Wage increase draws mixed reaction

Businesses want lower taxes to address poverty

Like thousands of Manitobans working for minimum wage, Jared Fast received a 6.25% raise on April 1.

The part-time line cook at a North End Burger King, who is pursuing a business administration diploma at Red River College, saw his wage increase to $8.50 an hour from $8.

“Of course I’m happy to get a raise,” said Fast. “But even if I was working full time it would only be an extra $20 a week.”

Fast said he wouldn’t be able to support himself if he wasn’t living with his parents. He also said he doesn’t know how anyone could support themselves, let alone a family, on a minimum wage income.

A minimum-wage earner working 40 hours a week in Manitoba will now take home $17,680 before taxes.

“That’s not enough money for someone to have a decent place to live, and pay for food and clothes and everything,” Fast said.

Despite this sort of reaction from workers, the local business community is outraged by the third minimum-wage increase since 2006.

Shannon Martin, Manitoba director of the Canadian Federation of Independent Business (CFIB), said the only real winner from the increase is the government, which will be collecting more taxes from the poorest Manitobans.

“The minimum wage is a blunt instrument to deal with the much larger issue of poverty,” said Martin. “If the government was serious about dealing with poverty, increasing the basic personal exemption would have a far greater impact.”

The basic personal exemption is the amount of income a person may earn before they are taxed. Manitobans are exempt on their first $8,034 earned, the third-lowest amount in Canada. (Only Newfoundland and Labrador and Nova Scotia have lower exemptions.)

Martin also points out that Manitoba is one of only three provinces that do not index personal income taxes to inflation. The CFIB would like the personal exemption (and all tax brackets) to increase every year in step with inflation.

Carol and Roy Finley, who have owned and operated Ducky’s Fish and Chips on Notre Dame Avenue for 17 years, say the increase won’t have an immediate effect on their business because they already pay their four employees more than $9 an hour.

“I always keep it that way because otherwise it’s too drastic on a business when the government raises the wage,” said Carol.

“(A sudden wage increase) would affect us a lot because it wouldn’t let me accrue the money I need to properly maintain my business.”

Roy said the increase was little more than political “smoke and mirrors” designed to make the government look better.

Martin said minimum-wage increases tend to affect more workers than just those making the minimum.

“For a lot of employers there is pressure on them,” he said. “You want to reward long-term employees and you want them to have a certain gap between minimum wage and they’re earning.”

But the Finleys have no plans to give all their employees 50-cent raises just to maintain that gap.

“We give them a raise every year,” said Carol. “I try to make sure that they don’t need to have two jobs.”