CASCUMPEC, P.E.I. — Many Island employers bracing for an increase in minimum wage costs next year are resigned to the reality that wages are a necessary cost of doing business.
The Prince Edward Island Employment Standards Board has mandated a 60 cents-per-hour increase to the basic minimum wage effective next April 1. The minimum hourly wage will move to $12.85 per hour, up from $12.25 (as of April 1, 2019), $11.55 on April 1, 2018 and $11.25 on April 1, 2017.
The increase rarely effects just the minimum wage earners, suggested Anne Arsenault, general manager of Tignish Initiatives.
“There’s two sides to it. It’s difficult to live on minimum wage, but on the business side of things, it obviously adds more expense to the bottom line. It does contribute to hardship to the business side of things,” she said.
“At some point when the margin gets squeezed too much, the business either has to go out of business or increase their prices, but it gets to a point where there is only so much that the market, or the consumers, are willing to pay, too.”
Winners and losers
The Tourism Industry Association of P.E.I. (TIAPEI), in a recently issued news release, agreed there will be winners and losers.
“While we see this as good news for employees earning the basic minimum wage on P.E.I., we are very concerned about the effect this will have on small business owners,” said TIAPEI’s CEO Kevin Mouflier.
Moufier said TIAPEI advocates that increases to the Basic Personal Tax Exemption would provide more relief to low-income workers than increases to the minimum wage.
The association has also been advocating for a one-year advance notice on wage increases. Mouflier said many operators had already set their budgets for the 2020 tourism season.
Tammy Rix, executive director of the West Prince Chamber of Commerce, said her members have a mixed reaction to the increase.
“(The) retail and food industry will be hit the hardest with smaller margins to work with,” she said, adding other small businesses that employ seasonal workers will have to adjust cost of services accordingly.
Rix is also finding some positives for business in the increase.
“Raising the minimum wage can actually help businesses reduce turnover, improve productivity and perhaps increase the chances of employees staying more content in a job longer,” she said.
'We don't have enough people'
The P.E.I. Agriculture Sector Council maintains a listing of job openings in the farming sector, including some where minimum wage is indicated.
Laurie Loane, the council’s executive director, said they have no position on the wage increase, but agrees it is just one of the ever-increasing costs of doing business. She’s not seeing the increase having much of an impact on the current job shortage in the industry.
“We could have 50 jobs advertised. We could have over 250 jobs advertised in the month and have a very difficult time filling a quarter of them,” she said. "We don’t have enough people.”
While recognizing the benefits for the workers, she doubts the increase will have much of an impact on retention.
“We have some farms that pay more money but still have the same retention problems as a farm that don’t necessarily pay the same wage.
“Agriculture is a hard industry to work in; it is tough,” Loane acknowledged.
Darrell Wallace is an owner of Wallace Family Farm, a seed and process potato producer in Cascumpec. He said wages are just one factor in operating a business.
"Our expenses keep going up, whether it’s wages, fuel, fertilizer, chemicals … everything seems to be on the upside other than the crop that we’re selling,” he said, adding farms have to pay more than minimum wage to retain their workforce.
“If I went to a guy and said, ‘Would you drive my truck this fall to dig potatoes?’ The first thing he is going to ask me is, ‘What are you paying?'
‘Oh, whatever minimum wage is.’ He’d just sit around and laugh at you.”
“They’re not going to work for that. There’s no way.”
