Announcements
Business leaders caution voters about cost of NDP platform
Thousands of jobs will vanish, businesses will close doors if NDP elected
VANCOUVER (May 5, 2009) – BC business leaders (listed below) representing more than 50,000 small- and medium-sized employers issued the following statement today to working British Columbians:
“Jobs are at risk on May 12. Higher taxes and higher payroll costs featured in the NDP platform will put at least 110,000 British Columbians out of work and put at risk the viability of BC’s small- and medium-sized businesses.
The sectors of the economy we represent are working hard to keep their businesses open and keep people on the job through this global economic downturn. That will become harder with the $450 million in extra payroll costs, courtesy of the NDP’s 25 per cent minimum wage hike. Job losses are estimated at 50,000 as a direct result of the minimum wage increase.
We are also deeply concerned with the NDP singling out of two sectors – power producers and liquor stores – with punitive tax measures and cost increases. Simply, the NDP plan will put the thousands of jobs in these sectors – and the small businesses that supply them and their employees – at risk. The NDP plan would kill off private businesses and their jobs while unfairly promoting the wishes of public sector unions.
The small- and medium-sized businesses we represent want to keep people employed. We want to keep the economy going. We want the next government to build a foundation for recovery so BC can emerge quicker and stronger from this downturn.
An NDP victory means small businesses will lose out on the long-term small-business tax relief promised by the BC Liberals. The NDP have promised $40 million of relief in 2009/10, compared to $210 million promised by the BC Liberals each and every year by 2012.
The most important question for the May 12 election is this: Which election platform helps to retain jobs and builds the foundation for a quick economic recovery?
In short, the NDP platform will hold BC back by working against recovery. A BC Liberal platform will help small businesses keep people employed, and get a jump-start on recovery.”
This statement is issued by:
Coalition of BC Businesses * – John Winter |
Alliance of Beverage Licensees of BC * – Kim Haakstad |
BC Hotel Association * – James Chase |
BC Chamber of Commerce * – John Winter |
BC Restaurant & Foodservices Association * – Ian Tostenson |
Building Supply Industry Association of BC * – Thomas Foreman |
Canadian Home Builders Association – BC * – M.J. Whitemarsh |
Canadian Restaurant & Foodservices Association * – Mark von Schellwitz |
Independent Contractors and Businesses Association * – Philip Hochstein |
Independent Power Producers – BC – Steve Davis |
New Car Dealers Association of BC * – Blair Qualey |
Retail BC * – Mark Startup |
Retail Council of Canada * – Max Logan |
Western Convenience Store Association - Wayne Hoskins |
* Coalition of BC Businesses members
Paycheques and jobs at risk on May 12
Op-ed Published in the Vancouver Sun, May 5, 2009
John Winter, Chair
Coalition of BC Businesses
(word count: 632)
Small business employers and employees have a huge stake in the May 12 provincial election. Government sets the ground rules that impact these businesses’ ability to thrive and even survive.
In a global economic downturn, British Columbians want to hang on to their jobs and keep their businesses afloat. The most important question for the May 12 election is this:
Which election platform helps to retain jobs which platform builds the foundation for a quick economic recovery?
In short, the NDP platform would hold BC back by working against recovery. The NDP’s planned 25 per cent minimum wage hike, increased costs for power producers and independent liquor stores would kill jobs and delay BC’s recovery.
Increasing the minimum wage in this down economy would deal a crushing blow to workers – most of them young people out in the workforce for the first time. Simply, their first paycheque and career-building job experience is at risk.
The $450 million hike in payroll costs would force small companies to cut back – and that would mean fewer hours and fewer jobs for the very people the increase is supposed to help. Academic studies indicate that 50,000 jobs for young workers could vanish.
That’s not even taking into account the fact that an international expert on greenhouse-gas emissions predicts the NDP’s environmental platform would cost B.C. 60,000 jobs.
The NDP say they will reduce the pain of the $450 million cost with small business tax relief. But what they offer is a one-time small-business tax holiday worth $40 million. They have been misleading in claiming this is a one-year holiday. Around $210 million a year is collected in small business taxes – so the $40 million in the NDP platform amounts to 10 weeks without tax, not a year.
Simply, it’s too short-term a measure. It is also a massive retreat from the permanent reduction in the small business tax the NDP promised when they first said they would hike the minimum wage.
