Halifax Chamber CEO Says Businesses Can’t Afford $15 Minimum Wage
HALIFAX – The president and CEO of The Halifax Chamber of Commerce says now is not a good time to start raising the minimum wage, given the challenges being faced by small businesses during Covid-19.
“We’re in a unique year,” said Patrick Sullivan. “So, my overall answer would be, this particular year I don’t think small businesses, in particular, are in great shape to have any increase at all.”
“The reality is: wages come from somewhere. So, a $15 minimum wage…will ultimately mean consumers would be paying for that. So long as consumers accept that, then a $15 minimum wage is a reasonable minimum wage, at some point in the future.”
Sullivan was responding to the recent report published by the Canadian Centre for Policy Alternatives, which claims a living wage in Halifax is now $21.80 per hour. In Saint John, the living wage is $19.55. The report called on more businesses to start paying employees a living wage and called on governments to increase the minimum wage to $15 an hour over the next two years.
The Chamber president agrees that wages should be higher in certain sectors, but warns that most businesses can’t handle a sudden spike in minimum wage.
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“In general, the members of the Halifax Chamber of Commerce would be in agreement that wages need to go up and we could see getting to $15 an hour over time,” said Sullivan. The worry we’ve always had is a sudden increase in the minimum wage.”
“When people call for a $15 minimum wage immediately, that’s a concern, because businesses are not typically set up to change immediately.”
David Duplisea, CEO of the Saint John Region Chamber of Commerce, agrees with Sullivan, saying a lot of small businesses operate on thin profit margins and can’t afford a huge minimum wage hike.
“It would cause severe challenges for small businesses to raise that to $15 within two years and you would see unintended consequences,” said Duplisea in an interview with Huddle earlier this month.
A spokesperson for the Nova Scotia Government said, under current regulations, the minimum wage will go up by at least $0.30 an hour in 2021. On April first of this year, the wage went up by a full dollar to $12.55.
“The Minimum Wage Review Committee – which is comprised of two employer and two employee representatives – conducts an annual review of the minimum wage and presents a report with recommendations to the Minister,” wrote the spokesperson in an email. “The Committee’s review is based on economic data and inflation rates. The Regulations currently provide that the minimum wage is to increase by $0.30 plus inflation on April 1, 2021.”
Sullivan points out that restaurants have been hit particularly hard by Covid-19 in 2020, and a minimum wage jump in the near future would be costly for them.
“When I’ve spoken to restaurants in particular, who often don’t pay the highest salaries- because there is an element of tipping- they say, at this point, there can’t be an increase,” he said.
“They simply can’t handle it. There will be hundreds of restaurants going out of business this year in Nova Scotia. So, it’s not a great time to talk about increases of any kind in Nova Scotia.”
Sullivan believes the provincial government can do more to help people earn more money. He notes that Nova Scotia has a high income-tax rate and a 15 percent HST. According to the Fraser Institute, Nova Scotia’s 21 percent “top marginal income tax rate” is the highest in the country. Sullivan argues, if taxes were lower, people can take home more money.
“I would agree that employers have a responsibility…to pay our employees an appropriate amount,” said Sullivan. “But I also think government has a responsibility to police their spending appropriately so taxes can be lower for all residents and for all income earners, so people have more money to take home.”