobs.”

What he’d like to see, Mosley said, is anyone with a job be employed by someone who can afford to pay them and look after their benefits and a decent wage. Although some jobs do pay more than others, he said there is way too big of a gap between what some employees are paid compared to others.

“There’s a problem and it has to be addressed,” he said. “I don’t care if you work at a convenience store or what you do, you still have to work and you work as hard as someone else who is getting a $60,000 a year job. So there’s no fairness.”

Mosley said if things were structured differently, these stores and other businesses who are trying to survive on a lower wage would be able to have more room to make enough money to pay their employees better and provide a better service. By doing this, Mosley said these retailers and stores would be able to increase their sales.

“There’s a cost to doing everything, whether you do it wrong or you do it right. Right now, I think we’re doing a lot of things wrong,” added Mosley.

jturner@amherstdaily.com.

Twitter: @ADNjocelyn

Organizations: Canadian Federation of Independent Business, Amherst and Area Chamber of Commerce

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Recent comments

  • Peter
    February 10, 2013 - 22:33

    I work for a local company that might be affected by this as well but the company I work for has no business moral. There are no incentives to go "above and beyond". I fully agree and support local business but if they are not going to change with the times and properly structure to the needs and wants of the clientele then they are going to have to succumb to the larger industries. You don't have to offer health plans and such but at least make sure your employees are appreciated!!!

  • Frank
    February 10, 2013 - 12:44

    Quote: Although some jobs do pay more than others, he said there is way too big of a gap between what some employees are paid compared to others. “There’s a problem and it has to be addressed,” he said. “I don’t care if you work at a convenience store or what you do, you still have to work and you work as hard as someone else who is getting a $60,000 a year job. So there’s no fairness.” End Quote That sounds an awful lot like communism to me, and that hasn't' worked out very well so far. And then there's this; someone working at a convenience store works just as hard and is just as valuable an employee as a professional who makes $60k/year working elsewhere? Give me a break...

    • Benzel Washington
      February 11, 2013 - 19:52

      Wow Frank. Fair pay does not equal communism. Whats going on right now is a corporate dictatorship so a communist regime would probably be a welcome change anyway. Companies go out of their way to pay as little as possible for profitable jobs and the government is aiding and abetting.