The real path forward that small businesses and the folks they employ need is one of lower taxes and long-term stability. These are the hallmarks of the BC Liberal platform.
When a small business owner has their eye on the bottom line and retaining staff, they want to know they will be able to write that paycheque next week and next year.
The BC Liberals have promised to retain the current $8 an hour minimum wage. In tough economic times, it’s reassuring to know your payroll costs will remain constant for a while.
And the incumbent BC Liberals plan to build on their tax cutting record of the past eight years – they will leave small businesses in control of more of their money. The BC Liberal platform has committed to effectively end small business taxation by making BC’s rate the lowest in Canada by 2012, and increasing the small business tax exemption to $500,000. With Manitoba slated to drop its rate to zero, B.C. will likely have the same rate within three years.
Taken together, these are powerful long-term tools in the hands of small business owners. Leaving money with small businesses is a powerful tool. They can hire, train, and retain workers. They can make long term staffing plans. They can invest in expansion. They can keep moving forward.
Small businesses are the lifeblood of our economy. We employ more than one million British Columbians. We generate one-third of B.C.’s economic activity. We make up 98% of the businesses across the province.
Weighing the commitments and the small business plans of both parties, one thing is clear. Paycheques and jobs are at risk on May 12.
NDP’s ‘beer bomb’ to edge out independent liquor stores
$155 million “liquor surcharge” payback to protect Big Labour friends
VANCOUVER (May 1, 2009) – The Coalition of BC Businesses says the NDP plan to boost liquor prices is part of a wider strategy to edge out independent liquor stores and reward their supporters at the BCGEU by eliminating private sector competition.
“Sticking it to the independent liquor stores will protect Big Union jobs at the government-run stores but it will also kill jobs in the private sector,” said John Winter, Coalition Chair. “The NDP profess to want to help some employees with a minimum wage hike but at the same time they’re giving the backhand to hard-working employees at over 650 independent liquor stores.”
Winter said that BC can accommodate and should encourage a balance between both government and independent liquor stores to create choice for consumers. However, the $155 million surcharge would tip the balance in favour of government-run stores and deliver a serious blow to independents.
The NDP call for a $155 million “liquor surcharge” over three years, buried on p. 54 of their 2009 Platform.
Referring to careless comments yesterday by NDP leader Carole James and her finance critic Bruce Ralston about their plans to hike beer prices, Winter said it shows a lack of respect for consumers and employees of independent liquor stores.
“It’s disturbing when a potential premier and finance minister dismiss their planned cost increases with a let-the-chips-fall-where-they-may attitude,” said Winter. “Anyone who understands business knows that $155 million in extra costs leads to higher prices, fewer jobs or both.”
The Coalition of BC Businesses speaks for organizations representing over 50,000 small and family-owned businesses active in all sectors of B.C.’s economy.
Business coalition issues warning about NDP small business tax holiday
Some businesses have impression they won’t pay tax for a year – but they will
VANCOUVER (April 23, 2009) – The Coalition of BC Businesses is warning small businesses owners across B.C. that they are mistaken if they think the NDP will give them a one-year-long holiday from paying the small business tax.
Page 52 of the NDP platform costs out the holiday at $40 million, while a recent Vancouver Sun story reports that the Ministry of Finance estimates $210 million a year is collected in the small business tax.
“It’s clear from the numbers that this so-called holiday is a pretty short vacation – it actually works out to 10 weeks of not paying the tax,” said John Winter, Chair of the Coalition of BC Businesses. “Any impression that it translates into zero tax for a year is totally incorrect.”
The BC NDP platform states, “Providing a tax holiday for small business. Carole James and the NDP will boost small business with a one year tax credit against the small business income tax.”
Winter said the short-term impact of the so-called holiday falls short in the way it is being presented by the NDP – as an offset to increased payroll costs from the NDP’s planned 25% increase in the minimum wage.
“Small businesses are facing a potential $450 million increase in their payrolls with the NDP minimum wage hike. The small business tax holiday represents less than nine per cent of that cost – and is only in the first year. The higher payroll costs will be imposed forever,” Winter said. “We’re already dealing with a down global economy, and higher payroll costs would force small businesses to reduce hours and even jobs.”
