The provincial government recently announced the minimum wage is increasing to $11.40, effective April 1, 2019. Talk of minimum wage increases can be a hotly debated topic. On one hand these increases are meant to raise the standard of living for low income workers. On the other hand, it could be argued that it places a financial burden on small businesses.
Pros of Raising Minimum Wage
The cost of living, especially on a remote island in the middle of the North Atlantic Ocean has increased significantly over the years. Partly due to inflation and partly due to our reliance on the import trade. Previous wage increases have not kept parity with inflation increases and it’s harder now than ever for low income earners to stay above the poverty level. Respectively, higher wages can lead to improved consumer spending giving our economy a boost.
Cons of Raising Minimum Wage
Small businesses may be inclined to raise prices to offset these costs. Alternatively, in order to keep wage costs down, employers may look to automate processes, potentially leading to a decrease in the employment rate. It can sometimes be disheartening for employers to pay more for what they may consider entry level positions. Some could argue the point of how much impact such a small increase could have on the individual versus the impact it would have on small business.
Where do you stand on raising the minimum wage? A chance to close the gap on the cost of living or an unnecessary burden on small business?