One of the NDP’s platforms from the recent provincial election is coming to fruition this fall, with a June 29 official announcement that the minimum wage in Alberta will move up $1 an hour by Oct. 1, 2015.
In a matter of months, minimum wage earners will be earning $11.20/hour ($10.70/hour for liquor servers); this is the first step towards Premier Rachel Notley’s plan to achieve a minimum wage of $15/hour by 2018.
The Eagle fielded requests on local social media platforms, seeking to connect with both Cochrane business owners, as well as low-wage earners. The response was tremendous and opinions varied across the spectrum.
From the business community, the perspective seemed to be dependent on the business model at hand. Businesses with a higher profit margin and more traffic may be more optimistic than those with tighter profit margins or those operating on a shoestring budget.
“Minimum wage going from $10.20 to $11.20 isn’t terrifying, but we have to find the money for the increase somewhere,” explained Bonnie Bend, owner of local new and gently used children, maternity and women’s clothing shop, Great Things in Store.
“Wages are by far our biggest expense and that translates into far more than a 10 per cent increase when we factor in payroll taxes and Worker’s Compensation.”
Bend, who started her business 11 years ago as a single parent on maternity leave, currently employees a staff of eight — six of whom are students. In order to absorb costs with the coming incremental increases, she is concerned that the increase in minimum wage will hurt the more vulnerable wage earners out there as businesses are forced to ‘tighten their belts’ and scale back on job availability.
“There are three options: sell more, cut expenses or take home less pay ourselves…I think the biggest misconception out there is that small business owners are raking in the cash and can afford to pay almost 50 per cent more in wages.”
Pat Parker is the owner of local catering company, Pats Palate Pleasers, and also has a food service business at the Spray Lake Sawmills Family Sports Centre.
“I’m a firm believer that you get what you pay for. I don’t believe in paying minimum wage and it should go up,” said the 12-year-long local business owner.
“If you offer your employees a little bit more, it’s incentive,” she said, adding that there are ways to absorb costs when your business model has a healthy profit margin.
Wayne Newey is a Bragg Creek resident and the owner of Wholesale Warehouse – who closed his Cochrane location last week, with plans to reopen in Calgary in a larger retail space.
With two thriving locations in Airdrie and Golden, B.C., Newey made the decision to close his Cochrane locale once the change in government occurred and the minimum wage announcement was made.
“I thought, I’m not going to wait – why not be proactive and look at streamlining my business,” he said, adding that his staff will be going down from 18 to 11 with his change in business model.
“I think it will result in a loss of jobs because not a lot of businesses can do what I can do (with my structure) and they will have to absorb more of the costs…how much less can a small business owner make and still put a smile on their face?”
Newey said there is too much economic uncertainty and it’s likely to be tough times ahead for small business owners across the province.
Minimum wage earners appear to be enthusiastic about the coming increase.
“I’m exceptionally pleased about the announcement,” said Catherine Anderson, manager of Cochrane Puff N Stuff, who currently earns slightly above minimum wage.
“It’s unrealistic to expect people to live on such low wages — especially young people,” she said, adding that she believes the increase will give youth the incentive to work harder.
This is a sentiment that Cochranite Nick Heazell agrees with, as a spouse of a low wage earner in the local retail sector.
“I can understand business owners being concerned with sudden hikes, although I have less sympathy knowing that most never gave incremental steps to their employees when times were good, so I have little sympathy for them now that they are being forced into action.”
Heazell added that the assumption that most minimum wage earners are usually youth is often incorrect — particularly when accounting for the number of educated women who choose retail and food service shift work to accommodate their partner’s schedules in order to not have to fork out costly child care costs.
According to Notley, the premise behind the increase is to bring Alberta (with one of the highest costs of living) up to par with minimum wages of other provinces across Canada.
A report released by the Canadian Federation of Independent Businesses revealed that only four per cent of business owners said the increase in minimum wage would help with attraction or retention of staff.
The report went on to say that 48 per cent of business owners said they would have to increase prices; 43 per cent would have to increase wages throughout their businesses; 33 per cent would put future hiring plans on hold; 30 per cent would scale back on employee perks; 29 per cent would cut back on their number of employees; and 25 per cent would reduce hours for current employees.
With Alberta’s current minimum wage being $10,20/hr, those working 40-hour work weeks net around $717 bi-weekly. Once the new $11.20 wage kicks in, that after-tax income will increase to about $773 every second week. Ontario, which has had a minimum wage of $11.25 for some time now, provides workers a net bi-weekly income of $759 after taxes; $14 less than those soon to be making $11.20/hr in Alberta.
Those with questions about the minimum wage are encouraged to contact the Employment Standards Contact Centre toll free at 1-877-427-3731 or to visit work.alberta.ca/minimumwage.
