March 17, 2011, Vancouver – British Columbia’s fragile restaurant
industry received more bad news yesterday as the provincial government
announced a 28 per cent increase in the province’s general minimum wage
over the next 14 months.
The three scheduled wage increases will cost the restaurant industry an estimated $295 million in additional payroll costs.
Restaurant sales in B.C. have been dropping for three straight years and
the industry has recently been hit with two public policies – HST and
the new drinking and driving penalties – that have resulted in further
lost sales.
“The restaurant industry creates thousands of job opportunities in
communities across the province, but many operators are now stepping on
the brakes,” says Mark von Schellwitz, the Canadian Restaurant and
Foodservices Association (CRFA) vice president for Western Canada.
“Imposing these massive wage increases and eliminating the training wage
at a time when sales are declining and food costs are increasing will
hurt the very people this announcement is intended to help. Restaurant
owners will be forced to cut hours to control their costs and employees
will end up earning less.”
In a press release, the CRFA noted, “British Columbia’s 2009 Throne
Speech stated: ‘Now is not the time to impose hundreds of millions in
new costs on small businesses through an increased minimum wage that
will mean more job losses, will depress job creation and will hurt those
it purports to help.’ This is as true today as it was in 2009.”
The government did listen to recommendations from CRFA and other business groups to implement a gratuity wage differential.
“A gratuity wage will help soften the blow by recognizing the fact that
liquor servers are in fact not minimum wage earners,” says von
Schellwitz. “This new differential will help somewhat to protect the
hours of work and tip income for servers who rely on receiving those
hours to earn their gratuities. However, the licensed restaurant
employers are still faced with a 12.5 per cent increase in server
wages.”
British Columbia’s restaurant industry directly employs more than
160,000 people, including more than 75,000 youth, making it one of the
largest job creators in the province.
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