Minimum-wage hike, small-business pressure

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This article was published 30/09/2022 (1115 days ago), so information in it may no longer be current.

Some small-business owners are scrambling to plan payrolls with Manitoba’s minimum wage set to rise Saturday by $1.55 per hour.

The province will have a $13.50/hr minimum wage on Oct. 1, up from $11.95/hr. The government is planning to increase the employment baseline again to $14.15/hr in April, and around $15/hr by October 2023.

Just weeks before the announcement was made in August, labour groups and business owners were divided on what the new wage should be, with the business sector calling for $13 to $14 an hour and the Manitoba Federation of Labour calling for $16.15 as a necessary living wage.

At the time, the provincial government was criticized by the Federation of Labour and the NDP for stalling on deciding an amount.

At High Tea Bakery, in the Winnipeg neighbourhood of Deer Lodge, owner Belinda Bigold said she is feeling the effects of that stalling now.

Her concern is not the hike itself (she said raises for staff were already in the works) but more so the reactionary decision to give businesses just 30 days to plan for the jump, especially when the cost of many goods has doubled in the last year.

“Inflation is getting so ridiculous that, certainly, $15 an hour is where we need to get to, and I’m not upset about that being next year’s goal, but having a 30-day notice to increase everybody by $1.50 an hour when you have 20 to 30 employees, that adds up,” she said.

High Tea staff don’t make minimum wage (the lowest-wage employees make around $15 an hour, Bigold said), but she will now have to offer raises to many of her more experienced workers who would only be making slightly more than new employees if she kept everyone at base wage.

The change will cost her business around $40,000, Bigold said.

“Between COVID, and natural disasters, and everything else with all the losses, and now you add inflation, you add ingredients that have more than doubled in cost,” she said.

“And then you add another $40,000 that you’re just supposed to pull out of thin air for wages. That, for a small business, is a lot of money.”

There are around 20 staff at High Tea now, but hiring begins soon for the holiday season, and planning for higher wages for those seasonal employees is an additional stress.

“I’ve spent the last two years having anxiety attacks every Thursday night, knowing that at three o’clock on Friday, they’re going to announce something that reinvents my business, and I have to come up with a solution before Monday. It’s been a pretty hard two years to do that,” Bigold said.

“And now it feels like you’re finally trying to get some momentum, trying to move forward. And they’re still springing stuff on us with no notice, and no way to plan.”

At Shorty’s Pizza in West Broadway, co-owner Dave Hawkins said it’s been difficult to explain to customers why prices are getting higher, especially in times where everything is getting more expensive.

“I don’t know if this particular increase is going to be the one where people are going to feel satisfied, but it would be a step in the right direction, the gradual growth and recognition that people do this job not just as a means to an end, some people do it as a career and it’s their livelihood,” he said.

There’s a hope raising the minimum wage offsets some of the side-effects of inflation — recent studies say people are less willing to eat at restaurants — but it’s more likely people will still be cutting back after the relatively small increase in wages.

“You would hope that that’s the goal, that the goal is to give a little bit more to people working in whatever industry… and they’re able to do more things, enjoy more and go out more, and then it just feeds the economy,” Hawkins said.

“The scary thing is that if it goes up and everything trends down, then we haven’t really taken two steps forward.”

One minimum-wage worker (who asked not to be named out of concern he would face retribution at his workplace) said, while the increase is small, it’s needed.

“I’m also a student, so in my personal opinion, I think it going up benefits me regardless, even if it is just a little bit of money,” he said. “That’s still more money in my pocket, that’s still more money that I can save towards doing laundry or buying groceries. Even just transportation to get those groceries.”

malak.abas@freepress.mb.ca