CRFA: Min. wage hike to hurt more than help

March 5, 2009, EDMONTON – Alberta’s foodservice industry is disappointed by the March 4 announcement that the province will impose a 5 per cent wage increase on small businesses during an economic downturn, and with less than a month for employers to adjust.

The April 1 minimum wage hike will not only increase the entry-level wage, it will ratchet up all wages within a small business. At the same time, restaurants in the province are seeing flat or declining sales due to the slowing economy.

“Imposing a sudden minimum wage increase on thousands of small businesses in Alberta when sales are declining will hurt the very people it is intended to help,” says Canadian Restaurant and Foodservices Association vice president Mark von Schellwitz.

“Restaurant owners will be forced to cut hours to control their costs and employees will end up earning less. This is especially true for the roughly one-third of our employees who earn far more in gratuity income than wage income. For them, losing hours will translate not only into a loss of wage income, but more significantly into a loss of tipped income.”

Given the current state of the economy, CRFA and dozens of Alberta companies representing thousands of small businesses in the province wrote to the premier asking for a minimum wage freeze in 2009 or, failing that, for gratuity and training wage differentials, which have been introduced in other provinces.

Two weeks ago the British Columbia government noted in the Throne Speech: “Now is not the time to impose hundreds of millions in new costs on small businesses through an increased minimum wage that will mean more job losses, will depress job creation and will hurt those it purports to help.”

“The British Columbia government gets it, but obviously the Alberta government doesn’t,” von Schellwitz says.