Local restaurateurs are upset about the push to increase minimum wage despite the downturn in the economy.
The NDP government revealed Thursday its plan to roll out a $15 per hour minimum wage by 2018.
The minimum wage will rise by $1 to $12.20 per hour and the liquor server differential will be eliminated on Oct. 1, 2016. Weekly and monthly minimum wages will rise to $486 and $2,316 respectively.
Minimum wage will rise a further $1.40 on Oct. 1, 2017, and again by $1.40 on Oct. 2018, to reach the targeted $15 per hour rate.
The rate will be phased in “responsibly” over the next two years, to give employers time to adjust and prepare their budgets, said Labour Minister Christina Gray.
The food and beverage industry has been one of the biggest opponents to the change.
Restaurant Canada launched a campaign earlier this month stating now was not the time for a dramatic 50 per cent increase to wages, given the province’s current economic climate.
Labour is the primary cost to restaurants and bars, with 34 cents of every dollar going to employee wages and benefits. Compounding factors, such as the rising cost of produce and meat, increased liquor taxes are making a bad situation worse.
“As an industry, we’re really getting buried right now,” said Jesse Kupina, co-owner of Central Social Hall in both Edmonton and St. Albert.
With 10 to 15 per cent margins, there’s no way a $15 minimum wage won’t have an impact on staffing levels, hours and other employees’ salaries, said Kupina. The increase will create a wage compression on skilled kitchen staff, who already make more than minimum wage and, in some industries, will drive prices up.
As a consumer, he’s scared to see what his morning coffee will cost him come 2018.
Randy Schmidt, owner of Blue Rare Steak and Bar in downtown St. Albert, said the decision to push forward shows the government’s complete lack of business sense, and agreed that an increase to minimum wage and the elimination of the liquor server differential will only result in a pay decrease for chefs.
“Clearly the government doesn’t run its own small business,” said Schmidt, who pointed out that servers will probably end up taking home less money and be taxed more because they will take home less tips.
Kupina said he isn’t against raising minimum wage, but feels that the province is moving too fast, with too little research.
“The first minimum wage increase has only been in effect for a year. There aren’t even any statistics to prove how it’s impacted or not impacted, and we’re already in the second phase and they’ve announced their two other phases,” said Kupina.
When asked by reporters if any analysis had been done on the economic impact of the wage increase, Gray said there wasn’t a clear answer, but that job losses were expected to be minimal.
St. Albert and District Chamber of Commerce CEO and president Lynda Moffatt was in a “state of disbelief” Thursday afternoon.
“It’s just too much too soon,” said Moffat.
With the introduction of a carbon tax and decreased spending due to tough economic times, businesses are talking about layoffs, closures and reductions in hours.
Minister Gray will be speaking on minimum wage at a Chamber luncheon on July 26 at the Apex Casino in St. Albert.