Businesses suffering after recent minimum wage hike
Many businesses in St. Albert are feeling the pinch after the most recent minimum wage hike in Alberta.
On Tuesday morning, the St. Albert Chamber of Commerce hosted a round table discussion with local businesses and Alberta Chambers of Commerce President and CEO Ken Kobly.
“This is one of the largest issues that we have dealt with in the 13 years I have been with the Alberta Chambers,” Kobly said.
Many businesses expressed their frustration with the NDP government’s recent increase of the minimum wage from $12.20 to $13.60 an hour as part of the plan to hike minimum wage to $15 .
Businesses expressed frustration not just with the increase to minimum wage, but the overall increased costs of doing business in the province.
The former owner of Little Einsteins Daycare, Curtis Stewart, said that he was forced to sell his business to an Ontario company because he could not handle all of the increased costs.
Stewart said that for every dollar that minimum wage went up, it would cost him $250,000 per year. Many businesses were able to scale back their employees when wages went up but Stewart said that decreasing employees is not possible in childcare, as there are government mandated ratios of children to employees.
“The more children you have the more labour you have to have. You can’t scale back on labour,” Stewart said.
The former business owner said that the daycare used to have a fitness instructor, music instructor and field trip coordinator who all lost their jobs due to increasing costs.
“It was just heart-wrenching. It’s just kind of unbelievable,” Stewart said.
The business also saw increased costs from the higher price of food, higher utilities and property taxes.
The company had to pass along the extra costs to parents, and Stewart said that many of them cannot afford the cost increase.
Along with rising minimum wage costs, Kobly said that businesses are suffering because of the low loonie, the carbon levy, the changes to the federal small business tax, the recession and the removal of the cap on WCB premiums announced on Monday.
“Every change you make, no matter how small it is, is going to add to the layer of costs to the business,” Kobly said.
Business owners were distressed they were not able to hire as many teens or offer their strongest and most skilled employees wage increases because they were paying for rising minimum wage costs for their other employees.
Ray Davidson, the owner of Booster Juice franchise locations, said that he has drastically reduced the number of high school students working for him. Before the minimum wage increase 85 per cent of his employees were high school students, but now that number has dropped to 35 per cent.
Some businesses said that they would prefer to see a tiered minimum wage structure in place so they could continue to employ high school students at a lower cost to the business.
All of the businesses agreed that the provincial government lowering the small business tax was not enough to offset all of the increased costs to businesses.
Minimum wage will hit $15 dollars an hour in Alberta in October 2018 when it will be the highest in the country.