New minimum wage will doom local businesses

The Ontario government’s decision to increase minimum wage to $14 per hour this January is impractical. This change will ignore small business owners who already struggle to make ends meet.

Although shift workers look forward to a fatter paycheck, this hike in hourly pay doesn’t consider the little people – the local businesses and families in our community who can’t afford to pay employees like the other big players. According to an article written by CBC’s Alexandra Sienkiewicz, small business owners will pay the price for the looming wage hike, and jobs will be lost – fast.

The Ontario government plans to hike the minimum wage rate to $14 per hour this January, followed by $15 per hour in 2019. Premiere Kathleen Wynne announced the planned wage increase this past May.

Local business owners are already bracing themselves for cutting jobs, and in the worst-case scenario, closing down altogether. Sienkiewicz interviewed Karl Baldauf, vice-president of policy and government relations at the Ontario Chamber of Commerce.

Baldauf says he is concerned there has been no analysis of the workplace change. “If you increase minimum wage, how many job losses will occur as a result, because businesses can’t afford to pay their employees? Or how much will everyday products cost consumers because of the price increases that come with extended benefits?”

According to Statistics Canada, small and medium-sized businesses employ 87.3 per cent of all Ontarians. These smaller businesses will suffer from the wage increase. The big corporate businesses will manage just fine regardless of change. Premier Wynne was quick to dismiss concerns when asked about how the change will affect local businesses.

In an interview with Lisa Wright of the Toronto Star, Wynne defends the potential job loss by focusing on how impoverished Ontarians currently don’t make ends meet. “I have been very clear that in a province as wealthy as Ontario, to have people who are working full time at maybe two jobs and still [have to] go to the food bank… it’s unacceptable,” Wynne says.

She vaguely defends people living under the poverty line in Ontario, but Wynne fails to acknowledge the businesses across the province that will be forced to cut jobs, inevitably making the poverty problem in Ontario grow exponentially.

The government has been too hasty to meet the demands of protesters. It’s beginning to seem like Ontario is hiking up the minimum wage simply for the sake of change, while glossing over how this will impact Ontario’s economy over time.

Increasing minimum wage to the eventual $15 per hour will be a step backwards, with family-run stores shutting down, and job losses occurring more frequently. The change in wages needs to be introduced gradually, in order to accurately analyze how the economy responds to increasing rates. Otherwise, we could quickly see the economy crash.

The solution for preventing the economical crisis in Ontario is simple – the government needs to slow down and stop meeting every demand protesters make. There needs to be more analysis, more evaluation, and most importantly, more consideration of the small businesses who will suffer.

Why should our favourite “mom-and-pop” businesses suffer from this wage hike without heavier consideration? Before making this huge change to our economy, Premier Wynne and the rest of Ontario’s government needs to sit down and weigh the detriments of changing minimum wage this quickly, before it’s too late.