The NDP argument that the tax holiday will help with increasing payroll costs also ignores the fact that the tax is only paid when a business makes a profit. So in tough times small businesses could face increased payroll costs but get no tax break whatsoever.
“The small businesses that employ almost half of working British Columbians need stability, certainty, and long-term commitments to keep people on the job,” Winter said. “The NDP tax holiday falls short in every way in meeting the needs of the people who keep British Columbians on the job.”
The Coalition of BC Businesses speaks for organizations representing over 50,000 small and family-owned businesses active in all sectors of B.C.’s economy. The Coalition of BC Businesses was formed in 1992 to represent the voice of small and medium-sized businesses in the development of British Columbia's labour and employment policies.
Business coalition says NDP platform would cost jobs
VANCOUVER (April 17, 2009) – The Coalition of BC Businesses says the NDP platform released last week does nothing to change the Coalition’s concern that paycheques and jobs would be at risk if the NDP win the May 12 election. The NDP’s reversal on business tax cuts and commitment to increase payroll costs would handicap BC businesses’ ability to quickly emerge from the global recession.
“In a booming economy the NDP platform would be dangerous to small businesses and their ability to retain workers. In today’s global crisis, their plan would put British Columbians out of work,” said John Winter, Chair of the Coalition of BC Businesses.
“The biggest risk to employees is the NDP’s 25% increase in the minimum wage promised in the platform. That would add over $400 million a year in new payroll costs, even when their small business tax holiday is taken into account,” said Winter. “Those added costs would force small businesses to reduce costs, hours, and jobs – which hurt the employees the increase is supposed to help.”
The NDP platform also proposes a one-year small-businesses tax holiday – a measure that backs away from their earlier commitment to lower the small business tax rate by one-percentage point.
“The small business tax holiday is too short-term for small-business owners to take to the bank. What small businesses need to ride out the global economy is long-term tax cuts and certainty that British Columbia will remain on firm financial footing,” Winter said.
In comparison, the BC Liberals committed last week to use revenues from the carbon tax to reduce the small business tax to the lowest rate in Canada by 2012, and increase the small business tax exemption to $500,000. That will make the rate less than the one percent - the lowest in Canada.
“The BC Liberal commitments will effectively mean most small businesses will not be paying this business tax – that is a powerful long term tool that can be used to increase wages and train and retain employees,” Winter said. “That’s a stark contrast to the higher payroll costs under the NDP plan.”
The Coalition of BC Businesses speaks for organizations representing over 50,000 small and family-owned businesses active in all sectors of B.C.’s economy. The Coalition of BC Businesses was formed in 1992 to represent the voice of small and medium-sized businesses in the development of British Columbia's labour and employment policies.
For more information, contact:
Victor Vrsnik, Coalition Coordinator
Tel: (604) 682-8366
Cell: (604) 764-2877
Business Policy Forum champions employee rights and jobs
Coalition of BC Businesses unveils top 10 labour & employment priorities for election
Vancouver (April 2, 2009) – The Coalition of BC Businesses unveiled its blueprint for the next government to enhance employee rights and create and maintain employment with a targeted list of 10 labour and employment policies agreed to at today’s 2009 Small Business Policy Forum.
“In these challenging economic times, the top priority of British Columbians is keeping their jobs,” said John Winter, Chair of the Coalition of BC Businesses. “That’s why the Coalition launched the “Vote BC Jobs” campaign in January, and that’s why we came together to look at the policies that will allow small- and medium-sized businesses to keep as many people as possible working.”
The 2009 Small Business Policy Forum, held at the Wosk Centre for Dialogue, brought together representatives from the 15 associations that make up the Coalition of BC Business. The 10 labour and employment policy recommendations that came out of the meeting include, among others:
- Maintaining the minimum wage at its current rate. Increased payroll costs, such as 25% minimum wage increase, could force employers to cut back on hours or positions.
- Maintaining the secret ballot vote - restored in 2001 - so workers have the democratic right to vote their conscience on whether or not to unionize.
- Lifting the ban on replacement workers so employers can keep their businesses afloat by hiring job-seeking employees during a strike.
(note – a full list of the policy recommendations is in the backgrounder below)
“Positioning our province as a champion of employee rights and jobs will enhance B.C.’s reputation as a stable and attractive destination for employees and investors alike,” said Winter. “That stability will help keep people on the job and help employers staff up when the economy turns around.”
