Why Both Employers And Employees Want To See Nova Scotia’s Minimum Wage Go Higher
HALIFAX — On Tuesday, the Government of Nova Scotia said it will raise the minimum wage by 40 cents an hour. As of April 1, minimum wage workers in the province will earn $12.95 an hour.
The province made the change after it was recommended by The Nova Scotia Minimum Wage Review Committee, an arms-length body representing both employer and employee interests.
The committee recommended the 40-cent increase based on a formula that’s been in place since 2018.
But it also made another recommendation.
In its report to the province, the committee asked the government to take another look at that formula and reconsider how minimum wage adjustments are calculated in the province.
Because according to members of the committee, Nova Scotia’s minimum wage isn’t rising fast enough.
Current formula not cutting it
Wes Surret is the general manager at the Pictou Lodge Beachfront Resort and an employer representative on the committee that made the recommendation. He spoke to Huddle as an individual and not on behalf of the committee.
Surret said the committee asked the province to take another look at its minimum wage formula because there’s a “common desire” to make Nova Scotia’s minimum wage more competitive.
Surrett says he’d like to see Nova Scotia’s minimum wage become the highest in the Maritimes, “or possibly even in Canada,” both to better attract and retain workers, as well as provide a boost to minimum wage earners.
“And I’m not sure the current formula is going to get the minimum wage at a high enough level quick enough that it’s going to be acceptable,” he says.
Danny Cavanagh sits on the Minimum Wage Review Committee alongside Surrett. He spoke to Huddle in his role as the president of the Nova Scotia Federation of Labour and not on behalf of the committee.
He believes minimum wage in the province should be much higher, and that the recently announced increase “is not close to enough.”
“This province is not doing that great when it comes to poverty and one of the obstacles to get over that, one of the roadblocks is minimum wage, ” Cavanagh says.
While he too likes the idea of a higher minimum wage in Nova Scotia, Surrett says it’s vital any increases happen in an orderly and predictable way.
No more sudden shocks, please
Last year, before the Covid-19 pandemic hit, the provincial government surprised many by bumping the province’s minimum wage up by $1 an hour — far higher than the committee recommended.
“All Nova Scotians should benefit from our province’s economic growth and steadily improving business environment,” Premier Stephen McNeil said in a news release at the time. “We are committed to moving forward in a balanced way by making changes that benefit both workers and businesses.”
Surrett says that increase came as a huge shock to the business community.
Most businesses budget far in advance (right now his hotel is setting rates for the 2023 season) and sudden changes in minimum wage can throw a major wrench into their budgets.
“It’s really hard for businesses to try to adapt to that, especially ones that have a large portion of their employees that are near that minimum wage level,” Surrett says. “The concern from employers is that they need to be able to forecast out those increases.”
But just because businesses don’t like the sudden shocks, it doesn’t mean they’re against minimum wage increases.
Surrett acknowledged most large corporations fight hard to keep the minimum wage low but said many independent businesses like his won’t object to a rising minimum wage, as long as they have ample notice.
“I think most employers would agree that as long as it’s predictable you’re able to absorb those costs into your operations. I don’t think anybody’s going to fight a minimum wage of $15, or whatever it may be. It just needs to be predictable so businesses can plan around it,” he said.
Do minimum wage bumps really hurt businesses?
Cavanagh argues Nova Scotia’s minimum wage should be much higher than it is already is and that bigger increases don’t really hurt businesses.
He points to American states like California and New York, as well as Alberta, where minimum wage recently shot up to $15 an hour.
“It didn’t have that kind of detrimental effect on businesses out there and it hasn’t had that detrimental an effect on businesses out west in Alberta,” he argues.
Even here in Nova Scotia, he says, the $1-an-hour minimum wage wasn’t forcing businesses to shut down.
“In fact, it helps improve the economy because people are spending. When there’s more money in the economy, people spend more,” he says.
Surrett, on the other hand, argues big minimum wage increases do hurt the businesses and the economy, especially during a pandemic.
“I think there’s a lot of businesses that are shocked that it’s actually going up to $12.95 right now. That increase is even saying, ‘what the hell.’ I mean, we’re at a pandemic stage, the cost of living has not increased this year, so why are you putting a minimum wage increase on me right now?” he says.
So many businesses have already shut down because of the pandemic, he says, and any increase in the minimum wage this year risks closing even more.
Will the calculation change?
Although the provincial government accepted the committee’s recommendation to raise the minimum wage to $12.95, it’s unclear how seriously the government is taking the recommendation to reexamine its formula.
In a statement announcing April’s minimum wage increase, government spokesperson Shannon Kerr said the recommendation “will be considered in the coming weeks.”