Newfoundland and Labrador's minimum wage may have gone up, but it doesn't mean people making it will have more money to spend.

Effective Monday, the wage is up a quarter to $11.40 per hour, and the minimum wage for overtime work is up to $17.10.

But the increase is meant to match fluctuations in Canada's consumer price index, and Newfoundland and Labrador Federation of Labour president Mary Shortall says workers will have the same spending power they did two years ago.

Mary Shortall is the president of the Newfoundland and Labrador Federation of Labour. (Meg Roberts/CBC)

"It's locking in a wage that keeps workers in poverty," she said.

"It's the minimum wage of $11 originally that's actually too low. So we still have thousands of workers who work below the poverty line in the province."

All four Atlantic provinces have harmonized minimum wage increases tied to the price index and set for April 1 annually.

Common Front N.L. has an ongoing campaign to bring the province's minimum wage up to $15.

In the meantime, Newfoundland and Labrador's minimum wage is among the lowest in the country.

Shortall said about 13,000 people are working for that rate in the province.

Most of them, she says, are women over 25 who are working full time.

"It doesn't help our economy at all," Shortall said.

Small business need to 'adjust'

Canadian Federation of Independent Business provincial director Vaughn Hammond says it's good his members can plan for an annual increase, but says they still have to adjust.

"I mean adjust is a euphemism for either increasing prices if they can, or it's reducing hours, or it could even potentially mean that some part-timers may lose their employment," he said.

Hammond said help for people living in poverty needs to come from elsewhere as well.

Vaughn Hammond said any increase in the minimum wage will affect small businesses. (CBC)

"We have to recognize that the government has a role, and it's ultimately government's role to redistribute wealth in the economy, and that's one of the ways they should do it," he said.

Shortall said if people start making more money, they'll start redistributing it themselves.

"If workers are making $15 an hour, and we're seeing this happening in other provinces, you put that money in people's pockets, they spend it in the economy," she said.

"Consumer spending drives our economy."

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