Tie growing minimum wage to lagging consumer price index, group says
Notice was timely but still pressures businesses, GCACC says
The five-month notice for P.E.I.'s minimum wage increase is timely, but there's much more to be done to make it fair for retailers across the province, says the Greater Charlottetown Area Chamber of Commerce.
We think that providing predictability really is helpful for both the employee and the employers.—Penny Walsh McGuire
The province announced Thursday that the minimum wage would rise to $11.55 an hour in April.
P.E.I.'s minimum wage continues to climb ahead of the Consumer Prince Index — an indicator of changes in consumer prices for goods and services in the province — which is pressuring businesses across the province, said Penny Walsh McGuire, the chamber's executive director.
The group represents about 1,000 members, representing more than 18,000 employees in small, medium and large businesses in the capital region. It suggested P.E.I.'s government to get on board with other provinces in the region that have made the move to rope the two together to close the gap.
"The difference that we've determined is it is quite a gap, showing minimum wage has increased since 2008 by 41 per cent with CPI only at 12," Walsh McGuire said.
While businesses aren't talking about closing up shop, she said, the growth is pressuring businesses to make decisions on wage budgets and maybe even reduce their workforce.
'Razor thin margins' for business owners
This has led the chamber to call for government to tie the lagging price index with the fast-growing minimum wage.
Walsh McGuire hopes it would add a level of "predictability" and fairness for employers to manage budgets ahead of time.
"Our economy is in great shape and certainly we see growing industries and growing sectors but we do need to consider the razor thin margins that business owners are operating in, specifically in the retail sector," she said.
"We think that providing predictability really is helpful for both the employee and the employers. It allows the employers to plan and how they'll compensate for the coming year and manage their budgets."
The chamber also asked government to increase P.E.I.'s basic personal tax exemption, which remains the lowest in Canada at around $8,000.
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With files from Laura Chapin