Another minimum wage hike hinders job growth in Nova Scotia
FOR IMMEDIATE RELEASE
May 10, 2011
HALIFAX – The Nova Scotia government’s decision to raise the minimum wage to $10/hour in October – an increase significantly higher than other economic indicators – will once again hit small businesses across the province.
“Restaurant operators are already struggling to deal with Nova Scotia’s slow economic recovery, HST and fee increases, and escalating food, energy and beverage alcohol costs,” says Luc Erjavec, Atlantic Canada Vice President for the Canadian Restaurant and Foodservices Association (CRFA). “In the past three years, minimum wage increases have cost the province’s restaurant industry – which is already operating on a thin profit margin of 5.3% – an additional $50 million. Rising labour costs are a key reason the industry has shed almost 2,000 jobs since 2007.”
“Restaurants provide more first-time jobs than any other industry in Canada, and are a stepping stone to the broader labour force including thousands of opportunities within foodservice in Nova Scotia,” says Erjavec. “This initiative is counterproductive at a time when we are struggling to preserve our jobs and communities. There are better ways to protect small businesses and the jobs they provide, while reducing poverty.”
To help restaurants create more job opportunities across the province, CRFA made these recommendations to government:
- Raise the basic personal tax exemption to a level more consistent with other Canadian provinces, putting more money in the pockets of lower-income workers.
- Slow the scheduled increases in minimum wage to match the marketplace. Employers should not be forced to bear a 23.5% increase in minimum wage when the Consumer Price Index (CPI) has only increased by 4.2%, since 2008.
- Introduce a tip differential to recognize the significant extra income earned by liquor servers. This differential would freeze servers’ wage rates during the next general minimum wage increase; wages would not be rolled back. (Such differentials exist in B.C., Ontario and Quebec.)
About 75% of minimum-wage earners in the restaurant industry are young people under the age of 25, and well over two-thirds work part-time. In most cases, these individuals live at home, are students or are secondary-income earners.
CRFA is one of Canada’s largest business associations, with more than 30,000 members representing restaurants, bars, caterers, institutions and other foodservice providers. According to a recent Ipsos poll, 22% of Canadians were first employed by the restaurant industry, making it the number one source of first jobs.
- 30 -