Yukon's minimum wage is set to go up by a dollar in April — and according to the Yukon Chamber of Commerce, that will put the territory close to an economic "danger zone."

The minimum wage is adjusted every year in Yukon relative to the Consumer Price Index. This year's standard two per cent increase will be coupled with an additional 75 cents per hour, to $13.71 starting on April 1.

Peter Turner, president of the Yukon Chamber of Commerce, said that's a concern for small business owners. He referred to an economic study done recently by the Yukon government that referred to a minimum wage "danger zone."

"When a minimum wage exceeds more than 45 per cent of an average wage [for a jurisdiction], they start to see negative impacts on the economy — people scaling back on the hours of operation, reducing the number of employees that they have in their organization, looking for automation solutions," Turner said.

"And that's where we don't want to go."

Turner says there are relatively few minimum wage workers in Yukon. Unemployment is low, and so many employers are offering slightly higher salaries to attract workers.

The latest minimum wage hike could take Yukon 'where we don't want to go,' said Peter Turner of the Yukon Chamber of Commerce. (CBC)

But Turner says boosting the minimum wage has an impact beyond the lowest-paid workers.

"The real concern has to do with the fact when you raise the minimum wage to serve the bottom level of wage tiers, you then have to increase all of the wage tiers above that," he said.

If we're talking about anti-poverty measures, that's an entirely different thing. - Peter Turner, Yukon Chamber of Commerce president

"So it's really the impact of all the tiers above minimum wage that are impactful for employers."

More than $15 by 2021, board recommends

The increase was recommended by the territory's Employment Standards Board. The board was asked by the government in 2018 to review the minimum wage and make recommendations.

In its report, the board recommended annual increases to bring the minimum wage above $15 by 2021.

In a news release last week announcing the latest wage hike, Community Services Minister John Streicker said the new minimum wage "will support workers who need it most while ensuring that Yukon businesses can continue to attract and retain workers in a tight labour market."

Turner maintains that it's not needed — nor is it an effective way to address poverty.

"Most employers are already offering, you know, anywhere from two to three dollars more per hour just as a starting salary because the market requires it. And so I think we're addressing a lot of it there," he said.

"If we're talking about anti-poverty measures, that's an entirely different thing and that should be borne by our entire society — not just uniquely by small businesses who employ people."