The minimum wage in our province will soon go up $0.65 to $14.15 an hour, the first of two increases in 2023. The second increase for minimum wage earners will come in October when the wage will go up to $15.30 an hour.
The President of the Winkler and District Chamber of Commerce, Hank Froese, says the increases to Manitoba's minimum wage will come as a challenge to some businesses. He says that's especially true for small businesses.
"Especially where entry-level workers are hired, they'll have to increase their prices," said Froese. "Many, such as restaurants and hospitality businesses, just don't have the margins to absorb this cost."
Froese says it makes it harder for employers to increase the pay of staff with more responsibility, such as supervisors and managers. That's in addition to other staff who will likely look for increases in order to keep the current gap between minimum wage and their current wage scale. Froese says this may cause businesses to cut back in other areas, such as benefits and other programs because of the added overhead.
With the region's current labour shortage, Froese was asked whether he feels the increases will entice more people to seek jobs in the market.
"It's hard to say for sure, but it may motivate some to enter the workforce. But, I think we anticipate that increasing the minimum wage alone won't solve the labour shortage issue. Much of the labour force in Manitoba is either exiting or retiring, and the effects, I think, will be felt more by the small businesses versus the labour force. However, on the other side, it could possibly retain some of the younger workers in the area without having them move away for more money, and perhaps improve the standard of living for the minimum wage employees."
Froese expects buyers will notice the effects immediately after the wage increases go into effect on April 1st, and then again in October. He says employers have been planning for this for a while, going back to when the first wage increase hit in October 2022.
Meanwhile, Froese says a program a lot of businesses may not be aware of, is the Manitoba Government's Small Business Minimum Wage Adjustment Program.
The program offers business owners with less than 20 employees a lump sum payment of $0.50 per hour for the business.
Froese says it is a helpful program, however, there are some drawbacks. Although it’s been streamlined from what it was in the Fall, he says it's a long application, and requires a lot of documentation. It's also temporary, with the additional support available for a 6-month period. “And in the end, it will come back to requiring businesses needing to increase their pricing,” added Froese.
Froese says there are some who aren't aware of the program, so they (the Chamber) hasn’t heard much for feedback on the program itself.