Have you noticed all the outrage going around these days? Minimum wage increase in Ontario, Diversity Statement for Lawyers, #MeToo for many women – there is a lot of outrage and protest and the message is often getting lost in all of the noise.
One topic, as a business lawyer, that I am paying close attention to is the protest around the 21% increase in minimum wage in Ontario that came into effect on January 1, 2018. Most business owners I know, in fact everyone that I have communicated with on this issue, support the increase in minimum wage. What they are opposed to was the slightly over six month’s notice they had about the increase.
If you’re a non-business owner reading this, imagine what you would do if you were told your residential rent or mortgage was increasing by 21% in slightly over six months. That’s hard to plan for in that short term cycle.
The first protest to hit the news cycle about minimum wage was the actions of two Tim Horton’s franchisees in Cobourg, Ontario.
In all the noise around the protest, the following facts seemed to have been forgotten:
1. The only control over cost that this franchisee has his the labour cost and their rent. The franchisee must purchase all of their product from Tim Horton’s parent company at the cost dictated by the parent company. The parent company also sets the prices that the franchisee can charge. This left the franchisee with a 21% increase in cost and no ability to up revenue to pay for it.
2. The franchisee in Cobourg that was demonized over their removal of benefits and refusal to continue to pay for lunches ignored the fact that these employers were providing benefits and paid breaks when they were not required to do so by law. They were a desirable employer because they were treating their employees above the legal minimum.
3. Most of the protests at the franchise locations are by Organized Labour trying to encourage the workers to join their unions. If the employees join the unions, their net pay will be reduced as they will have to pay union dues. Who wins then?
4. Many daycares increased their charges to parents by 21% effective January 1. No one is protesting those daycare centres, nor demonizing them. Why is that?
5. The Ontario Government has told businesses if they cannot absorb this sudden 21% impact in costs, they should shut down.
6. The Ontario Government announced Janaury 19, 2018 they are increasing funding to government agencies struggling due to the minimum wage increase – they’re not suggesting those agencies shut down.
Again. Remember: most businesses support increases in the minimum wage they just want a reasonable amount of time to implement them.
Sometimes valid points, and in this case, hard earned family businesses, get lost in the sound of protest.
Inga B. Andriessen, JD