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Service industry supports minimum wage price differential

Last Updated Mar 24, 2019 at 11:02 am MDT

Summary

Restaurants Canada, Alberta Hotel and Lodging Association are for a minimum wage differential for youth

Leaders in the service industry believe an entry-level wage is needed for youth workers

The number of youth employees has decreased since minimum was increased to $15 an hour

CALGARY (660 NEWS) – In the 2015 provincial election, the New Democratic Party (NDP) campaigned on the promise to increase Alberta’s minimum wage to $15 an hour.

On Oct. 1, 2018, the provincial government made that campaign promise a reality and received backlash from the service industry.

READ MORE: Mixed reactions to Alberta’s minimum wage hike

Since Premiere Rachel Notley called the Provincial election the United Conservative Party (UCP) has come out and said that if they are voted into power, then they will institute a price differential for those under the age of 18.

President and CEO of the Alberta Hotel and Lodging Association Dave Kaiser told 660 NEWS that the minimum wage is a sort of deterrent for businesses to hire young employees, because companies do not see the same outcome from their investment.

“At the end of the day in business with margins tight, whatever your payout in wages and benefits, you need to be able to get the investment back in productivity,” Kaiser said.

He said that it makes sense for there to be a different minimum wage for youth because most are living at home without needing to support themselves.

“They would benefit by having access to just part-time work, to have some spending money, and more importantly build those skills to help with their career in the future.”

Restaurants Canada’s Vice President of Western Canada Mark von Schellwitz agrees with Kaiser’s statements on the issue, adding that one of the most alarming things to him is how youth participation in the workforce has come down to some of the lowest levels in history.

READ MORE: Labour leaders welcome Alberta minimum wage increase

“What this means is that those under the age of 18 are so discouraged they aren’t even looking for jobs,” Schellwitz said.

He explains that more money is put into training youth in the restaurant industry because they need more assistance and guidance from more experienced employees as they start their career.

“What happens with restaurants in an employment declining situation, they are going to hold onto their most experienced staff first, and there isn’t that same incentive to bring in fresh new people.”

Schellwitz believes that putting in a differential for minimum wage also makes sense because it is a common practice in other provinces across the countries and other countries around the world.

“A lot of trades and even union agreements in Alberta already have apprenticeship training wages, that say while you are in that training mode we are going to be paying you slightly less,” Schellwitz said. “The understanding is once you gain more experience and have the same amount of knowledge as your colleagues then you will make the same.”

Both Keiser and Schellwitz are open to seeing what all the political parties bring to the table when it comes to this issue, but at the moment both believe that a pay differential is the best option.

“Our position on this is to encourage a wage differential for young or inexperienced workers, so if the UCP wants to move forward with that then we would be very supportive of it,” Kaiser said.