It’s not the news that apple producers in Grey and Bruce Counties want to hear.
The minimum wage is going up to by 75 cents an hour in March 2010 to $10.25 from the current rate of $9.50.
By the time the next increase in the minimum wage kicks in — they will have seen their labour costs increase by a whopping 28 per cent over a three year period.
That is the finding of a study conducted by the George Morris Centre,a Guelph-based independent agri-products think tank.
Senior Researcher Al Mussell tells Bayshore Broadcasting News for apple producers and other Ontario growers — that represents an extra increase in their labour costs of 73 million dollars annually once the minimum wage increases are fully implemented.
He says for many apple producers suffering from already low prices, that could be a devastating blow to their income.
Mussell says according to their calculations, a 28 per cent increase in manual labour expenses decreases profitability by almost 50 per cent.
He says not only are apple producers facing low prices for their product, they are also being hit with an unfavourable exchange rate plus competition from apples from the U.S.
Mussell says to offset the wage increase, they recommend the government implement two types of compensation programs — one to offset losses in net income and the other to compensate for lost risk management program eligibility.