Freeze Minimum Wages, Business Group Says
The group argues that provincially regulated increases to minimum wages cause small businesses to either cut jobs, reduce staff hours or postpone new hires. Using their own estimates, they say a 10% increase in minimum wages against all provinces would cost the Canadian economy up to 321,300 jobs.
"At a time when the economy is in slow recovery, the last thing governments should be considering are policies that further hinder job creation," said Marilyn Braun-Pollon, CFIB's Vice President for Saskatchewan and co-author of the report.
Minimum wage rates currently range from $8.00 in British Columbia to $11.00 in Nunavut. British Columbia is the only province that has not increased its minimum wage since 2001.
"Governments should consider all other alternatives in place of minimum wage increases so that small businesses' ability to create jobs is not compromised," Braun-Pollon said. "It's time provincial governments are held accountable for the ineffectiveness of their minimum wage policies."
However, there is a gaping hole in the CFIB's argument. Minimum wages are increased every now and again in order to make sure that workers' wages keep within a decent range to the cost of living. Instead of raising minimum wages to keep up with the cost of goods and services in the economy, the CFIB suggests "alternatives," which could be in the form of tax relief or training opportunities. Either way, it appears the CFIB wants tax payers to take on some responsibility of making sure Canadians can afford to live rather than make employers pay workers on the minimum wage what their time is truly worth.
Then, of course, there is the economic counter argument: workers on very low wages tend to spend increases on money on paying for rising living expenses and the odd social activity, thus injecting the money back into the economy and back into business. In effect, it works as a stimulus to the economy and to business.
My niece is a case in point. She works at a B.C. ski resort on a wage of $8 an hour in a position where she does not receive tips. Her $320 a week goes almost entirely toward paying her rent in her sparsely furnished home, utilities and grocery expenses. She is always in debt and there are many things she would love to buy. Any additional money she earned would most definitely be spent, and fast.
The CFIB is correct in suggesting that minimum wage increases could hurt businesses, but in order for this to be the case, minimum wage increases would need to run rampant and outpace the rate of inflation over a sustained period of time, and this is not the case.
A balanced and controlled approached to minimum wage increases is more beneficial to the economy in the long run. If a business can't afford to pay a worker what their time is worth, then perhaps they should not be in business. In a capitalist world, someone will always come in and fill the gap if there is sufficient demand.