Higher labour costs will result in fewer jobs for youth: CRFA

TORONTO, Jan. 30, 2014 /CNW/ - The Canadian Restaurant and Foodservices Association (CRFA) warns that the Ontario government's increase to the minimum wage will result in fewer jobs for youth, a population that has already been identified as underemployed.

At nearly 17%, the youth unemployment rate in Ontario remains well above pre-recession levels. The bulk of empirical research finds that it's primarily the young, inexperienced and unskilled whose job prospects are hurt by a minimum wage increase.

CRFA agrees with the decision to tie future increases to the Consumer Price Index (CPI), as suggested in its submission to the minimum wage advisory panel, but argues that a large, one-time adjustment is unnecessary, tough for small business, and counter-productive. The 7% increase will cost the average Ontario restaurant $9,440 per year.

"On one hand, the government is doing the right thing by giving our members the ability to plan for increases, but on the other hand they mandate a large increase that wasn't planned for," said James Rilett, CRFA Vice President, Ontario. "This will increase costs to the restaurant industry by $287 million at a time when our members are being hit with a raft of other cost increases."

Ontario's restaurants employ 200,000 young people under the age of 25, which accounts for 20% of all jobs for youth in the province and 45% of the jobs in the industry. 

"This increase will hit at the same time students are looking for summer jobs," explained Rilett.  "What they will find is fewer available jobs. This will cause the youth employment problem to worsen and many young people won't get the important job experience that will serve them in their future careers."

CRFA is one of Canada's largest business associations, with more than 30,000 members representing restaurants, bars, caterers, institutions and other foodservice providers. Canada's restaurant industry generates $68 billion annually in economic activity and employs more than 1.1 million people in communities across the country.

SOURCE: Canadian Restaurant and Foodservices Association

James Rilett, 416-738-9546, or Prasanthi Vasanthakumar, 1-800-387-5649, ext. 4254 or [email protected].