Living wage recommendation ‘unrealistic’: CFIB says

A group in Saskatoon is calling on business owners to start paying employees a living wage rather than the government mandated minimum wage.

On Wednesday, a group called Living Wage Saskatoon authored a report calculating how much an average person needs to earn to live healthy and comfortably in Saskatoon.

Using an approach that’s been used in two dozen communities across Canada, the group calculated the living wage for Saskatoon to be $16.77 per hour for an individual working 35 hours per week. That roughly equals a $30,000 annual salary. The report says this wage reflects what an employee actually needs to live in Saskatoon.

That’s a 60 per cent increase to Saskatchewan’s $10.50 an hour minimum wage and the Canadian Federation of Independent Business calls this recommendation unrealistic and unpractical.

“You look right now minimum wage is at $10.50. If you increased it to what this group is proposing, that’s a $320,000 increase in labour costs and that would have devastating effects for a small business,” said Marilyn Braun-Pollon, vice-president of prairie and agri-business with the CFIB.

“The result will be they’ll raise their prices, staff hours would be reduced, it’ll hurt the very people that this group is trying to help.”

She said what the Living Wage Saskatoon report fails to consider is that a majority of employers already offer competitive wages to attract and retain talented individuals.

The Living Wage Saskatoon project is an initiative by the Saskatoon Poverty Reduction Partnership, beside the United Way Saskatoon and Upstream. In its report the groups states that paying employees more up front will lead to a more profitable business in the long-run as employees will be happier, employers will see less sick days being used and they’ll save on costs associated with hiring and training.

Paying low wages has adversely negative affects including greater absenteeism, poor customer service and high turnover.

While the report uses examples like Costco and The Home Depot as businesses which have seen improvement to productivity as a result of paying employees a living wage, the CFIB says small businesses don’t have the resources of the multi-national companies to do that.

Statistics from the CFIB show that for every 10 per cent wage increase, the labour force losses 2,200 jobs. Factoring a 60 per cent wage increase, businesses would lose 13,200 jobs across the province.

“This one-size fits all approach is unrealistic and unpractical and will lead to massive increase in labour costs for retailers and the hospitality sector,” Braun-Pollon said.