April 8, 2010, Winnipeg – Today’s announcement of a 50 cent increase to the minimum wage will cost Manitoba’s restaurant industry nearly $16 million a year in extra labour costs, says the Canadian Restaurant and Foodservices Association (CRFA).
The October minimum wage increase will be seven times the rate of inflation forecast by TD Economics (0.8 per cent).
“A mandated wage hike couldn’t come at a worse time for Manitoba’s restaurants, the vast majority of which are operated by small, independent business people,” says Courtney Hirota, vice president Manitoba-Saskatchewan for the CRFA. “Yet another wage increase of this magnitude will end up hurting the very people it is intended to help, because many employers will have no choice but to control their costs by cutting hours or even jobs.”
Ironically, the Manitoba government announced a wage freeze earlier this month to control its own payroll costs. To make matters worse, the government will collect more in payroll taxes from employees and small businesses as a result of the minimum wage hike.
CRFA has urged the province to find other ways to put more money in the pockets of low income earners through income tax reductions that benefit all workers in Manitoba.
Manitoba’s 2,196 foodservice establishments directly employ more than 38,000 people, making the industry one of the top five private sector employers in the province.
“The restaurant industry creates one in five jobs for youth as well as thousands of entry level opportunities for people looking to gain a toehold on the career ladder,” says Hirota. “Hiking the minimum wage by more than five per cent when restaurant operators are struggling to keep their businesses afloat during tougher times puts those opportunities at risk.”
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