Updated January 5, 2018

When Tim Horton's gave Kofi Richter a pay increase he had mixed feelings. He didn't mind having a bit more money to spend but he was concerned that raising the minimum wage would hurt small businesses like the herb farm his parents run in Goodwood, Ontario.

That was back in 2016 when Ontario along with other provinces last raised the minimum wage.

Now with Ontario ushering in the biggest minimum wage hike in recent Canadian history from $11.60 to $14 per hour, the Western University student is more concerned than ever.

"Raising the minimum wage again is devastating for independent businesses," said 18 year old Richter, now working on a double major in science and business administration. "It's also going to mean fewer jobs for people my age."

That's a forecast supported by a new Bank of Canada report which finds that Canada's economy could have roughly 60,000 fewer jobs by 2019 than it would otherwise have seen with the bulk of the "statistically significant" shortfall affecting teenage employment and young workers 20-24.

"While I'm still a student, I don't think I should be paid as much as an older worker," argues Richter who thinks his solution (outlined below) could help to mitigate some of what he sees as the negative effects of the minimum wage hike.

Pay Me Less (October 17, 2016)

Kofi Richter doesn't have much time to gossip by the lockers with his fellow students. The Grade 12 proto-entrepreneur is known for wearing natty suits and for jogging between commitments at Port Perry High School to maximise the number of things he fits into his day—he has to.

The honour roll student juggles classes, meetings as the elected Student Trustee for the Durham District School Board and committee co-chair for the Ontario Student Trustees Association. He also puts in two eight-hour shifts every weekend serving the drive-through at the local Tim Horton's.

Image | Kofi Richter

Caption: Kofi Richter

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Like many teenagers in Ontario, Richter saw his hourly rate increase by 15 cents an hour in October 2016, topping him up to the newly raised minimum wage of $11.40 an hour. And he's more than happy with that. In fact, he doesn't believe that his employer should pay him a penny more.

"Youth and adult wages should not be equal," argues the energetic 17-year-old. "What incentive does a company have to hire an unreliable teenager—who's likely off to university or college in a few years—aside from the lower wages?"

Richter, who is also an enthusiastic member of his high school business entrepreneur club, Deca, looks to his parents' own small business operation growing and shipping herbs and specialty plants, to support his argument against wage increases for students such as himself—and even perhaps, for other minimum wage workers.

"I definitely don't think wages need to be increased. Just think about how devastating that would be to my parents business. The statistics from Alberta illustrate the effects excellently. As wages go up business are forced to budget and those cuts typically come out of the work force. This is exactly the case with my parents' business and I'm sure it's the same for many other small business owners."

Richter struggles with balancing his own need for more cash with an attempt to understand the implications of wage increases in the wider economy. He is trying to save for his long-term goal of completing his undergraduate university degree, followed by an MBA at a top business school either in Canada or, if he can get a scholarship, the U.S.A.

At the same time, he has had to reduce his shifts this school year from 40 hours to 16 hours a week because of all his commitments. And he knows, even working full time through the summer at Timmie's won't earn him enough to cover the rising cost of tuition and living expenses he'll incur, starting next year.

"The reason I say it's a complicated topic is because I don't believe the cost of post-secondary education should be such a burden on students. Student wages make it very difficult for a student to be self-sufficient directly out of high school and I don't think that's fair. Something need to change but the answer is not to lobby for higher student wages."

Kofi is interested in Britain's national living wage policy introduced this year, which focuses on improving wages for people over the age of 25, which will be around about the age he will be when he's ready to launch himself into the workforce. This scheme meant an increase of 50 p (80¢) to ensure a minimum wage of £7.20 ($11.53), with a goal of increasing the hourly pay rate to £9 by 2020, something which Prime Minister Teresa May has vowed to achieve despite grim economic forecasts for post-Brexit UK.

"I think the ideal system might be to raise minimum wage for adults who need to be self-sustaining (like Britain has done) but keep student wages where they are," says Richter.

"Currently the gap between a student's expenses and an adult's expenses does not reflect the gap between a student's wage and an adult's wage. Why is a mother of two who works full time at Tim Hortons only paid 70 cents more than I am, when all I have to worry about is gas money and University tuition? Increasing the wage gap will not only reduce poverty like economists suggest but it also make cheaper labor available to businesses that can't afford to pay increased wages—like my parents."

There are also tax policy mechanisms, such as the working income tax benefit which gives low income families tax relief or the earned income tax credit in the US, which has been called the cornerstone of anti-poverty policy and is the largest cash transfer program for low-income families with children while also dramatically increasing employment among single women with children.

"Intuition tells me that there will be a point at which raising wages will begin to have significant effects on inflation and unemployment," says Richter. "I think it's probably worthwhile for us to identify exactly what the optimal minimum wage might be. Whether it is £9 an hour or not I don't know, but we must make sure to have a firm understanding of what our limits are before minimum wage hikes go too far."

"I've seen some crazy coping mechanisms some small businesses are using to get around paying youth workers more," Richter said. "One strategy ski or snowboard hills are using is to bring workers on as 'volunteers' and then pay them under the table."

Richter agrees that economics is a fascinating subject. He says that he's set on making a future living as an entrepreneur but "for my first few years out of university I am not entirely against working for someone." Then he dashes off to another meeting before he has to clock in for his Tim Hortons' shift. And that Sunday in October 2016 at least, he managed to budget some time to call in to Cross Country Checkup.