Retail and Hospitality Feel Minimum Wage Hike Pain

Survey results show past impact, future harm to entrepreneurs 

Edmonton – With a $15 minimum wage now enacted in law and the latest hike coming this weekend, the Canadian Federation of Independent Business (CFIB) released new survey data today on how the retail and hospitality sector has felt the negative impact of past hikes, and how it feels about future planned increases.

 When asked: What impact have past increases to the minimum wage had on your business?  Fifty-four percent of Alberta business owners in the retail and hospitality sector saw reduced business profits, half (49 per cent) passed along hikes through higher prices, 43 per cent had no choice but to reduce the hiring of youth and less experienced workers and 41 per cent reduced hours of staff. 

image002“A dwindling bottom-line for small business owners means they have fewer dollars to invest in training, equipment and exploring ways to innovate and stay afloat.  Small business owners tell us that lack of business income means they are forgoing salaries themselves and are barely hanging on.  Close to half of business owners in the retail and hospitality sectors are effectively making less than $15 per hour,” said Amber Ruddy, CFIB’s Alberta Director. 

When asked: If the minimum wage rate was increased immediately to $15.00/hr, which of the following actions would your business take?  Fifty-six per cent say they will reduce the hiring of youth and inexperienced workers, 55 per cent will increase prices, 50 per cent will reduce hours and 45 per cent will cut down on the number of employees. 

image004“While the premier believes the Alberta government is ‘striking the right balance’, shouldn’t that imply some give and take?  What is being done to soften the blow to businesses, especially in the retail and hospitality industry operating on thin profit margins?  It’s time to see some compassion and compromise to avoid the unintended consequence of higher prices and fewer opportunities for young people,” concluded Ruddy. 

The control web accessed survey was conducted from June 13, 2016 to August 9, 2016 and received 7,495 responses from businesses across Canada including 1,030 in Alberta and 254 in the retail and hospitality sector. 

CFIB is Canada’s largest association of small- and medium-sized businesses with 109,000 members across every sector and region.