The provincial government is raising the minimum wage and putting a system in place to calculate increases down the road.
Labour Minister Al Hawkins announced that government is raising the minimum wage to $11.15 on April 1, 2018, while the minimum overtime rate will increase to $16.73.
Minister Al Hawkins announcing changes to minimum wage. Will be raised to $11.15 on April 1, 2018. Future raises will be tied to the percent change of the national consumer price index. The minimum wage will not go down if the CPI decreases. @VOCMNEWS pic.twitter.com/eipCtFE9DW
— Meech Kean (@meechkean) February 20, 2018
The increase marks the start of government’s plan to tie minimum wage to changes with the National Consumer Price Index (CPI).
Public consultations last year showed that preferred to see increases linked to the Consumer Price Index and that increases be done each year.
Effective today, the minimum wage will rise each year on April 1 by the same per cent as the consumer price index.
If the CPI decreases over the course of a year, the minimum wage will stay the same.
5.9 per cent of the Newfoundland and Labrador workforce is paid minimum wage.
Read the ‘Indexing Minimum Wage in Newfoundland and Labrador’ summary from May 2017 at this link.
Mixed Reaction to Announcement
There was mixed reaction following the announcement of changes to the minimum wage.
Richard Alexander with the Newfoundland and Labrador Employers Council says it adds certainty for businesses across the province.
He says minimum wage has been a political issue for far too long and groups like his have been asking government to tie minimum wage to an economic indicator like CPI.
The Federation of Labour’s Mary Shorthall isn’t as convinced.
She says tying wage to changes with the cost of living is a good thing, but when the wage is too low to begin with then it’s locking in an unacceptable wage for many years to come.
The Canadian Federation of Independent Business is more concerned that the announcement for a wage increase was for political purposes, rather than a reflection of economic times in this province.
Vaughn Hammond is the Director of Provincial Affairs here in Newfoundland and Labrador.
He says without a legislative change to eliminate the two-year review, there should be no comfort for small business owners that the minimum wage will continue to increase based on inflation.
Hammond says many businesses find it increasingly difficult to earn revenues, and as a result, many will have to pass on the additional cost to consumers, reduce staff hours, layoff employees or delay investments.