Minimum wage hike bad for restaurants, bad for jobs

WINNIPEG, June 18, 2014 /CNW/ - Hiking Manitoba's hourly minimum wage to $10.70 will cost the province's restaurateurs $8.1 million, or an annual average of $3,320 per restaurant. This decision by Minister Braun makes Manitoba's minimum wage the second-highest in the country, outside the territories.

"Restaurateurs are constantly squeezed by high food and utility costs, consumer price sensitivity, and now, yet another increase in the provincial minimum wage that exceeds inflation," said Dwayne Marling, Manitoba/Saskatchewan Vice President of Restaurants Canada. "This increase also severely impacts the restaurant industry's ability to continue creating first-time jobs, which will only prop up the province's already high youth unemployment rate."

The Selinger government regularly points to removal of the small business tax to justify raising wage costs for restaurant and other small business owners. However, government made that tax change four years ago, while increasing the minimum wage by more than double the rate of inflation over the last 14 years. Now, only Ontario has a higher minimum wage than Manitoba.

"The cost of this wage hike has to come from someplace like less income for operators, an increase in menu prices for all Manitobans, reduced hours for employees, fewer job opportunities for youth, or a combination of all four," said Marling.

Quick facts:

  • 22 per cent of Canadians had their first job in the restaurant business – highest of any industry
  • 1 in 5 young people between the ages  of 15 and 24 are employed in the restaurant industry
  • Manitoba's youth unemployment rate is 9.3 per cent, nearly double the province's adult rate
  • Labour accounts for more than 30 per cent of a restaurant's expenses
  • Inflation in Manitoba since 2000 has been 34 per cent, while minimum wage, including the announced increase, has gone up by 78 per cent.

Restaurants Canada is a national association comprising 30,000 businesses in every segment of the foodservice industry, including restaurants, bars, caterers, institutions and their suppliers.  Through advocacy, research, and member programs and services, Restaurants Canada is dedicated to helping its members in every community grow and prosper. 

Canada's restaurant industry directly employs more than 1.1 million Canadians, contributes $68 billion a year to the Canadian economy, and serves more than 18 million customers every day.

SOURCE Restaurants Canada

For further information: Media Contact: Dwayne Marling, 204-926-8557 or dmarling@restaurantscanada.org; Prasanthi Vasanthakumar, 1-800-387-5649 ext. 4254 or pvasanthakumar@restaurantscanada.org