The Coalition of BC Businesses speaks for organizations representing over 50,000 small and family-owned businesses active in all sectors of B.C.’s economy. The Coalition of BC Businesses was formed in 1992 to represent the voice of small and medium-sized businesses in the development of British Columbia's labour and employment policies.
COALITION OF BC BUSINESSES
Backgrounder
2009 Small Business Policy Forum
10 Employment and Labour Priorities
- Maintain B.C.’s current minimum wage of $8.
- Take action on Coalition recommendations to meet BC’s demographically-driven labour supply challenges.
- Maintain secret ballot vote for union certification and decertification.
- Make the rules decertification the same as those for certification.
- End the requirement that employees must notify the union when canceling a union membership card during an organizing campaign.
- Remove the Labour Relations Board’s remedial authority to impose a certification or dismiss a decertification without a membership vote.
- Eliminate the ban on replacement workers.
- Change the Labour Relations Code to ensure that a union cannot require an employer to terminate an employee because the employee has been expelled or suspended from a union for a reason other than failure to pay union dues or initiation fees.
- Amend the the Labour Relations Code so that employees have a choice about union representation when a bankrupt business is restarted. The new owners should not be required to inherit the previous union certification and collective agreement.
- Implement a dues check-off system that would enable employees to authorize whether they wish to have their union dues spent on any activities other than the administration of their workplace’s collective bargaining relationship.
Small businesses are big economic drivers. They:
- are 98% of all businesses in B.C.
- generate more than one-third of all economic activity in B.C.
- employ more than one million British Columbians
- provide almost half the jobs in B.C.
- are home to over 56% of B.C.’s private sector jobs - the highest rate in Canada.
Business coalition seeks clarity on NDP $11 minimum wage
Vancouver, BC (March 20, 2009) – The Coalition of BC Businesses says the NDP should clarify how high they want to increase the minimum wage.
The Coalition has learned that NDP MLA and Employment and Income Assistance Critic Jagrup Brar told the ‘First Call: BC Child and Youth Advocacy Coalition’ that the minimum wage “should be $11 an hour in 2009, then indexed.” This stands in contrast to the NDP’s stated policy to raise the minimum wage to $10 as one of their first acts if elected.
“Employees and employers need to know what to expect if the NDP is elected,” said John Winter, Chair of the Coalition of BC Businesses. “Would the minimum wage increase to $10 or $11 in 2009 and how much more every year after that?”
Winter noted that any increase would create a barrier to employment in B.C. – especially for young workers and first-time employees. Research shows a 25 per cent increase in the minimum wage could cost BC up to 52,000 jobs for workers aged 15 to 24.
“Increasing the minimum wage in a global economic downturn is the wrong policy at the wrong time,” Winter added. “Coming out of a recession, a higher minimum wage would take us back to the rising youth unemployment of the 1990s. Summer employment would dry up. Young workers would lose out on wages and experience.”
Winter also noted that a large increase to the minimum wage would ripple through the economy, pushing up broader wage and pay roll costs for small businesses at a time when they can least afford it.
You can see MLA Jagrup Brar’s comments on Page 7 of ‘First Call’s’ January 2008 minutes: http://www.firstcallbc.org/pdfs/CurrentIssues/minutes%20jan%209.pdf
BC business coalition welcomes new labour mobility legislation
Ending provincial barriers will benefit small-business, employees
March 13, 2009
VANCOUVER (March 13, 2009) – The Coalition of B.C. Businesses congratulated the BC Government on today’s introduction of legislation to begin taking down the barriers to labour mobility in Canada.
“Our ‘Vote BC Jobs’ campaign is all about the need for the right labour policies in British Columbia. The right labour policies help businesses thrive. The right policies protect employee jobs,” said John Winter, Chair of the Coalition of BC Businesses. “Today’s legislation is good for labour – and is a key step in getting rid of the arbitrary barriers that prevent workers certified in one province from working in another.
The nationwide Agreement on Internal Trade (AIT) mirrors earlier agreements spearheaded by British Columbia to increase labour mobility. Under AIT, a person certified (say as an electrician) in any province will be recognized and able to practice their profession in any other Canadian jurisdiction.
