The costs of paying a living wage

As a business group warns of dire financial penalties if provinces enact primary livable wages, an organization already doing so argues there are positives to paying employees extra.

Putting in place a primary livable revenue for employees is the aim of a invoice earlier than Parliament from the NDP.

Beatrix Abdul Azeez, a coverage analyst with the Canadian Federation of Independent Business (CFIB), checked out a hypothetical — what if small companies had been required to pay a residing wage of $20 an hour?

She discovered this fee can be devastating, and put as many as 600,000 small companies vulnerable to closure attributable to added prices.

“The pandemic has shown us that the CPI can go to crazy numbers. So we’re asking for them to actually tie it to median wages, which are more reflective of what’s going on in the labour market,” stated Abdul Azeez.

Additionally, she says slightly than elevating wages, decreasing taxes would do extra for affordability.

“Mandatory wage hikes don’t actually solve the affordability crisis — what they do is transfer the responsibility from governments to small businesses,” she advised CityNews. “It make the cost of doing business quite high and that can move businesses toward closure.”

But Liz Mok, the proprietor of Moo Shu Ice Cream in Ottawa, doesn’t see greater wages as a nasty factor. She says her firm has been paying livable wages since 2022.

“I don’t think that raising the minimum wage is going to solve everything but I also don’t think it’s something that we should be fighting against,” Mok stated.

Mok concedes she’s needed to increase costs however says that’s simply a part of the price of doing business.

“As small businesses, we don’t have a lot of room to negotiate how much rent we pay. Same with our input costs like our ingredients, our supplies. And so labour is one of the few that we do have control over. We should be conscious about what the market rate actually is and what our employees actually need to be paid to have a life where they’re free of financial stress,” she defined.

Despite having to make changes, Mok tells CityNews she has seen many advantages.

“Employee satisfaction has gone up, when we do hire we do get a lot of high-quality applications,” she famous, including they’ve additionally seen new business and extra loyal prospects because of this.

However, either side acknowledge a primary revenue isn’t the one reply to affordability points, and notice governments have extra to do extra to deal with the value of lease and groceries.