Research: Business lobby arguments against minimum-wage increases

Last week, I shared some preliminary research exploring the narratives and discursive strategies used by opposition MLAs to oppose a minimum-wage increase. This week I’d like to share a preliminary analysis of 17 statements made by the Canadian Federation of Independent Business (CFIB).

I chose the CFIB because it represents approximately 10,000 small-business owners in Alberta, has consistently opposed minimum-wage increases, and had an available record of statements I could analyze. CFIB spokespersons advanced a consistent narrative about increasing the minimum wage, asserting that raising the minimum wage:

1. was opposed by employers,
2. would cost jobs, particularly among teenagers,
3. was not supported by adequate evidence about its effect, and
4. was not an effective poverty reduction strategy. 

CFIB spokespersons employed three main discursive strategies in which these narratives appeared. The CFIB theoretically rationalized its opposition to minimum-wage increases by citing job-loss projections it developed:

In the case of Alberta’s massive hike in the minimum wage rate from $10,20 to $15.00 (47 per cent increase) by 2018, this would put 51,700 to 200,690 jobs at risk in Alberta (Wong, 2015a, p. 1).

These projected job losses included both layoffs and foregone future hiring. These projections ultimately proved wildly inaccurate but were contrasted with the limited economic analyses that the government publicly provided:

Premier Notley stated that her aggressive minimum wage policy won’t kill jobs. Then show us the evidence (Ruddy, 2016, p. 1)

The CFIB also used its projections to assert minimum-wage increases were not effective poverty-reduction tools:

CFIB’s calculations show that minimum wage increases are not the best way to increase low income earners’ well being (Wong, 2015b, p. 2).

This assertion sits uneasily with the CFIB’s projections in the same report, which show the net income of workers in every provinces rose with a minimum wage increase.

The CFIB used public authorization in two ways in an effort for increase the salience of its views. First, the CFIB frames itself as speaking on behalf of small business owners, despite representing on about 10% of such businesses (CFIB, 2018). Second, it used surveys of its memberships to support its demands. These surveys also act as a cautionary tale about the impact of the minimum wage increase. The most common narrative associated with surveys is that minimum-age increases cost jobs:

A CFIB survey of 1040 Alberta business owners asked: Which of the following changes has your business already made as Alberta moves to a $15 an hour minimum wage? 55 percent have reduced to eliminated plans to hire new workers, 52 per cent have reduced of eliminated plans to hire young workers, 46 per cent raised prices, 43 per cent reduced overall staffing hours, ad 42 per cent have reduced the number of employees, to name just a few of the implications (Ruddy, 2018, p. 1).

Opposition MLAs and the CFIB both used similar narratives about minimum wage increases (e.g., job killer opposed by employers and ineffective at reducing poverty) and similar discursive strategies (theoretical rationalization, cautionary tales). The small number of statements in the dataset suggest that this analysis should be treated with caution.

Next week, we’ll conclude this series by looking at organized labour’s contribution to the minimum-wage debate.

-- Bob Barnetson