Nfld. & Labrador

Is a $15 minimum wage bad for business in N.L.? Depends who you ask

A mandatory review of the province's minimum wage legislation is ramping up debate about how much low-income earners should make.

Commerce organizations and labour groups are clashing ahead of wage legislation review

Newfoundland and Labrador has the second-lowest minimum wage in Canada at $11.40, and that's up for review this spring. (Shane Gibson/CBC)

It's debate as old and widespread as the legal concept of a minimum wage itself: does hiking an employee's mandatory baseline pay hurt more than it helps?

Labour and business groups entered the fray this week ahead of a minimum wage review, with one side arguing a steep rise will take a bite out of small businesses and the other suggesting more money in the pockets of workers will lead to a healthier economy overall.

A lobbying coalition consisting of 20 chambers of commerce, business groups and boards of trade across the province sent out a news release Tuesday urging the province not to raise the minimum wage too much, too fast. 

The N.L. Federation of Labour lept to respond in a release of its own, calling the business argument for a conservative approach short-sighted and embarrassing.

Under provincial legislation, the minimum wage must be reviewed every two years. The most recent change came into effect on Apr.1, 2018, meaning the next review has to happen before Apr. 1, 2020.

Bad for business?

Rhonda Tulk-Lane, the acting CEO of the St. John's Board of Trade, pointed out that in 2018 government and stakeholders agreed to link the minimum wage increase with inflation — and thinks legislators should stay the course by once again tying the baseline wage to the federal consumer price index. 

Raising it to $15 — a benchmark figure for advocates nation-wide — would, she says, be bad for business. 

Alyse Stuart, of $15 and Fairness Newfoundland and Labrador, said Snowmageddon highlighted the need for a higher minimum wage in the province. (Bruce Tilley/CBC)

"If a small business in Springdale with 15 employees today were to implement the $15 minimum wage, they would have to absorb $100,000 somehow," Tulk-Lane said.

The $3.60 jump could result in an increase in goods and service costs going up, hours being cut and, in some situations, jobs being lost, according to commerce groups.

Or boon for local economy?

It's an argument that isn't winning over the local arm of $15 and Fairness, an advocacy group that pushes for wage increases across the country.

Tulk-Lane's calculus, chair Alyse Stuart said, doesn't take into account the increased spending power of workers benefiting from an extra few thousand dollars a year.

"In jurisdictions across the country where the minimum wage has been increased, we've seen positive effects on the local economy as more folks are able to contribute to their local economy," she said.

Right now, Newfoundland and Labrador has the second-lowest minimum wage in Canada, with employers shelling out $11.40 an hour. 

Tulk-Lane is asking the government to look at other jurisdictions to see what works there and try to implement its own solutions. 

"Change the mindset to a 'both and' and stop this 'either or' — business or labour, employer or employee," she said.

"We can figure this out but in the meantime let's keep it tied to inflationary measures while we find the right way to solve this problem."

Stuart, too, thinks the debate needn't pit employers against workers, arguing that business owners who support a $15 minimum wage do exist across the province.

The St. John's Board of Trade would like to see minimum wage go up to keep up with inflation. (CBC)

She also doesn't believe now is the time for sitting back and waiting. 

Out of the more than 200,000 people working in Newfoundland and Labrador, 70,000 of them make less than the wage she's pushing for.

"We really need to invest in this province and to do what you have to lift people out of poverty," she said.

Read more from CBC Newfoundland and Labrador

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