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N.B. minister’s dual minimum wage proposal stirs debate


January 25, 2011
By Canadian Pizza

pzcanadianmoneythumbnailJanuary 24, 2011, Fredericton – The proposal from New Brunswick’s provincial finance minister calling for a two-tiered minimum wage system is receiving mixed reviews.

Finance Minister Blaine Higgs raised the idea at a public meeting last week. He suggested that workers under the age of 18 should continue to be paid the current hourly wage of $9 per hour, while older workers should receive a minimum wage of $10 per hour.

This would prevent an across the board hike to $10 per hour for all workers in the province, planned to go into effect by September.

Luc Erjavec, the Canadian Restaurant and Foodservices Association’s (CRFA) vice president for Atlantic Canada, called the minister’s comments “positive for restaurants and all small businesses in the province.” He added, “A lower wage for inexperienced workers who earn tips is common practice in other Canadian jurisdictions.”

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Although the proposed two-tiered system has received some support, the idea also has its detractors. 

The New Brunswick Union of Public and Private Employees warned that such a system would create division among workers, particularly younger workers earning less money for performing the same jobs as older colleagues.

The Fredericton Chamber of Commerce, meanwhile, supported the idea of a lower minimum wage for workers who earn tips or are being trained. However, the group argued that assigning all workers under the age of 18 to the lower tier would not produce significant savings for small businesses. The chamber noted that young workers account for a small portion of payroll expenses for many businesses, and tend to work only part-time.

But Erjavec says the minister’s idea has the CRFA’s support because: “A two-tiered wage system recognizes the high cost of training inexperienced workers and significant income earned by tipped employees, and could help employers create new jobs across the province.”

The restaurant industry is one of New Brunswick’s largest private-sector employers, with more than 24,000 direct employees – more than farming, fishing, forestry and mining combined.

According to the CRFA, the industry provides nearly one in five jobs for young people under the age of 25.