(Apr. 14/16) On April 15, labour unions are calling for a $15 minimum wage in Canada. At first glance, the idea sounds great, but when you take a closer look, it could hurt the very people it’s intended to help.
Proponents of a $15 minimum wage say it should be a “living wage.” In fact, minimum wage is meant to be a starting wage. It allows business owners to create entry-level jobs that lead to higher wages. It allows them to create summer jobs for teenagers to earn some spending money and gain job experience.
These entry-level opportunities will be much harder to come by if the starting wage goes up too high, too fast.
To be clear, Restaurants Canada is not opposed to minimum wage increases. Wages need to keep up with the cost of living. We are concerned, though, about the unintended consequences of increasing the minimum wage too quickly.
When minimum wage goes up, it pushes other wages and payroll taxes up too. In the labour-intensive restaurant industry, the impact can’t be overstated: on average, more than 34 cents of every dollar in sales goes directly to employees’ wages and benefits.
The restaurant and foodservice industry is unlike any other. We bring investment, innovation and tourism to every community across the country. We create a gathering place where people meet to celebrate many of life’s big moments – anniversaries, birthdays, weddings, and more. We employ more than 1.2 million people, and we are the No. 1 source of first-time jobs.
We share the goal of improving opportunities for every Canadian. After all, thousands of new employees come through our doors every year. They progress from a starting wage to higher wages, and gain skills and experience that will benefit them along any career path.
Our message on minimum wage is simple. Here’s our ask to provincial governments:
- Announce minimum wage increases annually, based on the current economic climate, and give business owners enough time to adjust to higher costs.
- Introduce or maintain a youth wage, to encourage small businesses to hire employees under the age of 19.
- Introduce or maintain a wage for liquor servers, recognizing that servers in licensed restaurants and bars earn well above minimum wage when you factor in their tips. This allows restaurateurs to pay more to staff who don’t earn tips.
The conversation around minimum wage doesn’t lead to a one-size-fits-all solution. Let’s allow employers to continue creating entry-level jobs with a starting wage that works.