As the minimum wage in Nova Scotia increased to $15.00 per hour today, the Canadian Federation of Independent Business (CFIB) is calling for a more predictable and fair system that better supports low-income workers in the long run.
While we acknowledge the intent behind this wage increase, we believe it’s imperative to discuss the broader implications. We call for a shift towards a more predictable and fair system that pegs minimum wage to a percentage of the median wage prevalent in the provinces, so they increase in parallel to each other, reflecting real, measurable situations.
A predictable minimum wage system tied to the median wage is a strategic measurable step toward achieving fairness for both workers and businesses. This approach provides the stability necessary for businesses to plan and invest in their workforce, ultimately contributing to a more robust and resilient economy.
We also urge policymakers to consider more effective policies to support low-income workers, such as increasing the personal tax credit or exemption.
The impacts of minimum wage increases on small businesses:
- Challenges for Small Businesses: According to CFIB’s recent survey of small businesses, 85% of business owners expressed concerns about the financial strain caused by sudden and substantial minimum wage hikes. Many fear this could lead to job cuts, reduced hours, or business closures.
- Reduced Job Opportunities: CFIB’s research indicates that abrupt increases in minimum wage can discourage employers from hiring entry-level workers, disproportionately affecting young and vulnerable job seekers (31%). The survey found that 25% of businesses anticipate reducing hiring in response to minimum wage increases.
- Inflationary Pressure: CFIB research has highlighted the potential inflationary impact of frequent and substantial minimum wage increases. This can erode the purchasing power of all workers, including those earning minimum wage, contributing to the overall cost of living. Recent data shows that 59% of businesses have increased prices for products and services in reaction to minimum wage increases.
The CFIB believes that a more balanced approach is necessary to better support low-income workers while not placing the total burden on small businesses. We encourage Nova Scotia policymakers to engage in constructive dialogue with businesses and workers to develop a fairer and more predictable minimum wage system.