“Existing barriers for professionals and trades people have made it too expensive for too many employees to move to where the work is available. This has hurt the small- and medium-sized businesses represented by the Coalition of BC Businesses,” Winter added.
“This legislation is going to make sure trades people and regulated professionals can seize the opportunities wherever they exist in Canada – and this will certainly help businesses here in BC”
NDP promise will kill jobs
February 27, 2009
Dear editor,
NDP leader Carole James’ commitment to boost the province’s minimum wage to $10 an hour “one of our first acts” (Rally bolsters party faithful) needs to be seen for what it is – putting people out of work by playing politics.
The 25 per cent increase in the minimum wage promised by the NDP leader will cost somewhere between 11,000 to 52,000 jobs for workers aged 15 to 24, the Fraser Institute estimates.
Jobs are already at risk because of the global economy. Hitting small businesses – the sort of mom and pop operations who make up the membership of the Coalition of BC Businesses – with a minimum wage hike would hurt employees the most. Small businesses would have to cut hours, payroll, and positions.
Simply, the minimum wage and the maximum wage for someone without a job is the same -- zero.
John Winter, Chair
Coalition of BC Businesses
Coalition applauds minimum wage stand
By John Winter, Chair
Coalition of BC Businesses
February 25, 2009
Not doing something doesn’t usually make headlines. But one line from the BC government’s roadmap should.
In its speech from the throne delivered February 16, the government took a stand not to take action – a stand that will have many small and family-owned businesses breathing a sign of relief.
That line is: “Now is not the time to impose hundreds of millions in new costs on small businesses through an increased minimum wage that will mean more job losses, will depress job creation and will hurt those it purports to help.”
Kudos to the government for resisting the temptation to score cheap political points by hiking the minimum wage. Such a move, while it may have won votes, would have hurt working families and small businesses at the worst possible time. The government especially deserves credit because they took this stand in the face of an intense campaign by the leadership of BC big unions and the Opposition.
When jobs are already at risk from the global economy, a minimum wage hike would hurt employees the most because small business owners, already in the lurch, would have to cut hours, payroll, and positions. Simply, the minimum wage and the maximum wage for someone without a job is the same -- zero.
The real way to help working families in times like these is the path the government has charted this week. Programs that harness the potential of our resource industries to create jobs – the sort of jobs that support working families. Increasing health care, education and social spending. A focus on realistic and ready-to-roll infrastructure projects.
B.C. lost 35,000 jobs in January – the majority of those losses in the manufacturing and construction industries. Though it’s easy to forget right in the midst of the crisis, there was record employment in construction back in September.
The silver lining is that B.C. has the opportunity to get these folks back on the job – sooner rather than later – by investing in the right infrastructure projects. Through the 1990s government policies created a massive infrastructure deficit. Now is the time to accelerate the work of the past few years in updating aging roads, bridges, and hospitals.
Infrastructure investments that help keep construction workers on the job will help B.C.’s small businesses. Many mom-and-pop operations serve this sector. The dollars that flow from these projects, to employees, and into the community, are key in keeping the economy going.
The government’s plans will help make sure BC will be one of the first economies to bounce back and bounce highest when the global economy recovers.
John Winter is Chair of the Coalition of BC Businesses, which is made up of organizations that collectively represent over 50,000 small and family-owned businesses active in all sectors of BC's diverse economy in communities throughout the province.
Small business needs provincial budget stability
By John Winter, Chair
Coalition of BC Businesses
February 13, 2009
British Columbians will get a glimpse of the provincial government’s economic plan on February 17 when Budget 2009 is delivered.
It will be one of the most important budgets in a long time. The unprecedented global economic downturn has hit Canada and B.C. hard. Close to $6 billion in previously expected provincial revenues have vanished. A record 129,000 jobs were lost in Canada in January. Surpluses are in the past. Deficits loom for the short term.
Simply put, the small businesses represented by the Coalition of BC Businesses have a huge stake in our economy, the budget and the May 12 provincial election. With the global economy changing so rapidly, with the credit crunch facing so many of us, we need stability, leadership, and experience at the helm.
Though it is hard to cheer the return of deficit financing, the fact that the provincial government is proposing sunset deficits that will expire in two years makes the best of a bad situation. It is simply the only choice if health care and education funding are to be protected.
