Locals weigh impact of minimum wage hike

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This article was published 03/10/2023 (1077 days ago), so information in it may no longer be current.

The recent increase in Manitoba’s minimum wage to $15.30 per hour has potential benefits and challenges to low-income earners, small businesses and their patrons, according to experts.

The increase, which came into effect on Sunday, makes Manitoba’s minimum wage the third highest among Canadian provinces, trailing only behind British Columbia and Ontario. But what are the potential benefits and challenges?

“For people like me who rely on minimum wage jobs, every dollar counts. This increase will help me cover my basic expenses a bit better,” ACC student and part-time worker Jane Aro told the Sun. “Though the amount is small, but it is a relief, which is better than nothing.”

Some Brandon residents that shared their views on the development with the Sun via Facebook.

“I don’t believe that the increase is going to make it any easier at the end of the month to keep bills paid for every person’s needs,” one resident, Doreen Vanhove, told the Sun. “But I do believe it will kill a lot more businesses having to pay it out in wages, or they cut full-time workers to part-time, which hurts everyone all over again. It’s really not helping the problem.”

Another resident, Amber Hagans, echoed the sentiment that small businesses would be significantly impacted.

“It’s going to have a huge impact on small business,” she noted. “Hopefully, people see that and now more than ever make the choice to shop local over Amazon and others.”

Komfort Kitchen owner Derek Woychyshyn explained that while it is good for people to take more money home, it is equally important for the government to address the rising cost of living in the province.

“I agree that people should be taking home more money to afford to live because of the inflation. But as a business owner, I can’t absorb all those costs. So, then my prices at the table must go up because they must reflect that,” he told the Sun. “The minimum wage going up isn’t just a minimum wage going up. It affects every aspect of the business, and for me to stay in business, I need to make more to cover all those.”

Woychyshyn highlighted the challenge of experienced workers being closer to minimum wage due to the increase. He suggested that those who have worked hard and earned more than minimum wage should also see increases to maintain the wage hierarchy.

“I think big box stores, big companies are making bank on hard-working people, and we’re struggling to cope with inflation, and we have to make cutbacks in our lives because of inflation,” he added. “We must make cutbacks in our lives because of inflation and dollars left over after everything is less than it was five years ago or three years ago.”

The Manitoba Hotel Association acknowledged that while economic recovery has been strong in the sector, the two years of minimal revenue during the pandemic presented significant challenges, adding that minimum wage increases and rising food prices were impacting businesses in the industry.

“Our members are flexible and adaptable to ever-changing business conditions, having just gone through a global pandemic that was extremely challenging. They will continue to adjust their operations,” the association’s president, Michael Juce, told the Sun. “Labour and food are some of the largest inputs for our industry. Everyone knows that food prices have continued to escalate, and minimum wage has now increased almost 30 per cent in two years. Like any business with rising inputs, some may look to and be able to charge more for their products, but that isn’t the case for everyone and everything.”

Juce also emphasized the importance of a strong workforce in the hospitality sector, mentioning that wages are part of the equation, but other benefits and incentives are equally vital.

He highlighted the effectiveness of the Small Business Minimum Wage Adjustment Program, which was in effect earlier this year, and expressed the belief that similar initiatives would be beneficial.

“The positive impact of the increase in the Basic Personal Amount earlier this year, which prevented workers from paying income tax on the first $15,000 of income is immeasurable. It allows individuals to retain more of their earnings, making tax reductions a helpful measure,” Juce added.

Like others, Brandon Chamber of Commerce president Jaime Pugh acknowledged that increases in minimum wage were essential for competitiveness, but cautioned that several increases in one year placed stress on cash flow.

She highlighted the need for businesses to continually review pricing and expenses to adapt to these changes.

“Increases to minimum wage is important to stay competitive within Canada. However, several increases in one year cause businesses to either increase prices or reduce hours or number of employees working to help offset the increase to expenses,” Pugh told the Sun. “For those businesses that are already running very tight, this can cause a lot of stress to cash flow.”

Unfortunately, she added that this does not leave more money in the pockets of the employees if prices are increasing, or if their hours are cut.

“The other concern is that when minimum wage increases, it does not always stop there, as other wages are typically reviewed in all categories.”

Brandon poverty committee member Tyson Tame — who is also a city councillor — viewed the wage increase as a positive step in the right direction, particularly in an inflationary market. However, he recognized the balancing act between fair wages and increased consumer costs.

“I feel for both sides of the equation. In an environment where inflation is at its current rate, people need additional income to cover their essential expenses,” Tame told the Sun. “However, it’s also important to recognize that business owners may pass the increased costs on to consumers, creating a challenging cycle of rising prices.”

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