From the editor: September 2015
The Minimum Wage Debate
Small businesses, and that would include about 90 per cent of our readership, are particularly hard hit by increases to the mandated minimum wage.
Greenhouse operators and garden centre owners are price takers, not price setters. The margins are slim at the best of times, and there is only so much economizing that managers can do.
As the Ontario Federation of Agriculture noted in its 2013 report to the province’s Minimum Wage Advisory Panel: “From the perspective of the agriculture sector, an increase to the minimum wage is an increase in the cost of production for which there is no mechanism to recoup that cost from the marketplace.”
If the goal of the provinces in raising minimum wages is to help the working poor, there are much better tools at their disposal, such as improvements to basic personal income tax exemptions or improved retraining programs. Instead, these governments are forcing small business to carry out social policy with no compensation to assist firms now facing higher wage costs.
Here we have the politicians patting themselves on the back for efforts they feel will assist workers. The reality, of course, is that they’re having small business owners ante up the funds, with no offers of provincial assistance to lessen the budgeting pain.
The previously noted 2013 OFA report observed that “when we have dramatic increases to the minimum wage, jobs and job security are threatened, benefiting no one. The OFA strongly recommends that consideration of alternative approaches to impacting the standard of living for low-income workers must be a primary consideration in any review of minimum wage rates.”
The problem is particularly daunting in Alberta, where the new government has pledged to increase the minimum wage to $15 by 2018. It’s currently $10.20, though rising to $11.20 next month. When fully phased in by 2018, the province’s minimum wage will be pretty close to a 50 per cent hike within only a few years.
The Canadian Federation of Independent Business has launched an online petition to assess the views of small businesses on the Alberta hike.
It’s doubtful there are any economic sectors on the planet that could reasonably accommodate such an increase.
Members of the Greenhouse Marketing Forum, a vibrant online group of growers, suppliers and industry specialists that’s based in Alberta, were weighing in on the topic in mid-summer. As one grower noted, “as of right now we pay all we can afford out in wages.”
The irony is that most growers themselves are not making big money on an hourly rate basis. Divide the long hours into the revenue left over after operating expenses and it’s not a high paying career for many operators. But it’s a labour of love for many, a lifestyle in which families can work together, and the nominal returns are tolerable.
Politicians must indeed address the problems of the working poor, but not at someone else’s expense. It’s a challenge that should be borne by society in general through provincial funding/programming initiatives.