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Minimum wage hike bad for restaurants and jobs, says Restaurants Canada


June 19, 2014
By Canadian Pizza

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June 20, 2014, Winnipeg – Hiking Manitoba's hourly minimum wage will cost the province's restaurateurs $8.1 million, or an annual average of $3,320 per restaurant, says Restaurants Canada in a media statement.

June 20, 2014, Winnipeg – Hiking Manitoba's hourly minimum wage will cost the province's restaurateurs $8.1 million, or an annual average of $3,320 per restaurant, says Restaurants Canada in a media statement.

Manitoba’s minimum wage is set to go up to $10.70 an hour Oct. 1.

"Restaurateurs are constantly squeezed by high food and utility costs,
consumer price sensitivity, and now, yet another increase in the
provincial minimum wage that exceeds inflation," said Dwayne Marling, Manitoba/Saskatchewan vice-president of Restaurants Canada. "This increase also severely
impacts the restaurant industry's ability to continue creating
first-time jobs, which will only prop up the province's already high
youth unemployment rate."

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The provincial government regularly points to removal of the small
business tax to justify raising wage costs for restaurant and other
small business owners, says the association in its statement. However, government made that tax change four
years ago, while increasing the minimum wage by more than double the
rate of inflation over the last 14 years. Now, only Ontario has a higher minimum wage than Manitoba.

"The cost of this wage hike has to come from someplace like less income
for operators, an increase in menu prices for all Manitobans, reduced
hours for employees, fewer job opportunities for youth, or a combination
of all four," said Marling.

Restaurants Canada also shared several statistics:

  • Twenty-two per cent of Canadians had their first job in the restaurant business – the highest number of any industry.
  • One in five young people between the ages  of 15 and 24 are employed in the restaurant industry.
  • Manitoba's youth unemployment rate is 9.3 per cent, nearly double the province's adult rate.
  • Labour accounts for more than 30 per cent of a restaurant's expenses.
  • Inflation in Manitoba since 2000 has been 34 per cent, while minimum wage, including the announced increase, has gone up by 78 per cent.