Affordability should be focus as minimum wage rises: Chamber

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This article was published 06/05/2022 (1400 days ago), so information in it may no longer be current.

Manitoba is set to have the lowest minimum wage in the country as other provinces move to raise theirs by this fall, but the Brandon Chamber of Commerce says the focus should be on affordability for that wage.

Currently, Manitoba has the second-lowest minimum wage at $11.95 an hour, but Saskatchewan announced it is raising its own from $11.81 to $13 an hour in October. By October 2024, that province will increase the wage to $15 an hour.

Ontario and New Brunswick are also raising their minimum wages. Ontario already raised its wage by $1 to $15 an hour this year and will hike it up another 50 cents by October. New Brunswick currently has a $12.75 minimum wage rate and is raising it by $1 in October.

The Manitoba Progressive Conservatives have said it is tying its minimum wage increase to the previous year’s rate of inflation. Under that calculation, the wage will rise 40 cents an hour to $12.35 in October. There are no planned increases until October 2023.

Businesses in Brandon are not against a minimum wage increase, said Brandon Chamber of Commerce president Barry Cooper. They had been asking for a consistent increase to minimum wage for years because it would give them cost certainty to plan around.

There are already several variables businesses must plan around, like bulk price increases, supply-chain issues, hiring and paying staff, taxes and inflation.

The pandemic has presented a multitude of problems caused by shutdowns and restrictions imposed on many businesses, which has already eaten away at many profit margins.

“Many businesses have absorbed the costs of these things and not raised their prices, but we are at a point where we cannot keep doing that and we have to raise them to keep up with costs,” he said. “A rise to minimum wage is going to be a flow-through of those costs.”

With that in mind, Cooper said he doesn’t know many people who are getting paid minimum wage. Speaking anecdotally, he said many businesses in Brandon pay above that already, so he is curious about how big of an impact raising the provincial minimum wage would have on employment and affordability.

The real factor is what people can afford to buy with that wage from province to province. The focus, Cooper said, should be on how much of the money people can keep to be a real deciding factor on affordability. This will also help protect businesses from having to continually increase prices and risk becoming less competitive.

Businesses help address income shortfall through how they price goods, he said.

They generally have a higher provincial and federal tax exemption and a lower threshold for when they charge taxes on goods and services, so they can pass savings on to consumers to be more competitive.

“People in lower incomes are actually taking home more money before the minimum wage changed, so there are probably other ways we can help that wouldn’t result in cost flow-through to the consumer,” he said. “Consumers are getting beat up, too, with inflation and supply-chain issues. We have to figure out a way to be competitive on pricing and yet, help to support the folks that need it most. There’s a win in there for both of us.”

For Brandon businesses, Cooper said they have an advantage on affordability and convenience. While it is the second-largest city in Manitoba, it is relatively compact, with most people being able to drive from one end to the other in about 15 minutes. It’s also built on a grid, making travel and transport of goods efficient.

The Sun contacted Westman Parkland Network, which works with vulnerable people, for comment. Board member Kim Longstreet stated in an email it will be releasing a statement later this month on the effects of minimum wage and underfunding of their sector.

Calls to Brandon University’s economics department for comment were not returned by press time.

» kmckinley@brandonsun.com, with files from the Winnipeg Free Press

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