Business lobbies against wage hike
Two-tier pay could also be NDP target
Premier Rachel Notley said Thursday her government remains committed to hiking the minimum wage to $15 an hour and signalled she favours abolishing Alberta’s two-tier-minimum wage, despite concerns from business groups.
Notley campaigned on a promise to raise the minimum wage, but her party’s platform is silent on the issue of the two-tier minimum wage, which allows employers to pay liquor servers $1 less than the hourly minimum because it is assumed they receive tips.
“The fact of the matter is that right now, liquor servers in Alberta have the lowest minimum wage of anybody in Canada. They earn only $9.25 an hour,” Notley told the CBC.
She pointed to a 2010 allparty committee report in which Progressive Conservative, Wildrose and Liberal MLAs unanimously rejected industry calls for a two-tier minimum wage. The Tories implemented one anyway.
“There’s no question the continuation of… that muchlower wage will be something we’re also looking at.”
Labour Minister Lori Sigurdson has committed to phasing in the $15 minimum wage, starting Oct. 1. New Democrats will announce by July 1 how much that initial increase will be to give businesses time to prepare. The size and rollout of the increase — and the future of the two-tier wage — are the main subject of talks Thursday and Friday with business.
Eighteen advocates for small business and restaurant owners were invited to the consultation Thursday. Some were “surprised” by talk of rescinding the twotier wage system. All urged Sigurdson to slow down the pace of the minimum wage hikes.
Ken Kolby, president of the Alberta Chambers of Commerce, urged the government to consider the negative impact on young workers and on not-for-profit daycare operators and long-term care facilities, which rely heavily on low-wage labour.
An accountant, Kolby calculated that under the NDP plan, a single parent with one child would see gross earnings increase to $30,000 from $20,400 — but would pocket just $6,900 of the additional money. The remaining $2,700 goes to the federal government, because the parent no longer qualifies for the Child Tax Credit, the GST credit or the Federal Income Tax Benefit.
A more modest increase in the minimum wage combined with an increase in the province’s Family Employment Tax Benefit would leave more money in the parent’s pocket, Kolby said.
Richard Truscott of the Canadian Federation of Independent Business said Albertans should ask whom the wage hike really helps. Citing a Fraser Institute analysis of Statistics Canada data, Truscott said 1.5 per cent of those earning minimum wage are single parents with children, and fewer than 10 per cent are the head of a household.
“Governments are the biggest net beneficiaries of an increase in minimum wage because income and payroll taxes are based on wages,” he said. “When the floor on wages goes up, so does the government’s take. It’s a bit of a moral dilemma for them.”
Mark von Schellwitz of Restaurants Canada said the Notley government is politicizing minimum wage by untethering it from the neutral, objective Consumer Price Index and Average Weekly Earnings index, which keeps minimum wage hikes in line with economic growth.
His members worry Albertans “don’t understand how razor thin their margins are — 35 per cent of every dollar goes to labour costs.”
“The average restaurant of 25 employees … would be forced to cut three jobs,” he said. “How is adding people to the unemployment rolls helping anyone?”