Minimum wage hike. There are scarcely three words more provoking. Recent and proposed provincial government wage hikes in Alberta, B and Ontario have small businesses worried, frustrated and in some cases downright angry at the burden these increases bring to bear.
Independent restaurants are extra vulnerable. You employ a high proportion of people on the lower end of the pay scale, labour comprises a lot of your fixed costs and you have very thin profit margins.
Raising the minimum wage is a contentious issue. Advocates argue increases are long overdue and give vulnerable workers protection and dignity. They say the practice puts more money in the pockets of those who need it and encourages spending. Critics argue the increases will force businesses to cut back on staff, and lead to higher prices on goods and services for everyone.
One of three things happens to a business when the minimum wage goes up: It absorbs the increase at a loss in the hope that the increased revenue generated will make up for the financial loss. It raises prices and risks losing customers. Or it cuts back on jobs, hours or new hires.
Restaurants Canada predicts high job losses. The association polled members and the results suggest 98 per cent will raise menu prices; 97 per cent will reduce labour hours; 81 per cent will lay off staff; three-quarters will explore labour-saving technology such as self-service touch screens; and one-quarter are likely to close one or more of their locations.
The association is not against increasing the minimum wage but says in Ontario’s case it is going up too quickly. You also may believe in higher wages but feel there must be a more reasonable way to get there. After all, many owner-operators and managers worked your way up from entry-level jobs to be the one signing the paycheques. You understand what it’s like to be earning the minimum wage and the vulnerability that goes with that position.
There is another point of view out there that a fair minimum wage may cause job seekers to take on jobs they may not have wanted and slowly lead to a better level of service. The jury is still out on that, as I know plenty of you offer fair wages already and still struggle to find and keep “the good ones.” Still, forward-thinking businesses are in good company with groups like Better Way Alliance that consider staff assets rather than expenses.
The minimum wage debate has overshadowed other important aspects of Ontario’s proposed legislation – known as the Bill 148, or Fair Wages, Better Jobs Act – that will mean significant changes for small businesses in Ontario and may influence practices in other provinces.
Employees will be entitled to three weeks’ paid vacation after five years of employment. The act will prohibit employers from misclassifying employees as “independent contractors.” And it will invoke scheduling changes: if an employer cancels a shift within 48 hours of its start, affected employees will be entitled to three hours of pay.
However you feel about these issues, as a businessperson, you are forced to deal with their effects on your livelihood.
While we don’t have easy answers, we promise to work with you on strategies for handling changes that are out of your control.
Meanwhile, we wish you a happy and prosperous holiday season.
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