Earlier this week, Premier Doug Ford announced an increase to the minimum wage to $15 an hour, including for liquor servers who receive tips. Here is some of the reaction in Oakville.
Chamber of Commerce Reaction:
"The last couple of years have highlighted the need, and this change to the minimum wage was important," says Drew Redden, president of the Oakville Chamber of Commerce. However, he expressed the concern that the announcement was made without much notice and without consultation with business. Particularly for hospitality businesses, a 20 per cent increase to be implemented in less than 60 days will present a challenge.
When Oakville News pointed out that the Ontario Living Wage Network has pegged a living hourly wage in Halton at $20.75, second only to Toronto at $22.00, Redden emphasized that the Chamber recognizes the high cost of living in Oakville. Citing a very challenging market for labour, he pointed out that local businesses are being creative and aggressive in attracting employees and that in many cases the minimum wage is not a factor.
Redden also suggested that minimum wage is not the only tool the government has to address income requirements. "Business needs to be a partner in these discussions, and other options should also be on the table, such as minimum income pilots."
Acknowledging that minimum wage affects all businesses and thus is a level playing field for competition, Redden pointed out that many Oakville companies compete with businesses outside our jurisdiction, the province, or Canada. Cost structures are important in that context, he emphasized, and so other tools should also be evaluated along with the minimum wage.
From a Restauranteur:
Angelo Triant, co-owner of the King's Arms, a popular casual downtown Oakville pub and restaurant, feels there will be a number of unintended consequences to the move.
"This is the first time in Ontario history that servers are paid the same as other minimum wage workers," says Triant, "and outside of students, they are one of the few groups to actually be paid at the minimum. In their case, it's because of the tips. It's the tips that attract them to the job, not the base pay. Why the government would make a change like this on the heels of the damage caused by the pandemic is beyond me."
Servers are hard to come by in the current climate, he points out, because of the uncertainty of hours brought about by the constant changes in policy towards hospitality businesses.
According to Triant, the public has responded to the hardships of the industry by tipping generously, and even in normal times, servers choose their employment on the basis of the tip potential, rather than the base wage. But the public can't absorb unlimited amounts of cost increases and the industry has faced many in the past few months, from lost business to a 30 per cent increase in the price of oil, as just one example.
He sees two probable consequences: people will go out less, favouring staying in and benefitting the meal kit industry and supermarkets, both of which have done well in the pandemic; or they will cut back on tipping significantly, knowing wages are up, which will hurt staff more than the minimum wage increase and will make hiring staff even more problematic than it is now.
"Many have left the industry permanently, and found new jobs," says Triant. If tips go down to an average of 15 per cent or less, he calculates, once shared with kitchen workers, bussing staff and greeters, the amount left can only make attracting servers even more difficult.
"Our industry, along with gyms and other businesses closed for public health reasons, is in dire straits. This decision really kicks us when we are down. Many of our long-time customers are already hesitant to return regardless of vaccination status, and we either pass the cost on and lose more business, or absorb it and have less margin."
What the Changes Mean:
Under the proposed changes, the special minimum wage rate for liquor servers who also receive tips would be eliminated and they would be entitled to the general minimum wage.
Special minimum wage rates are also proposed to increase:
- Students under the age of 18 who work 28 hours a week or less when school is in session, or work during a school break or summer holidays would see an increase from $13.50 to $14.10 an hour.
- Homeworkers (those who do paid work out of their own homes for employers) would see an increase from $15.80 an hour to $16.50 an hour.
- Hunting and fishing guides currently have a minimum rate of $71.75 for working less than five consecutive hours in a day, and $143.55 for working five or more hours in a day. Their new proposed rate would be $75.00 for working less than five consecutive hours in a day, and $150.05 for working five or more hours in a day.