B.C. lost 35,000 jobs in January – the majority of those losses came in the manufacturing and construction industries. Though it’s easy to forget right in the midst of the crisis, there was record employment in construction back in September.
The silver lining is that B.C. has the opportunity to get these folks back on the job – sooner rather than later – by investing in the right infrastructure projects. Through the 1990s government policies created a massive infrastructure deficit. Now is the time to accelerate the work of the past few years in updating aging roads, bridges, and hospitals.
Infrastructure investments that help keep construction workers on the job will help B.C.’s small businesses. Many mom-and-pop operations serve this sector. The dollars that flow from these projects, to employees, and into the community, are key in keeping the economy going.
Small businesses would also benefit from targeted tax reductions. This would build on last year’s reduction of the small business tax rate from 4.5 to 2.5 per cent in 2008. Those savings are already helping in the tough times.
Finally, from the perspective of the Coalition, the most important action that Finance Minister Colin Hansen can take is refusing to give in to big union and opposition demands for a 25 per cent increase in the minimum wage. When jobs are already at risk from the global economy, a minimum wage hike would hurt employees the most because small business owners, already in the lurch, would have to cut costs, payrolls, and positions. Simply, the minimum wage for someone without a job is zero.
Small businesses have played a key role in driving British Columbia’s economy over the past eight years. The statistics tell the story.
Small businesses are 98 per cent of all businesses in our province. They generated more than one third of the economic activity. They provide almost half of B.C.’s jobs. And when it comes to private sector jobs, small businesses are home to more than 56 per cent of employment – the highest rate in Canada.
BC is one of the best economies in the world to insulate itself from the impact of the global economic recession. BC will be one of the first economies to bounce back and bounce highest when the economic recovery occurs. In these troubled times, we just can’t risk change.
John Winter is Chair of the Coalition of BC Businesses, which is made up of organizations that collectively represent over 50,000 small and medium-sized businesses active in all sectors of BC's diverse economy in communities throughout the province.
A minimum wage increase will mean a cutback in jobs
By Mark von Schellwitz
Feb 11, 2009
Thousands of small business people remember the destructive impact of 1990s minimum wage policies in British Columbia.
From 1992 to 2001, minimum wage increased by 60 per cent, an astonishing increase that was more than four times the rate of inflation and three times the rate of growth in average weekly wages.
It's little wonder that small business owners, including those in the restaurant business, are deeply concerned about a proposal from Carole James and the New Democratic Party for an immediate 25-per-cent increase in minimum wage.
This misguided plan would impose more than $450 million in new labour costs on B.C.'s small businesses, according to the B.C. Chamber of Commerce. In these tough economic times, many small businesses are struggling as it is to stay afloat. If their costs rise dramatically, they will have no choice but to postpone new hires and lay people off. It just doesn't make sense, for either employees or employers, who are all trying their best to make ends meet.
Did the NDP learn nothing from the failed policies of the 1990s? The huge leaps in minimum wage during that decade had a devastating impact on small businesses and on young people looking for work.
The first two rounds of 1990s minimum wage hikes alone put 3,200 food service workers out of work, according to a 1995 Ernst and Young report. Unemployment among young people under the age of 25 rose to 20 per cent -- the highest rate west of Quebec. Meanwhile, youth employment grew by a healthy 10 per cent in the rest of Canada.
By contrast, the stable minimum wage environment in B.C. since 2001 has contributed to the lowest unemployment rate in more than 30 years. So far this decade the food service industry alone has hired more than 20,000 new young employees in the province, providing for many of them an opportunity to gain that all-important first-job experience.
Now the NDP and B.C. Federation of Labour want to put these opportunities at risk by using minimum wage as a tool to fight poverty. They say a 25-per-cent increase in the minimum wage will alleviate poverty and stimulate the economy, but the facts don't add up.
One has to wonder why a $10 minimum wage is being touted as an anti-poverty tool when nearly half (48 per cent) of British Columbians living in poverty are unemployed. For them, a higher minimum wage is inconsequential.
In fact, as we saw in the 1990s, increasing the minimum wage too high, too fast can worsen the situation by creating a ripple effect throughout the economy. As other wages rise to keep pace with a skyrocketing minimum wage, the cost of basic goods and services rises as well. At the same time, employers in labour-intensive industries are left with little choice but to control costs by cutting back on their staffing levels. Entry-level jobs are typically the first casualty.
