As a small business owner in America, I can attest to the worry that a major jump in the minimum wage may make it harder to hire and retain talented individuals in the future. While I do believe the minimum should be hire then it is now, I also believe that there is a breaking point where a minimum wage that is too high will lead to alot of small businesses closing their doors. In Ontario Canada, on January 1st, 2018, the minimum wage increased by 20.7 percent to $14 an hour and included “other workplace requirements around scheduling, equal pay and vacation time.” I understand that this may seem like a win / win for everyone involved, but the challenge for many small businesses involves maintaining profitability while dealing with rising costs.
One point that many people may not consider are the people making close to minimum wage before the increase. If you’re making $15 an hour and the minimum has now jumped to close to your pay, many owners are now feeling pressured to increase their pay as well. The 20% jump doesn’t just affect lower paid employees, but almost the entire workforce. According to The Globe and Mail, “some small-business owners say the increase in costs leaves them little choice but to raise prices to the consumer. Business owners also say they may have to cut hours or reduce staff to compensate for increased labour expenses.”