Minimum wage headed up again

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This article was published 29/09/2009 (5878 days ago), so information in it may no longer be current.

THE second minimum-wage hike of the year will force many restaurants, bars and retailers to raise their prices and cut back the hours their staff works after it kicks in on Thursday, opponents warn.

Servers, busboys, bartenders and sales staff will earn another quarter per hour effective Oct. 1, their second 25-cent raise of the year, bringing their hourly earnings up to $9.

While that might seem miniscule to outsiders, the 50 cents represent a nearly six per cent jump in the biggest annual expense for many businesses.

Doug Stephen, president and CEO of WOW! Hospitality Concepts, which operates seven eateries in Winnipeg, including the Muddy Waters Smokehouse, Dacquisto and Oui Bistro & Wine Bar, said resetting the minimum wage comes at a difficult time for many restaurateurs as the economic downturn has already cut into their business by prompting many customers to stay at home more often than they’d like to.

"It’s a double whammy. The only thing that we can do is try to manage our menu pricing and to optimize the productivity of our employees," he said, noting he has about 300 people on staff making minimum wage.

Stephen said he has long been in favour of a two-tiered minimum-wage system where tip-earners would make less per hour — say 75 cents less — than their non-tip-earning counterparts.

He said such a system is currently in place in a number of U.S. states as well as Quebec and Ontario. In such a scenario, servers have to sign off at the end of every shift that their tips at least compensated for the shortfall in their wage rate.

Even companies that pay more than minimum wage are impacted by Thursday’s change. Bruce Chwartacki, president of Domo Gasoline, said it already pays its gas jockeys $9 per hour — some locations pay $10 per hour — but it will add a quarter to their hourly earnings as of Thursday.

Unlike restaurants and bars, however, Domo can’t compensate for higher wage costs by raising gas prices.

"We’re a price-follower, we can’t really influence it. We follow what is set in the market (by the major retailers)," he said.

Domo can, however, entice its customers with deals on "dash" items, such as drinks and chocolate bars.

"We try to encourage sales that way but it doesn’t make up for the increase in the wages," he said.

Nancy Allan, labour and immigration minister, said the province estimates the wage increase will benefit about 28,000 Manitobans.

She said the government typically raises the minimum wage annually on April 1 but decided to stagger the increase this year due to concerns with the economic downturn.

"We believe we’ve taken a balanced approach. We’ve also reduced the small business tax rate and it will be totally eliminated by 2010," she said.

Even though it’s only a quarter per hour, Neil Cohen, executive director of the Community Unemployed Help Centre, a non-profit community-based organization that deals with employment insurance matters, said the increase is certainly welcome.

"It’s never as much as we’d want but we’re pleased to see there have been fairly regular increases to minimum wage in recent years," he said.

Cohen said there is an "excessive" number of working poor who simply can’t make ends meet on minimum-wage jobs, most of which do not receive tips and are forced to rely on food banks for meals.

Dave Angus, president and CEO of the Winnipeg Chamber of Commerce, said his organization isn’t against minimum-wage increases per se but he’d like to see them tied to various metrics, such as the cost of living or minimum-wage hikes in other provinces, rather than regular increases mandated by the government.

"There’s nothing very scientific about minimum-wage policy," he said.

Allan said future minimum-wage increases will be examined by the Labour Management Review Committee, which will have representation from both labour and management. She said the board will consider basing minimum-wage changes on other factors and it will also look at the experience of other jurisdictions. Saskatchewan and Nova Scotia, for example, base their minimum-wage changes on the consumer price index.

geoff.kirbyson@freepress.mb.ca