CRFA speaks out against unfair minimum wage hikes
The following letter was published in The Windsor Star on Mar. 12, 2010:
Province should rethink the minimum wage rethinkingThere’s an industry in Ontario that employs 400,000 people, creates thousands of spinoff jobs, is one of the biggest buyers of local food products, and is a major tourist draw. It also provides job opportunities for young people looking to gain that all-important first-job experience. And it does this in every community across the province.
Sounds like something our provincial government would want to get behind, doesn’t it?
The industry is the $23-billion restaurant industry. Unfortunately, Ontario’s minimum wage increases are making it tougher and tougher for these businesses to keep their doors open.
Over the past few months, I have been overwhelmed by the number of calls and emails from Ontario restaurant owners who faced an 8.6 per cent wage hike in 2009, and now face an additional 7.9 per cent jump on April 1. What other employer is offering pay increases of that magnitude?
Despite a severe recession which saw many consumers close up our menus and head for the grocery store, the restaurant industry has not asked for subsidies or bail-outs. All we want is a fair shake, and to continue offering good food in a welcoming environment staffed by great employees.
Well-meaning but damaging policies like dramatic minimum wage increases are making this increasingly difficult.
When the minimum wage goes up, the impact is felt well beyond the minimum-wage earners. Restaurant owners often find they must increase the wages and salaries of other employees to ensure fairness and balance. They are reaching a breaking point, and looking to government to step in and revisit this issue.
Here are two strategies that will help Ontario’s 32,500 restaurant operators thrive and create even more jobs:
1. Slow the scheduled increases in minimum wage to be more in line with the marketplace. Employers should not be forced to bear an eight-per-cent increase in minimum wage when the Consumer Price Index (CPI) has only increased 0.3 per cent.
2. Freeze the liquor server and student minimum wage differentials. This would recognize the significant extra income earned by liquor servers and hold wages for students at 2009 levels, promoting youth employment.
In the restaurant industry, most minimum wage earners are younger than 25 and not the family breadwinner. Additionally, minimum wage earners in tipped positions earn income far in excess of the minimum.
Increasing the minimum wage will not mitigate issues of poverty -- it will only cut the number of jobs and hours available to young people looking to build savings and acquire valuable work experience.
Who’s going to fill this job void for the young, inexperienced and unskilled? How will minimum wage earners recoup lost wages -- and tipped earnings -- if operators are forced to reduce their hours?
Ontario’s food service sector is one of the few industries that can support a significant number of important entry-level jobs for women, students and new Canadians. Our industry provides one out of five youth jobs in the province, and we have grown this market share over the past 20 years, adding close to 40,000 young people to our payroll. Here they learn job skills that will benefit them no matter what career path they choose: time management, customer service, problem solving and team work.
Whether for a year or a career, we are uniquely positioned to offer a variety of rewarding jobs and contribute to Ontario’s economic recovery and growth. But these jobs are at risk if wages continue to increase at such an extraordinary pace.
With the tough economy and rapid increases in food, beverage, labour and operating costs, Ontario’s restaurant industry is losing ground compared to other provinces. There are 3,000 fewer restaurants in the province than there were in 2003, putting us below the average for a province this size. If Ontario was on par with other provinces we would have another 4,000 restaurants in operation, creating over 60,000 jobs.
Raising the minimum wage too high, too fast eliminates this possibility. Nor does it improve outcomes for most low-income Ontarians, despite what many proponents may argue.
Research shows that those who experience the worst “disemployment” effects of steep minimum wage increases are the young, inexperienced and unskilled.
Without some new thinking on minimum wage rates, Ontario businesses -- and their employees -- will unfairly end up paying the price. We are counting on the government to take a serious look at this issue and make the right decision.
Stephanie Jones is vice-president Ontario, of the Canadian Restaurant and Foodservices Association.