Employers Council asking for halt in minimum wage increases

Staff ~ The Telegram
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The Newfoundland and Labrador Employers' Council (NLEC) is asking the provincial government to halt any further increases in minimum wage and allow businesses time to adjust to the "significant rise in cost."
The provincial government announced today that effective Thursday, the provincial minimum wage will increase by 50 cents to $10 per hour - an increase that represents the final step of its 2007 Blueprint commitment of achieving a minimum wage of $10 per hour by 2010.
In a news release, the NLEC stated it has been hearing from numerous employers on the issue, including businesses that pay well above minimum wage, who are concerned with the rapid increase in minimum wage and the upward pressure the increases are putting on wages.
"This is an extremely rapid and significant increase for employers in their cost of doing business," says Richard Alexander, NLEC executive director. "In addition to the increase in wages, these changes also drive up the tax on labour an employer has to pay, things like WHSCC premiums, payroll tax, EI premiums and CPP benefits. Particularly for small business owners, this has been a difficult adjustment and time is needed to absorb these costs before any further increases should be considered."
The news release notes that Newfoundland and Labrador has the highest tax on labour of any Atlantic province. In addition to recent increases in minimum wage, employer Workers' Compensation premiums are the highest of any province and Newfoundland and Labrador is the only province in Atlantic Canada still has a payroll tax, a direct tax on employing people.
Even with these costs, and the significant increases made to minimum wage over the last five years, there is pressure from labour groups for government to make further regularly scheduled increases to minimum wage as an anti-poverty strategy.
The news release states that research by the NLEC does not support minimum wage as an effective instrument to address poverty. While increasing minimum wage will put more money in the pockets of some low-wage earners in the short term, research done on increasing minimum wage indicates that in the medium to long term increasing minimum wage actually causes a decrease in employment levels. Employers have to find ways to address the increased cost of employment through shifting from labour to capital and cutting back on the number of employees or employees hours.
"It is a simple reality that the more expensive it is for businesses to employ individuals, the less they are able to employ," Alexander said. "There is overwhelming evidence indicating that increasing minimum wage actually increases unemployment. Does it make sense that the province with the highest unemployment rate in the country also has the second highest minimum wage? Government needs to take some time to seriously consider the implications this significant increase in the cost of employment has on business in this province before making further increases."

Organizations: Newfoundland and Labrador Employers

Geographic location: Newfoundland and Labrador, Atlantic Canada

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Recent comments

  • Robb
    July 20, 2010 - 13:03

    Here a thought Susan Kennedy......you try and operate a business....with everyone and their dog robbing from you, including the trusted empolyees, and costs through the ceiling....they can't pay for little Johnny as thye are too busy trying to pay, pay, and pay.....and don't come back with your lowly empoyee crap....that is just what it is....you don't like the work, start your own business...then see who shuts their mouths.

  • I will not be a victim
    July 20, 2010 - 13:02

    I am all for people making a living wage,but the same people who are in this wage bracket will not be able to bear the increase in comsumer goods/services prices which have been rising exponentially since the minimum wage increases. I spoke with a lady the other day who works for a catering company as a supervisor she makes $11/hr and has been for the past 3 years.She has seen no pay raises,yet the workers she supervises now make $1 per hr less than she does,yet she gets all the responsibilty.She said she would gladly take a demotion,but her employers will not let her. The biggest winners in the minimum wage increase game are big businesses,they can easily absorb the costs (they get huge wage subsidies and have very few actual full time workers,saving themselves a bundle in benefits and have jacked up the price of consumer goods far beyond belief)-been to a grocery store lately? The biggest losers are small businesses who will be forced to close,and people in the wage bracket just above minimum wage-they will be forced to pay higher prices that they are not acclimatized to,and they can absolutley forget any future pay raises.

  • Anne
    July 20, 2010 - 13:02

    Government needs to take some time to seriously consider the implications this significant increase in the cost of employment has on business in this province before making further increases--

    Now they are threatening government and the poor workers who have to who clean up their spoiled children's poop.

  • Edward
    July 20, 2010 - 13:02

    Let me see, $10.00 per hour x 40 hours = $400.00 (Gross) x 52 weeks = $20,800 (Gross Annual), less Income Tax, CPP, EI, Rent (forget a mortgage), Heat, Electricity, Food and Clothing = Robbs' greedy jokers . Have the Debtors' Prisons closed? Are the Workhouses' all full? I must cut Cratchitt back to one lump of coal per day. I think Robb suffered a typo and added one too many b's to his name.

  • greg
    July 20, 2010 - 13:02

    The news release states that research by the NLEC does not support minimum wage as an effective instrument to address poverty

    Yeah? let's see it. I doubt that document will ever be studied in a School of Economics. Probaly a survey of cheap, cheezy, labour standards violating minimum wage employers snivelling and bawling about a ten dollar a week increase to their casual employees. Looks good on ya!

  • Saucy Face
    July 20, 2010 - 13:02

    The news release states that research by the NLEC does not support minimum wage as an effective instrument to address poverty
    And day to day research by real hardworking people who are on striving to make ends meet disagree ...

