Minimum wage hike moves Manitoba in wrong direction

WINNIPEG, Nov. 16 /CNW/ - Under the promise of 'moving Manitoba forward,' the provincial government has dealt many employers a huge setback by announcing another increase to the minimum wage in 2011.

In today's Speech from the Throne, the Selinger government committed to the increase with virtually no consultation with employers. "The ink has barely dried on the last minimum wage increase and the government is once again telling restaurant operators they have to spend more to do business in Manitoba," says Courtney Hirota, Vice President Manitoba-Saskatchewan for the Canadian Restaurant and Foodservices Association (CRFA).

This year's 50-cent minimum wage increase, which took effect Oct. 1, cost Manitoba's restaurant operators an estimated $16 million, or $7,000 per restaurant in increased labour costs. A similar increase was introduced in 2009, when two 25-cent increases to the minimum wage were implemented. The 2010 increase was nine times the rate of inflation forecast by TD Economics (+0.6%). 

"The province holds up the elimination of the Small Business Tax as the solution to every business owner's challenges. But in the restaurant industry, where 30 cents of every dollar goes directly to labour costs, the Small Business Tax is a drop in the bucket," says Hirota.

Manitoba's 2,200 restaurants, bars and caterers directly employ more than 38,000 people, making the restaurant industry one of the top five private sector employers. More than half of those employees are young people between the ages of 15 and 24.

"Restaurant operators are still recovering from the recession, so to learn that the government has decided to forge ahead with an increase with virtually no discussion is disheartening to employers who have invested in Manitoba. Restaurant owners are running out of options to absorb these increases that are far outpacing economic growth," says Hirota.

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 $60-billion foodservice industry employs more than one million people in communities across the country.

For further information:

Courtney Hirota at 204-926-8667 (office), 204-688-8557 (cell) or [email protected]