Those who feel the minimum wage is a good way to fight poverty must ask themselves, why stop at $10? Why not impose a $15 or $20 minimum wage? Obviously this would create a lot of potential employees, but far fewer jobs and far more expensive goods and services.
This scenario was reinforced in a 2006 study for the federal government that concluded minimum wage is an "exceedingly blunt instrument for dealing with poverty, and may actually have a perverse effect, exacerbating poverty." Other studies have found that a 10-per-cent increase in minimum wage leads to a 2.5-per-cent decrease in employment for teenagers.
Most employers don't have a pool of extra cash to cover a dramatic increase in wages and payroll taxes. In B.C.'s food service industry, the average employer is running his or her business on a razor-thin profit margin that has fallen to 4.4 per cent due to payroll costs that have been driven up by the labour shortage.
Some argue that restaurateurs could simply raise their menu prices to pay for higher wages. In a highly competitive industry, with price-sensitive consumers, this is rarely an option.
Reasonable minimum wage rates serve an important purpose by allowing students and other entry-level employees to gain a foothold in the workplace. The vast majority of minimum wage earners are young, first-time employees who voluntarily work part-time and do not rely on their minimum wage income for their livelihoods.
Nearly 60 per cent of minimum-wage earners in British Columbia are between the ages of 15 and 24. In the food service industry, the numbers are even higher: Close to 80 per cent of employees earning minimum wage are under 25, with most of them still in their teens. Many also earn tips that push their income well above $10 an hour.
Far from living in poverty, these minimum wage earners are more than likely living at home and working part-time to gain job experience, work skills, extra income and savings for further education.
Clearly, government cannot generate prosperity through minimum wage legislation. A more effective strategy is to concentrate on helping people upgrade their skills to qualify for better-paying positions.
The federal and provincial governments deserve credit for changes to the tax system that allow low-income earners to keep more of their earnings. B.C.'s tax credits ensure no one making less than $15,500 pays provincial income tax.
In these uncertain economic times, B.C. can't afford to return to the job-killing minimum wage policies of the 1990s.
Mark von Schellwitz is vice-president, Western Canada, Canadian Restaurant & Foodservices Association. This column ran in the Nov. 28, 2008 Vancouver Sun.
News Release
FOR IMMEDIATE RELEASE
January 23, 2009
Business coalition launches “Don’t Risk Your Job on the NDP” campaign
Small business owners speak up in Coalition of BC Businesses election ads
VANCOUVER – The Coalition of BC Businesses is encouraging British Columbia’s working families to voteBCjobs.ca in its “Don’t Risk Your Paycheque and Job on the NDP” pre-election advertising and Internet campaign launched today.
“It’s important for small and family-owned businesses to speak up for the policies they believe are good for the B.C. economy,” said John Winter, Chair of the Coalition. “The Coalition will work to make sure those voices are heard and the needs of this key driver of B.C.’s economy are front and centre during the election.”
The Coalition’s advertising campaign spotlights real small business owners and operators talking about the need to maintain a strong economy and the risk of electing the NDP. The print and radio ad campaign kicks off January 24, 2009.
The Coalition’s Internet campaign will encourage working families to share their thoughts via the Coalition’s voteBCjobs.ca website. The website also features campaign ads, video testimonials, and a blog on small business related issues.
“Small business is a primary driver of B.C.’s economy. Small companies and their employees have a huge stake in making sure our economy remains strong,” said Winter. “British Columbia’s economy is the strongest in North America – and it’s in a better state than most to face today’s global economy. That’s why the Coalition is bringing these voices forward. We want British Columbians to know that the best way to protect jobs is to have an experienced government in Victoria.”
Small businesses are key drivers of the British Columbia economy. Small business…
- represents 98 per cent of all businesses in B.C.
- employs more than one million British Columbians
- provides almost half the jobs in B.C.
The Coalition of BC Businesses speaks for organizations representing over 50,000 small and family-owned businesses active in all sectors of B.C.’s economy. The Coalition of BC Businesses was formed in 1992 to represent the voice of small and medium-sized businesses in the development of British Columbia's labour and employment policies.
-30-
For more information, contact:
Victor Vrsnik, Coalition Coordinator Tel: (604) 682-8366 Cell: (604) 764-2877
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