Liberals get earful about minimum wage hike
Proposed $15-per-hour minimum wage upsets businesses facing higher payrolls
The Ontario Liberals will look for ways to help small businesses cope with plans to increase the province’s minimum wage to $15 an hour, Ottawa South MPP John Fraser said Wednesday, but the party’s not retreating from the idea.
Premier Kathleen Wynne and Labour Minister Kevin Flynn announced the plan at the end of May: The $11.40 minimum wage will rise to $14 in January 2018 and then $15 at the start of 2019, as part of a package of labourmarket reforms the Liberals are pushing to help low-paid workers with little job security or control over their working conditions. Now the Queen’s Park committee studying the legislation is touring the province and it hit Ottawa Wednesday, hearing from witnesses in a basement conference room of the Courtyard Marriott hotel in the By Ward Market.
And whoa, do small-business owners, in particular, have a lot to tell them.
Tracey Black, the owner of Epicuria catering on St. Laurent Boulevard, said her 32-worker company will have to cut hours, reduce bonuses and perks and cut back on things like community sponsorships and donations, she said.
“We’ll try to create more efficiencies. I’ll also reorganize our employee structure,” Black said, so that her lowest-level employees do more work to justify the increased expense of having them.
Her toehold in the food business was making sandwiches part-time and she’s worried she won’t be able to give new workers their first jobs because $15 an hour for a raw young hire is just too much to pay.
“The consequences to all of us (are) disastrous,” said Paul Murphy, the owner of Calabogie Peaks ski resort. Renfrew County has higher unemployment and lower wages than most places in the province, his resort competes against ski hills in Quebec that are closer to Ottawa-Gatineau and charge less for a lift ticket, and paying his large but lowwage workforce up to 31 per cent more will devastate his finances, he said. In a decent year, the resort clears about $500,000 in operating profits but spends much of that on improvements to its facilities.
The government-ordered wage hikes will eat up the free cash, Murphy said, and the crossborder competition will keep Calabogie from raising its prices to compensate.
“Do you think anybody’s want to go ski at Calabogie? No! Ontarians are going to want to ski in Quebec because it’s cheaper,” he said.
He expects to lay off 15 per cent of his workforce and cut hours for most of the rest, he said. Even so the business will be at risk.
“This idea that it’s a minimum-wage increase is baloney. Everybody at my company is going to want a raise. Do you think anybody who’s making a little more than minimum wage is going to be saying, ‘Oh, that’s wonderful, they got a minimumwage increase?’ They’re going to be in my office saying, ‘I want my $3.60, Paul, I’ve been here a long time.’ Let’s not kid ourselves. You have just pushed the wage curve up in Ontario dramatically,” Murphy told the MPPs.
He meant it as a warning. A lot of Liberals will hear it differently as they prepare to run in next year’s election as champions of social justice.
Yes, hiking the minimum wage will be disruptive. It might even kill some marginal businesses. But, the argument goes, it’ll put more money in many workers’ pockets, which they’ll spend, and that’ll be good for the economy. Having just pushed the wage curve up in Ontario dramatically is an allegation the Liberals will be happy to pin to themselves.
Fraser did say he and his caucus mates are learning, through these meetings across the province, about some of the ways particular industries expect to be affected by the government legislation, which could lead to tweaks in the law or separate moves to ease the pressure. The first $450,000 of a business’s payroll is exempt from a provincial health-care tax on employers, for instance — maybe that could be expanded.
“We’re still gathering the ideas but we’re hearing a lot,” Fraser said. He hopes to find ways for employers (through slightly lower profits), consumers (through slightly higher prices) and the government (by enriching some programs or forgoing some taxes) to share the costs.
The Liberals want a higher minimum wage because they’ve savaged low-income people’s finances through taxes and hydro fees, Nepean-Carleton MPP Lisa MacLeod proposed, and are trying to make up for it at employers’ expense now.
“We’re all here for workers,” said Renfrew-Nipissing-Pembroke Tory John Yakabuski, agreeing with MacLeod. “But if an employer can’t provide a job because they’ve been priced out of business, that’s not good for workers.”
His neighbour, Lanark-Frontenac-Lennox and Addington’s Randy Hillier, took a similar tack, arguing that the Liberals are covertly changing the premise of the minimum wage from an acceptable floor for entry-level workers to an income that can support a worker through a lifetime. (This is ahistorical: modern minimum wages began as a response to low pay in early industrial sweatshops that mostly employed women and children, but not in “foot-in-the-door”-type jobs.)
If we insist on increasing minimum wages, he said, we should include measures to increase economic productivity to make sure we’re collectively getting richer, not just pushing the same dollars in different directions.
“That’s the other side of this coin,” Hillier said. “It’s very shiny but I’m not sure it’s going to get us what we want.”