The Alberta government’s strategy of tackling poverty by boosting minimum wages is hard to swallow, complained local restaurant owners on Wednesday.
Labour Minister Christina Gray got an earful from restaurateurs opposed to hiking minimum wage for servers who also receive tips during a two-hour Red Deer and District Chamber of Commerce luncheon.
Red Deer’s ABC Country Restaurant owner Charles Leclair said servers who receive tips make far above minimum wage already. Requiring business owners to boost the base wage simply creates additional and unnecessary costs that must be passed on to customers.
“That needs to be changed. It really does need to be looked at,” he said.
The government should exempt tip-earning servers from the province’s plan to boost the minimum wage to $15 an hour by 2018, he said, a position that has been widely supported by restaurant owners across Alberta.
Gray said the government considered, but ruled out, a tiered minimum wage system that would pay young adults and servers less.
The rationale for not going to tiers was that “equal work deserves equal pay as well as making sure there was a minimum wage that all Albertans can count on,” she said later.
Some suggested the wage hikes may do more harm than good overall.
“I have to suggest I disagree with that,” said Gray. “Increasing the minimum wage is going to put more money into the pockets of low-wage workers, people who are working hard jobs to support their families.”
While there may be some cost increases, the province has studied experiences elsewhere and consulted economists and is confident the wage increases will help those in need without hurting the economy, she said.
In Alberta, 300,000 people make less than $15 an hour, including 36,000 single parents.
While the government isn’t budging on the minimum wage issue, it is working with the small business community to help them weather the economic slowdown.
Gray said reducing small business taxes is one method and the government is open to other suggestions, she said.
Red Deer Earls Restaurant owner Bill Olafson said no one questions the government’s goal of helping low-income Albertans.
“To continue to jack up the minimum wage is just not a solution,” he told the minister.
Raising minimum wages for all employees across the board will create a “bump effect” that boosts inflation and costs for all Albertans, he argued.
Others also questioned the timing given the province’s economic woes.
Richard Carramusa, who is a partner in seven Central Alberta Boston Pizza restaurants, believes improvements to the employment insurance system are needed.
The system does not require enough accountability from job seekers and offers little incentive for many to give up benefits to take a job.
Business owners suffer because they spend time and money training potential employees who then quit to go back on benefits. Carramusa suggested businesses that make the effort to take workers off unemployment rolls by offering them work be compensated for the investment they have made in new hires who stop showing up.
Gray was in Red Deer for a day-long tour that included meetings with city council, Central Alberta Refugee Effort and others. She has been meeting with representatives from communities across Alberta all summer.