Home Regular Contributors Entry-Level Wages are the Starting Point not the Destination

Entry-Level Wages are the Starting Point not the Destination

Amber Ruddy

The clock is ticking for Alberta business owners. In less than six months, the province will increase the minimum wage another $1.40 an hour to a nationwide high of $15 per hour.

The government’s campaign, which they call Destination Living Wage, politicizes job creation and frankly promotes a misconception that most people stay in entry-level jobs forever.

What’s worse is the move came without any regard for the economic impact this sharp increase would have on the provincial economy.

Today, almost half of minimum wage earners are young people under the age of 24. For those in our province working in entry-level positions, policies such as tax relief, training programs and education are far more effective than drastically hiking the minimum wage.

I remember my first job. I worked at a local coffee shop and was thrilled to be making just over the-then much-lower minimum wage. With this opportunity, I saved for an education and had some pocket money to enjoy leisure activities with my friends. I worked there for four years. In that time, I took on additional responsibilities, earned higher wages, and most importantly, I learned life skills that have stayed with me.

With an entry-level wage of $15, it’s hard to imagine someone would have gone through the effort of training me in customer service, time management and even basic skills like organization and being punctual when they could find someone with more expertise at that cost.

Canadian Federation of Independent Business (CFIB) analysis shows that almost one in three small business owners effectively earns $15/hr or less, compared to one in five employees. This is in part due to the long hours entrepreneurs regularly put in, with many clocking a 50-plus-hour workweek.

So when certain politicians vilify small business owners, casting them as fat cats and scrooges for opposing the minimum wage hike, it hits a big nerve for me.

Many small business owners treat their employees like family. They allow flexibility and personal support that big corporate firms are too bureaucratic and rigid to provide.

In a recent survey of over 1,000 Alberta small business owners, the CFIB asked business owners what changes they have already made as Alberta moves to a $15-an-hour minimum wage.

Fifty-five per cent have reduced or eliminated hiring plans. Almost half have raised prices. More than 40 per cent have reduced hours, and have cut back on the number of employees. Not exactly a road map to a destination we should be travelling to.

Running a small business is not for the faint of heart. Most entrepreneurs will fail in their first year. Many fail more than once. They work incredibly hard, make sacrifices and show the true grit that is part of our Alberta spirit. In the process of chasing their dreams, small business owners are now creating four out of five new jobs in the private sector in our economy.

Let’s craft policies that support entrepreneurs not punish them.

Amber Ruddy is the director of provincial affairs for the Canadian Federation of Independent Business. She can be reached at amber.ruddy@cfib.ca. Follow her on Twitter @aruddy.