Restaurateurs brace for $31-million jump in wage costs

HALIFAX, Jan. 22 /CNW/ - Restaurant owners are bracing for a 12.2 per cent jump in minimum wage this year. The proposed increase, which is ten times higher than the consumer price index, would mean a $31-million hit to foodservice employers or $16,000 a year for the average restaurant owner.

The Canadian Restaurant and Foodservices Association (CRFA) has been fielding calls and faxes from hundreds of frustrated business owners.

"I have been overwhelmed by the response from our members on this issue," says Luc Erjavec, CRFA's Atlantic Canada Vice President. "Many are asking me why government doesn't seem to care about small business operators who are struggling with a very tough economy."

The restaurant and foodservice industry is one of the largest employers in Nova Scotia, with nearly 30,000 employees -- more than the farming, fishing, logging, finance and insurance industries combined.

"A twelve per cent increase in minimum wage when inflation is running at just 1.2 per cent will ratchet up all wages in our industry. It's counterproductive at a time when we are struggling to preserve jobs," says Erjavec. "There are ways to protect small businesses and the jobs they provide while achieving the goal of reducing poverty."

Through letters, meetings and more than 300 petitions delivered to the government, CRFA has proposed several solutions:

    
    -  Reduce the income tax burden on low-income earners.
    -  Bring increases to the minimum wage in line with other economic
       indicators.
    -  Have a separate minimum wage for employees serving liquor -- as is the
       case in Ontario, Quebec and Maine -- to recognize the significant
       income they earn in tips.
    -  Leave the inexperience wage at the current rate.
    

Approximately three quarters of minimum-wage earners in the foodservice business are young people under 25 years of age, and well over two-thirds work part time. In most cases these individuals are living at home, are students or are secondary-income earners.

CRFA is one of Canada's largest business associations, with 33,000 members representing restaurants, bars, caterers, institutions and other foodservice providers. Canada's foodservice industry employs more than one million people in communities across the country.

For further information: Luc Erjavec, [phone] ext.101 or [email protected]; Prasanthi Vasanthakumar, Communications Specialist, 1-800-387-5649, ext. 4254 or [email protected]