REGINA, Oct. 3 /CNW/ - The provincial government's plan to reduce poverty
by raising the minimum wage is misguided and will not target low income
households, says the Canadian Restaurant and Foodservices Association (CRFA).
"We're disappointed that the government has chosen political expediency
over real solutions to addressing poverty," says Courtney Donovan, CRFA's Vice
President, Manitoba-Saskatchewan. "The research overwhelmingly shows that
minimum wage is a blunt tool for addressing poverty. Lowering taxes and
increasing the personal basic exemption are much more targeted ways of
assisting lower income earners."
The majority of minimum wage earners do not rely on their earnings as a
primary source of support. Most are young people between the ages of 15 and 24
who live at home with their parents. In the foodservice industry, many of them
earn tips well in excess of their hourly wage.
"Any benefits associated with minimum wage increases are just as likely
to affect high income households as low income households," says Donovan.
Researchers from the Organisation for Economic Co-operation and
Development (OECD) conclude that minimum wages have almost no effect when it
comes to reducing inequality and poverty among households.
"A mandated across-the-board increase with the related rippling effects
is not an appropriate way to deal with the very small minority of minimum wage
earners who are supporting a family. This sweeping approach sideswipes young
people needing a summer job or their first job," says Donovan.
Raising the minimum wage too quickly can actually hurt lower income
earners, because it discourages job creation and reduces entry level
opportunities for students and others looking to gain a foothold in the job
market. In the labour-intensive foodservice industry, thirty cents of every
dollar in sales goes directly to staff wages and payroll taxes, an amount
second only to food and beverage costs.
CRFA is also disappointed that the government has opted to use Statscan's
Low Income Cut-Off (LICO) as a measure of poverty, given that Statscan itself
has cautioned the LICO is not a measure of poverty.
For further information:
For further information: Courtney Donovan, CRFA Vice President,
Manitoba-Saskatchewan, 1-877-926-8557; Jeni Armstrong, CRFA Communications
Specialist, 1-800-387-5649, ext. 4254