CAUSE FOR CONCERN Minimum wage increase impacts restaurants
Posted on 10/01/2015
Alberta restaurants, still adjusting to lagging sales due to a declining economy, must now brace for significant labour cost increases that come into effect with minimum wage increases starting today. The $1.00 rise in the general minimum wage is 10 times inflation and the $1.50 rise in the liquor server wage is 16 times inflation.
"Restaurant owners aren't opposed to minimum wage increases, but they want them to be introduced at a pace that's manageable for labour-intensive businesses operating on very thin profit margins," said Mark von Schellwitz, vice president Western Canada for Restaurants Canada. Since last May, when the new Alberta government promised a minimum wage increase to $15 an hour by 2018, Alberta's economy has deteriorated significantly. Employment Insurance claims increased by 72% between July 2014 and July 2015, and the unemployment rate increased to 6.0% in August 2015 as compared to 5.2% in August 2014.
"(The) minimum wage increase will undoubtedly lead to higher prices and fewer job opportunities. It comes at a bad time for Albertans who are struggling to cope with the worst economic decline in years," said von Schellwitz. "Our members are once again asking the government to slow down the pace of these planned increases, and to work with us to find ways to grow the labour market, not shrink it." Restaurants Canada will monitor the repercussions of the increases, and will work with the Alberta government on solutions to protect employment, particularly for young people looking for their first jobs.
There are 10,200 foodservice businesses in Alberta employing 149,700 people. The number of young Albertans (age 15 – 24) employed in the restaurant industry is 58,000.