Many of Manitoba’s low income earners and small businesses owners should start bracing to take a hit. On Monday, May 15th, the Manitoba government introduced Bill 33: The Minimum Wage Indexation Act, which will annually index the minimum wage based on inflation during the previous calendar year.
This is the wrong move.
Big labour in Canada continues to aggressively beat the drum for increasing the minimum wage across our country. Nobody should be surprised that the heads of Canada’s most powerful unions are pushing unsustainable wage increases – it’s just what they do.
Much of the rhetoric is centred on notions of “poverty reduction” and “social justice”. This narrative plays well in the hands of politicians who choose to frame minimum wage increases as helping low-income earners. In reality, minimum wage hikes are less about poverty reduction and more about politics and driving up government revenue. In fact, the folks who likely benefit least from minimum wage increases are low-income wage earners, especially when you consider other options at the government’s disposal that will definitely put more money in these workers’ pockets.
For those who say minimum wage hikes don’t have a negative impact, they should talk to the owner of their favourite restaurant and local grocery store. We’re not talking about billion-dollar multi-nationals that can absorb the cost. This is about your neighbourhood hardware store, your florist, and your local hair dresser.
Indexing minimum wage increases to inflation, like Bill 33 proposes to do, does not solve these problems. While indexing minimum wage to an economic indicator is an easily assessable tool for governments, entrepreneurs worry that this approach assumes affordability for their businesses, and does not reflect current economic conditions.
Instead, entrepreneurs know that there are better ways to improve the standard of living for low-income earners. CFIB’s survey also found the majority supported measures that would allow Manitobans to keep more money in their pockets. Over 80 per cent of Manitoba small business owners said government should reduce personal income tax rates for low-income earners; 71 per cent said to raise the basic personal/spousal exemption. Nearly half support better training programs to help workers upgrade their skills. Only three per cent support significantly higher minimum wage rates.
The new Manitoba government took a positive step in the right direction when they committed to index the Basic Personal Exemption (BPE) and personal income tax brackets to inflation. But Manitoba’s 2017 BPE of $9,271 still lags well behind the national average. By contrast, workers in Saskatchewan can claim $16,065, this year before they start paying taxes. The Premier committed to increasing the BPE to the national average ($11,000), but more can and needs to be done.
Given the shortcomings of minimum wage policy, the government should have first exhausted its ability to actually help low-income earners through tax relief and training initiatives, before moving forward with Bill 33.
That is the common-sense approach. It is an approach that small business owners know will work. Most importantly, it is the best way to help Manitoba’s low-income earners.
Jonathan Alward is the Manitoba director of provincial affairs with the Canadian Federation of Independent Business (CFIB). CFIB advocates on behalf of 4,800 small- and medium-sized businesses on Manitoba and 109,000 members across Canada. Jonathan can be reached at email@example.com or you can follow him on Twitter @cfibMB.
CFIB is Canada’s largest association of small and medium-sized businesses with 109,000 members (4,800 members in Manitoba) across every sector and region.
Republished from MyToba.ca May 16, 2017
Republished from Westman Journal May 25, 2017