Increasing minimum wage decreases employment: CFIB research report

TORONTO, Feb. 10 /CNW/ - The Canadian Federation of Independent Business (CFIB) has released a research report challenging the overall effectiveness of minimum wage policy in Canada. Minimum Wage: Reframing the debate reveals that minimum wage increases tend to hurt the very people they are supposed to help.

Small business owners aim to offer competitive wages that will help them attract and retain good staff. However, large jumps in the minimum wage force business owners to reduce hours, reduce training or even eliminate jobs.

Contrary to groups that assert minimum wage increases do not adversely affect the economy, CFIB's research report paints a very different picture on the potential job impact. To illustrate, the report estimates that a 10 per cent increase in the minimum wage across all provinces costs up to 321,300 jobs. These jobs losses would take the form of hiring freezes, slower employment growth, or direct job cuts during economic downturns. "At a time when the economy is in slow recovery, the last thing governments should be considering are policies that further hinder job creation," said Marilyn Braun-Pollon, CFIB's Vice President for Saskatchewan and co-author of the report.

Minimum wage rates currently range from $8.00 in British Columbia to $11.00 in Nunavut. Since 2001, most provinces have substantially increased their minimum wage rates. British Columbia is the only province that has not increased its minimum wage since 2001.

Far from achieving the government's stated aim of poverty reduction, minimum wage increases can significantly add to the payroll costs small firms are already forced to pay, leaving employers with no choice but to scale back. "Governments should consider all other alternatives in place of minimum wage increases so that small businesses' ability to create jobs is not compromised. It's time provincial governments are held accountable for the ineffectiveness of their minimum wage policies," said Braun-Pollon.

The report calls for governments to focus on more practical and effective ways to help low income earners, such as providing additional income tax relief and training opportunities. "Small businesses want to ensure employees are able to keep more of their income and are able to upgrade their skills for better paying positions. It's time to reframe the debate," concluded Braun-Pollon.

To view the report in full, please visit www.cfib.ca

As Canada's largest association of small- and medium-sized businesses, CFIB is Powered by Entrepreneurs™. Established in 1971, CFIB takes direction from more than 108,000 members in every sector nationwide, giving independent business a strong and influential voice at all levels of government and helping to grow the economy.

SOURCE CANADIAN FEDERATION OF INDEPENDENT BUSINESS

For further information:

or to arrange an interview with Marilyn Braun-Pollon, contact Meghan Carrington or Adam Miller at 416 222-8022 or emailpublic.affairs@cfib.ca

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