N.B.’s Minimum Wage Increases Could Lead To Price Hikes: Retail Council
MONCTON–With inflation on the rise, minimum wage increases are necessary.
That’s according to the Retail Council of Canada. But the organization’s Atlantic director, Jim Cormier, says that with significant increases, there are cost pressures for retailers.
“On one hand, it’s understandable. Inflation has been a big issue,” he says. “Combine that with the fact that, over the last number of years, many provinces in the country have been racing toward the fifteen-dollar mark. Therefore, New Brunswick’s minimum wage fell behind,” he says.
Cormier points out that New Brunswick’s minimum wage was the lowest in the country, so the retail council understands that it must go up. However, he says people need to understand “that whenever there is a significant increase, which is what we’re going to be seeing in New Brunswick, there are cost pressures that happen throughout a retailer’s payroll system.”
He says small, independent retailers may only have a few employees. When there’s a big increase over the next few years, that has to be absorbed somewhere–and it often leads to price increases for customers.
“For the larger retailers, they have salary scale and, therefore, there’s a percentage increases between the minimum wage worker up to the next level, and the next level, and the next one after that. So it creates a cascading effect throughout the system where if you raise [minimum wage] by $2 at the low end, that $2 increase pretty well happens all the way through the system,” Cormier says.
“Obviously, bigger retailers have the means but yet they also have a lot more costs that are going to happen because of this. So there is an impact all the way through and, ultimately, the customer ends up paying more because they have to pass these costs on.”
He adds knowing in advance about the increase is always a positive.
Minimum wages in New Brunswick went up on April 1st to $12.75 per hour, an increase of a dollar with another one-dollar increase is planned for October of this year.
Tara Clow is the news director with 91.9 The Bend in Moncton, a Huddle content partner.