  • Susan Kennedy
    July 20, 2010 - 13:02

    You people are amazing!!!! Here's a thought, if you can't the heat, let your slaves out of your kitchens and do the crap yourselves. See how long it will take to shut your mouthes and stop nickel and diming these people whose hard work is paying for little Johnny's private lessons.

  • Keeper
    July 20, 2010 - 13:02

    Goverment need to freeze any additional minimum wage increases. It is driving the cost of housing, rent, groceries, etc. Average income workers like myself don't get the increases but still have to pay for the increase in the cost of living. Maybe if minimum wage increases 50 cents, everyone should get a 50 cent increase. Anyone lately check the cost of groceries? The only people benefiting are the ones living with their parents working a minimum wage job. Anyone, working minimum wage and struggling to make ends meet will continue to struggle due to increase in cost of groceries, gas, rent, etc.

  • ³
    July 20, 2010 - 13:02

    If your margins were THAT slim to begin with, you were about to go under anyways. Healthy, well-managed businesses will survive. Don't make minimum wage a scapegoat - go look in the mirror instead.

  • daqwn
    July 20, 2010 - 13:02

    Well I agree that the wage should go up ., due to the fact of everything else is rising ..housing, rent, utilities,the list goes on . The cost of everything has risen , and therfore so whould the wage to try and stay in par with inflation.

  • Joe
    July 20, 2010 - 13:02

    I think that the business in NL have made enough money off the poor hard working prople paying them pennies while the get rich off the workers . Gone are the days of well I am lucky to have a job that keeps me home , Maybe we will start paying on par with the rest of Canada and stop taking take advantage of the workers just because they want to stay home with thair their families

  • MUN Student
    July 20, 2010 - 13:02

    This article is almost too absurd to comment on ... I take it back, it is too absurd to comment on so consder this a non comment.

  • flash
    July 20, 2010 - 13:02

    Dont matter to Danny Billions

  • Robb
    July 20, 2010 - 13:02

    Could not agree more....it is pretty easy for all of this labour organization jokers to want increases in minimum wage as they don't have to pay it......they can just work their 9 - 4:30 cushy job and head on to the country home for the weekend......but the small business owner cannot. Small business owners are the backbone of the economy, and the wage hike may easily work against the workers. I know in our businesses, we will probably have to lay off some to pay for the increases of others...and never mind hiring someone new.......so pull in your stupid horns labour councils...maybe you should be paying for all the people that will be displaced by increasing wages to the second highest in the country. You stupid unions are always saying, oh we need to be on par with other provinces....well, the minimum wage should be on par too....but no, you greedy jokers just can't get enough....you keep it up until your business shuts down.

  • Geoff
    July 20, 2010 - 13:02

    Small businesses need to step up their game a little. Make personable relationships with customers, do follow up calls with customers, treat them like family. Car salesmen have this process figured out. A good salesmen distingishes his/herself from others by creating a lasting relationship. Once you buy from him/her, they'll call you to make sure its everything you wanted. They'll contact you periodically to keep in touch, eventually the relationship is so strong that you'll buy from that person because he/she has shown so much interest and concern for your satisfaction! If small businesses go out and be proactive, they'll have nothing to worry about. Naturally not everyone will have the drive to do this, so only the fittest will survive. Hail the eager small business person!!!!!! OH, and payroll tax is a joke, that needs to be revisited and eliminated!!!!!!

  • John
    July 20, 2010 - 13:02

    Do all employers also have to add 4% vacation pay to that also?

  • Red
    July 20, 2010 - 13:02

    I've got to laugh at this. If left up the the employers they would have you work for nothing like days of old. I haven't heard of many businesses going bankrupt for having to pay a fair wage. Cry me a river. More money paid to employees equals more money into the economy. If you cannot afford to pay your workers this pitiful increase then take it out of your own lucrative salary that you draw down from your business each year. I have a small business and I can afford to pay it. My father paid 10 dollars and hour 25 years ago. Shame on anyone who expects people to work for for less money. Try living on 10 dollars an hour with todays prices.

  • Vladimir
    July 20, 2010 - 13:02

    Typical bourgeois fat cat trying unconvincingly to justify slavery of the proletariat! We must smash the capitalists once and for all!

  • Jack
    July 20, 2010 - 13:02

    Now that Newfoundland and Labrador's minimum wage will increase to $10.00 per hour effective July 1, 2010, I think the minimum wage should still increase to annual inflation rate plus one percent per year.

    Because the province has Canada's highest cost of living, especially with low apartment vacancies and high rental costs, as well as necessity costs among Canada's highest, the minimum wage must increase to meet the increasing cost of living.

    NLEC, contrary to your views, keep the minimum wage increasing so all hard workingin Newfoundlanders and Labradorians have a better quality of life.

    For NLEC, your focus should be set of getting the government to lower WHSCC costs and eliminate the payroll tax and stop attacking hard working people.

  • recently laid off
    July 20, 2010 - 13:02

    Having worked for a small locally owned company doing payroll this constant increase in minimum wadge is brutal. I ended up losing my job because we could not afford to keep the doors open and pay the staff. Rising staffing costs and reduced consumer spending in the past few years is a scary thing for employers do deal with. I am now out of a job and a BIG part of the reason is the rising staffing costs.