Hiking the minimum wage will result in fewer staff and higher prices, some local small business owners are warning.
Ben Morelli, owner of From the Grind Up, said although he supports raising the minimum wage, it will make it difficult for him to provide competitive wages for his employees.
“Right now, I try to pay my staff more than minimum wage to stay competitive,” Morelli noted.
“A lot of the other restaurants' servers, because they have a different sort of kitchen and server set-up than I do, will make more in tips,” he explained.
"There's a difference between [a] server's minimum wage and regular minimum wage, and I always pay regular.
“This initial increase isn't going to [affect] me a lot,” Morelli admitted.
“That being said, it will make me a lot less competitive than other restaurants in town,” he stressed.
Morelli noted he has chosen to have less staff on hand because of the gradual increase in minimum wage, which the provincial government recently announced will jump to $14/hour this Jan. 1 and then to $15/hour on Jan. 1, 2019, since he opened his doors in 2013.
“I've actually dropped one staff member," he said. ”One less than I had when I first opened.
“Some of that has to do with [the wage increase] and some it has to do with the streamline of the business,” Morelli remarked.
“It does impact my hiring decisions.”
Still, Morelli reiterated he's not against the minimum wage rising.
“I just think the government should be doing it's part to subsidize small business, so that they don't put small business out and raise inflation,” he reasoned.
Ted Debenetti, owner of the Buck or Two here, said if the minimum wage goes up, items in his store won't be “a buck or two” anymore.
“What will happen is that our overhead will go up, which means suppliers will charge more,” he explained.
“The cost of living will go up and we'll have to factor that into our business.”
Please see “Minimum,” A7
Debenetti also expressed concern about people who are on a fixed income, such as seniors and those on disability.
“Seniors will end up having to pay more,” he warned.
“They won't receive the benefit of a higher wage.”
Even those who do make $15 an hour won't benefit that much from the wage increase, Debenetti added.
“You'll need that extra money because the cost of living will just go up,” he noted.
“And then when you earn more money, you pay more taxes.”
Debenetti said the benefit of owning his own business is that he can work for himself.
“The beautiful thing about my store is that I work for it,” he remarked.
“I only have three employees, who are usually students.”
Meanwhile, the Times asked its Facebook page followers what they thought of the increase to minimum wage, and the majority felt it was bad news.
“[Fifteen dollars] an hour doesn't seem like a big jump to some people, but for our business it's going to cost an extra $500,000 in payroll,” wrote Bryce Campbell, owner of the Copper River Inn here.
“It's stressful knowing that we have to find room in our operating budget for this increase, and we will, but I can see it being too much of a burden for some businesses and I doubt they will survive,” he warned.
“The biggest hit will be restaurants," noted Campbell. ”The net operating margin for that industry is only five percent.
“Adding an increase in labour [costs] of 32 percent will mean a net operating margin of minus-five percent for the restaurant industry if operations stay status quo.”
“It will result in higher prices at the stores to cover the wages so the minimum wage earner will be no farther ahead,” posted Sherri Lynn Shine.
“Everything else is just going to increase to cover everything, but it would be nice to see a cap on utilities so people could actually try to get ahead for once,” suggested Crystal Smith.
“I think that it will further create a decline in small business ownership,” noted Arlene Georgeson.
“I don't agree with it," posted Casey Marchant. "With the raise of minimum wage comes a raise in the cost of living.”
“The [government] seems to be the only one who benefits from wage increases,” wrote Connie Wagner Hendrickson.
“Increase in wage equals a higher tax bracket.”
“$15 for no education or training . . . insane,” posted Savannah Lee Basaraba.
“Higher wages mean higher taxes,” echoed Dave Wilde.
But a few wholeheartedly agreed with the minimum wage hike.
“The sky will not fall! Every time minimum wage increases, our economy gets better,” posted Marilyn J. Ogden.
“Right on and it's about time,” said Virginia Giguere.
“About time—especially for the people who can barely make ends meet as it is,” agreed David Brown.
“I don't know how anyone can live on less than $15 an hour,” posted Harold Huntley.
“Hopefully it'll be $20 by 2020.”