P.E.I. minimum wage increases: Too much or not enough?
'Minimum wage is not a luxurious lifestyle ... but it is tough when you're on the end that has to pay for it'
Are P.E.I.'s minimum wage increases too much or should they go even higher? It depends who you talk to. CBC Radio's Island Morning convened a panel Wednesday to hear arguments from both sides of the raging debate.
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- Minimum wage debate rages on in P.E.I.
- P.E.I. minimum wage moving to $11
- Minimum wage increases bad for business: Chamber of Commerce
- P.E.I. minimum wage increases irk restaurant industry
Anti-poverty and labour groups like P.E.I.'s Federation of Labour say the increases are necessary, and the minimum wage should go go even higher.
"It's a tough one," said Erin McGrath-Gaudet, a policy analyst with the Canadian Federation of Independent Business, which represents hundreds of small- and medium-sized Island businesses.
"A lot of small business owners can certainly respect that minimum wage is not a luxurious lifestyle, to be sure, but it is tough when you're on the end that has to pay for it."
'Target of at least $15 an hour'
Ann Wheatley with the P.E.I. Working Group for a Liveable Income said, although she is "really happy" to see minimum wage going up, the increases don't go far enough.
"Eleven dollars [an hour] does not represent a livable income," Wheatley said.
"Increasing the wage has to be done in increments, but I think we should have a target of at least $15 an hour," she added.
The CFIB and other business groups would like to see wages tied more closely to economic indicators including P.E.I.'s gross domestic product, which grew only 1.5 percent last year, while the minimum wage will be increasing almost five per cent. She added, increases to P.E.I.'s minimum wage have far outpaced cost-of-living increases for the past decade.
"They're going to end up having to make some tough decisions," said McGrath-Gaudet. "Either they're increasing prices ... or cutting back on staff, staff hours."
Increase spending power
Wheatley argues many food bank users, about 16 per cent, are employed full time but don't earn enough to make ends meet.
"P.E.I. has among the lowest wages in the country," Wheatley said.
"It's in our interest, obviously, to have healthy small- and medium-sized businesses in this province," she added. "But I'm not sure the evidence is there that when minimum wage is increased that employment actually goes down."
Increasing the spending power of those in the lowest income bracket can be good for business, Wheatley added.
"The economy is a really complex beast," countered McGrath-Gaudet.
"Looking at wages going up and that being spent in the economy: If that's going to Wal-Mart and then the money is going out of the economy, then that certainly won't necessarily be felt on the ground."
Wheatley said she hopes wages will go high enough so people wouldn't necessarily have to depend on bargain-basement prices touted by stores like Wal-Mart. She noted a high proportion of P.E.I.'s workforce work for minimum wage, and seasonally.
Aiming higher?
"Very nervous," is how McGrath-Gaudet said she feels about a $15 minimum wage. If businesses are spending more on wages than they're taking in, she said they'll go out of business and there will be no jobs.
"Minimum wage can only ever be one of those tools that is used to eliminate poverty," she said. "It doesn't address seasonal work, it doesn't address people who have barriers to employment."
The CFIB representative echoed the calls of other lobby groups, calling on the province to raise personal income tax exemptions.
Wheatley worries raising the personal exemption amount would affect people in the higher income bracket negatively, and result in a net negative effect on the Island economy.
"Definitely we need a fairer tax system, and I think we would agree on that," Wheatley said.
With files from Matt Rainnie