$15 minimum wage doable in Nova Scotia as long as we take it slow, says businessman
Bill Black says $15 minimum wage would help rural businesses keep workers
A Nova Scotia businessman says a $15 minimum wage in the province is achievable, but only if the province moves toward it slowly.
The government announced on Wednesday that Nova Scotians will be making 15 cents more an hour starting this spring, bringing the minimum wage up to $11 per hour for experienced employees and $10.50 per hour for those with less than three months' experience.
The change means the province will no longer have the lowest minimum wage in the country. Still, Bill Black, a corporate director based in Halifax and the former CEO of Maritime Life, calls an $11 hourly wage "woefully inadequate."
"It's very revealing that in Australia, which has a resource-based economy like we do and a lower unemployment rate than we do — their minimum wage I think is somewhere north of $17.50 an hour, and they did that because they got there very slowly," he told the CBC's Information Morning.
Despite the pushback from many employers, Ontario raised its minimum wage from $11.60 an hour to $14 on Jan. 1, and will raise it again to $15 an hour at the beginning of 2019. Alberta says it will raise its minimum wage to $15 an hour in October.
In Ontario, efforts to offset the minimum wage hike have landed some businesses in hot water. Tim Hortons took a lot of heat after it was revealed that some franchisees cut employee benefits, paid breaks or tipping in response to the wage increase.
Jim Cormier, director of the Atlantic office of the Retail Council of Canada, said the businesses he represents aren't against increases to the minimum wage. But he says there is a correct way to do it — such as Nova Scotia's approach, which is to increase wages by the amount the previous year's consumer price index changed.
"That provides predictability. It avoids political decisions, which you see in some provinces before they're about to go to the polls, maybe, where they jack the minimum wage," said Cormier.
"So it makes it a lot easier for retailers — and I'm speaking specifically about my members — that they can plan for it and there's no shenanigans involved."
How to achieve $15 per hour
In order for Nova Scotia businesses to pay a $15 minimum wage, Black has a few caveats.
He said to relieve the strain on employers, the change must take place "much more slowly" than it did in both Alberta and Ontario. He suggests a gradual rise over three or four years.
Black also said tips and benefits should be taken into account in assessing the $15 wage.
To make it work, businesses must increase their productivity by either investing in machines or training for employees, and government should help businesses achieve this, he said.
Cormier said even taking into account the above caveats, a $15 minimum wage would mean too much unpredictability for the businesses he represents and it goes against the consumer price index that Nova Scotia currently uses to reliably increase minimum wage.
"You end up having to hope that you are extremely profitable and that you are able to absorb it or you end up having to cut somewhere else," he said.
An extra dime for coffee?
Black said the increase he's suggesting would mean, using Tim Hortons as an example, about a five per cent per year increase in wages. He said that translates to between one and two per cent per year in total cost for the company. Black said Tim Hortons should be able to recoup that by raising prices.
"If you and I end up paying an extra dime for a cup of coffee four years from now so people working there can make $15 per hour, well, I think that should be fine."
Cormier said raising the price of coffee by 10 cents in a small coffee shop isn't going to solve the problem, as small shops don't come close to selling the volume that Tim Hortons does.
Keeping rural workers
Black said the biggest challenge for many manufacturing companies, especially outside of Halifax, is finding enough workers.
"I'm not surprised by that because who's going to hang around in a small town to make $11 an hour — which means you live in your parents' basement," he said. "And if we can help the businesses get to a point where they can afford at least $15 an hour for everybody, then maybe they have a better chance of keeping workers."
Riverside Lobster International in the Meteghan is one rural Nova Scotia company having trouble recruiting and keeping workers.
The company uses buses to bring workers in from Digby and Yarmouth. Workers are paid about $13 per hour and enrolled in a defined contribution pension plan and get health benefits.
"They're doing all that and yet we're spending, whatever it is, $17 million per year supporting a ferry to create jobs for people that could easily have them in Meteghan," said Black. "It is beyond ridiculous that they're doing that."
With files from Information Morning