$15 minimum wage no surefire winner for Ontario Liberals
Ontario Premier Kathleen Wynne has cut a populist figure thus far in 2018, with the supposed heirs to a doughnut fortune playing the corporate villains. Shortly after New Year’s, when the province’s new $14 minimum hourly wage kicked in, it emerged that Cobourg Tim Hortons franchisees Ron Joyce Jr. and Jeri-Lynn Horton-Joyce — the married son and daughter of chain founders Ron Joyce Sr. and #7 on defence himself — had cancelled a bunch of perks. Notably there would be no more paid breaks, and employees would have to pay 75 per cent of the cost of their benefits.
Employees complained to the media, the media lapped it up, and the premier stormed to the workers’ defence. She implied that Joyce had been lavishly enriched by the sale of Tim Hortons to Burger King in 2014, and accused him of Scrooge-ish behaviour. “Asking minimum wage workers to sign a pledge acknowledging that their breaks will now go unpaid or agreeing to only receive eight hours pay for a nine-hour day is not decent and it’s not fair,” Wynne thundered. “It is the act of a bully.”
Tim Hortons corporate arm, too, denounced the miserly franchisees as a “rogue group” that does “not reflect the values of our brand.” But the Great White North Franchisee Association, a group of Tim’s proprietors constantly at war with their Brazilian corporate overlords at 3G Capital, declared itself “offended that (Wynne) has mischaracterized Jeri Horton-Joyce and Ron Joyce Jr. in this way.” Unlike his father, it said, Ron Jr. has only ever been a franchisee like any other.
The general consensus seems to be it was a disastrous response; the populist fervour only intensified. And this in turn seemed to cement another general consensus: that this is all going very, very well for Wynne and the Liberals.
In the long run, I’m not nearly so sure it’s a guaranteed political winner.
Small business owners are a powerful constituency. (Ask Bill Morneau if you doubt it.) Indeed, not long ago the government was actively trying to mollify their concerns over the minimum wage hike with a tax cut and various other measures. It was therefore rather odd on Monday to see Ontario Labour Minister Kevin Flynn praising Tim Hortons corporate response while continuing to slag off individual franchisees. “Unfortunately,” he told reporters, “it appears some employers are abandoning the spirit of this legislation.”
If the federal Liberals’ experience is any guide, that’s playing with fire: small business owners do not enjoy being described as scofflaws or loophole-jumpers. The corporation Flynn praised is the very one that refuses to let franchisees raise prices to compensate for increased costs (which is one of the “rogue” franchisees’ major grievances). A Tim Hortons location is widely seen as a licence to print money. But many other franchisees and small business owners are facing down exactly the same dilemmas — and the Liberals wouldn’t dare cast mom-and-pop operations as villains.
At 21 per cent overnight, this is a whopper of a minimum wage hike. (There’s another $1 to come on Jan. 1, 2019.) Percentage-wise, and relative to inflation, it’s the biggest since 1969. The last time it went up even 10 per cent overnight was in 1991. Of course that’s what many supporters like about it. But even if Ontario workers as a group end up better off, people will get left behind — and we in the media are going to want to talk to them.
When supermarkets promise to automate checkouts and lay off workers, minimum wage proponents scoff that they were planning to do that anyway — which is of no help whatsoever to a laid-off cashier. Suggesting that employers who can’t afford a living wage shouldn’t be in business in the first place, as Liberal MPP Ann Hogarth did last month, is a great line on Twitter. It’s less great in conversation with one of that business’s employees. In 2015 the average benefit plan for a full-time employee cost about $8,000, according to the Conference Board of Canada. A minimum wage employee would work 400 hours to pay off 75 per cent of that. One Sunset Grill waitress, faced with an increased tip-out, told CBC News she was no better off for the minimum wage increase. She’s an attack ad waiting to happen.
Pretty much all economists agree the employment risks — notably to the young, to immigrants, and to those seeking rather than holding jobs — are greater the faster you raise the minimum wage. Wynne had four years to move boldly but more gradually to $15, and declined. She could have made paid breaks for employees mandatory, and declined. She could have closed any number of “loopholes” the use of which she now decries. And she declined.
Everyone knows what this was: a classic pre-election Liberal dive to the left, knowing that raising the minimum wage is difficult to oppose. But if the unintended consequences continue to pile up, both the New Democrats (who have long supported a $15 minimum wage) and the Conservatives (who support moving more gradually to $15) will have ample room to attack this government not on the minimum wage per se, but on its very weakest flank: its incompetence.