Too much hypocrisy in wage hike debate
The business of bashing the minimum wage is a blot on the smallbusiness lobby.
Their doomsday tone brings to mind the Rorschach blot test — some business people persist in seeing what they want to see, without seeing the other side. The result is bitter polemics about rising costs, and dire projections about losing jobs.
Consider the double-double hypocrisy of those “rogue” Tim Hortons franchisees whose crude antics — denying paid breaks, scooping up tips — exposed the exploitation in some (though not all) small businesses. And helped to deconstruct one of our most coddled sacred cows.
Turns out that some of those legendary “hard-working” family enterprises are willing to make their harder-working workers pay the price for a wage hike. They see themselves as so victimized by having to pay a living wage that they are blind to the way they victimize vulnerable employees.
Most enlightened entrepreneurs would be mortified by such missteps. They realize human resources must be managed, not manipulated.
But our large corporations are hardly blameless in the badmouthing of the minimum wage, beginning with the brand managers over at Tim Hortons headquarters. Alarmed by the public relations disaster of disaffected local owners taking out their frustrations on their own workers, the corporation castigated them as a “rogue group” whose actions “do not reflect the values of our brand.”
In fact, the Brazil-based corporate owners of the Tim Hortons empire had set the stage for this power play by stubbornly barring franchisees from raising prices — putting the squeeze on them to find savings elsewhere. Which the local restaurateurs did, in their clumsy fashion.
Why not raise prices? Your local doughnut shop is not locked in gladiatorial combat with global competitors that precludes them from raising the price of a Timbit just a bit.
There is no free lunch. Doughnuts and dinners out can and should cost a little more, without Canada losing its competitive edge. It’s not as if Timmies can serve the Toronto market by relocating its business across the border.
Nor is small business somehow under siege.
The cult of small business has so enchanted politicians from all three major parties that they still fall over themselves to dole out favours: The Liberal government cut the smallbusiness tax rate by 22 per cent late last year, plus more subsidies to offset the wage hike; the New Democrats demanded they act sooner; and the Progressive Conservatives promised to cut taxes further if they win power.
The problem with keeping small business tax rates so low is that they encourage business to stay small instead of aiming high. They pay a mere 3.5 per cent on their first $500,000 in income — compared to 8 per cent for small businesses in Quebec and 11.5 per cent for bigger corporations in Ontario.
Despite these tax advantages, the small-business lobby warns that hundreds of thousands of jobs might be lost in the fallout from raising the minimum wage from $11.60 to $14 an hour on Jan. 1 (rising again to $15 next year). Their warnings are echoed by big business, with Canada’s big supermarkets among the first to wade in last year:
“We are flagging a significant set of financial headwinds,” Loblaw CEO Galen G. Weston said of the coming increase, pointedly describing it as “the most significant in recent memory.” That was before his firm fessed up to fixing the price of bread in breach of competition laws, and so Canadians may be forgiven for taking Weston’s yeasty musings on the minimum wage with a giant grain of salt.
He was merely the first of Canada’s business class, big and small, to warn of the price to be paid for helping the working class. Next came the CFIB, then the Chamber of Commerce, then TD Bank, with wildly different warnings ranging from 50,000 to 185,000 jobs at stake in Ontario (a formidable margin of error).
Last week, critics cited a new Bank of Canada report suggesting 60,000 jobs might be lost. But like other studies, the central bank is not predicting layoffs, just that future job creation might be reduced nationwide (one scenario predicts a mere 30,000 jobs foregone — a rounding error in a roaring economy).
Some perspective: This week, the Bank of Canada followed up with its quarterly survey of business sentiment, which found that senior managers expect rising demand — and intense labour shortages as they try to hire more workers — in coming months. Meanwhile, Statistics Canada is reporting the lowest unemployment rate this century, with Ontario leading the downward trend to an impressive 5.7 per cent last month — as close to full employment as this province gets.
Which brings us back to the Rorschach blot test: Is this really the worst of times to raise the minimum wage, or is this not the best possible time to do the right thing?
Some business owners see themselves as so victimized by having to pay a living wage that they are blind to the way they victimize vulnerable employees