Workplace Review Recommendations Place Small Business, the Foundation of the Future of our Youth, Under Assault: Sault Chamber
The expectation that small business can absorb a 23% increase in minimum wage in a six month period, followed by a further jump to $15 / hour just 12 months later, with no impact on job growth is a clear demonstration that there is an obvious disconnect between the Ontario government and the province’s businesses that create the jobs that drive Ontario’s economy. This is the response of the Sault Ste. Marie Chamber of Commerce (SSMCOC) to the sweeping amendments to Ontario’s Employment Standards Act and Labour Relations Act announced Tuesday by Premier Kathleen Wynne.
“Small business accounts for 98% of all new business formation and over 40% of all jobs in Ontario,” states Paul Johnson, President of the Sault Chamber. “In the last few years, small business has already struggled with skyrocketing hydro costs and the introduction of cap and trade. Regulating small business to assume added costs under the guise of economic-prosperity-for-all is simply not a reasonable expectation.”
In Sault Ste. Marie, these proposed changes could be a death knell for many small businesses in the retail, food-service and tourism industries, which traditionally operate within highly competitive sectors, a challenge that is magnified by the Sault’s proximity to its U.S. competition.
“Unfortunately, the businesses that are going to be hurt the most by the proposals announced today are the primary employers of the very individuals that these proposals are supposed to assist,” says Rory Ring, CEO of the SSMCOC. “These small businesses that are going to be negatively impacted provide youth with work experience to build careers, finance their education and instill the work ethic and socialization that they require as they enter the mainstream workforce.”
The Chamber notes that in addition to jeopardizing the existence of smaller businesses, the proposals will likely incentivize larger corporate businesses to continue to implement new technologies which could remove additional jobs, as a means of offsetting rising costs.
“Chambers of Commerce from across the province along with the Ontario Chamber of Commerce and other industry and business groups have repeatedly called on the Ontario government to ensure that the recommendations of the Ontario Workplace Review are implemented under a cost-benefit analysis process in order to ensure that the changes don’t do more harm than good,” says Ring. “However, it would appear that with this announcement, the Ontario Government intends to push ahead without any regard to the outcome.”
In the Canadian context, researchers have generally found an adverse employment effect of raising minimum wages, especially for young workers. Various studies suggest a 3% – 6% drop in teen and youth employment if the minimum wage is raised by 10%. Today’s proposals represent an increase to the minimum wage almost three times that amount.
While communities like Sault Ste. Marie struggle to keep their youth, these proposed revisions to the minimum wage is adding to a cumulative burden on business that is unacceptable and will likely be counter-productive.
The Sault Ste. Marie Chamber of Commerce has been the voice of the Sault’s Business Community since 1889. Visit ssmcoc.com