‘If you can’t afford to pay a living wage, you can’t afford to be in business.’ ~ Dale Peacock

13
Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someonePrint this page

Every time talk turns to an increase in minimum wage, dire warnings abound about the imminent death of business. But, to paraphrase Mark Twain’s famous quip, the report of the death of business is greatly exaggerated. Three years ago when a tiny increase was made in the minimum wage after five years of being static, the Ontario Chamber of Commerce reacted in horror and pronounced business’ demise. Here we are in 2017 and businesses are still doing business.

Ontario labour laws are way out of date. In addition to raising its minimum wage, the plan is to legislate more predictable work hours, improve sick leave and vacation requirements. The nature of work in Ontario has shifted and that needs to be reflected in the workplace.

There are lots of reasons that businesses fail: failure to understand the market; inadequate financing; poor management. Rarely does one see ‘paying staff a humane wage’ as one of those reasons for business failure.

Of course businesses dislike price increases. Who likes to pay more for anything? Small businesses don’t work if they have everything else but lack a fairly compensated employee base. We should not begrudge employees for wanting to achieve more financially. Those who see their compensation as unfair or exploitative cost businesses more in the long run due to poor morale and a decrease in productivity. An increase in the minimum wage is bestowed upon businesses across the board so the playing field remains level.

If you can’t afford to pay a living wage, you can’t afford to be in business. Asking people to work for poverty wages is the height of entitlement. You are using others to subsidize your dream of having a business. Yes, you are the one taking the risk but when your business thrives, thanks to help from your employees, you’ll be comfortably off and they may still be working for you. And no…you didn’t do it on your own.

Elizabeth Warren made this point: “There is nobody in this country who got rich on his own — nobody. You built a factory out there? Good for you. But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police-forces and fire-forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory — and hire someone to protect against this — because of the work the rest of us did. Now look, you built a factory and it turned into something terrific, or a great idea. God bless — keep a big hunk of it. But part of the underlying social contract is, you take a hunk of that and pay forward for the next kid who comes along.”

I respect small business. Our two children and their spouses are all hard-working small business owners. I know a dozen business owners here in town who already pay more than minimum wage. And there are a few who pay a living wage. Some do it simply because they believe it’s the right thing to do but they all think it’s also good business. For anyone who is already compensating staff above minimum wage, the increase will have little impact in the short term. Will other staff then need to be bumped up, too? Probably. But, the further you get from minimum wage the less the adjustment needs to be.

I looked at kijiji apartment rentals before I started this opinion piece. What was notable was that the majority of rents being advertised was between $1,000 and $1,350 per month. The majority of those looking for apartments hope to find something between $700 and $900 a month. Those who are working precarious jobs with fewer than 40 hours a week could easily spend between two-thirds to three-quarters of their income on rent.

Poverty is a public health issue. Poverty and poor health are inextricably linked. The causes of poor health are rooted in political, social and economic injustices. Poverty is both a cause and a consequence of poor health. Poverty increases the chances of poor health. Poor health in turn traps families in poverty. And make no mistake, even at $15 an hour people are still going to be poor. Sixty percent of low-wage earners are women, so the increase will also help to close the wage gender gap. When women win, so do families.

Expert opinions and conflicting research exists on either side of the minimum wage debate. But there are some facts which are pretty irrefutable: just 20 years ago, one in 40 Ontario workers made minimum wage. Today that number is one in eight. That’s a boatload of working poor here in one of the largest and richest provinces. Large corporations are good at making a profit. It’s mind boggling that we can be outraged by the audacity of working poor wanting a bit more and just gloss over the fact that the ratio of CEO-to-worker-pay has increased 1,000 per cent since 1950.

In a new study from the Canadian Centre for Policy Alternatives, they found that low-paid jobs were increasing at a pace three times that of overall growth. At a time when the number of jobs grew at 30 per cent, the number of low-wage jobs grew 94 per cent. And poorer working conditions comes right along with low-paid jobs.

The report also dispels the myth that minimum-wage workers are mostly teenagers who still live at home and use their money for personal luxuries. Fully one-third of low wage earners are in their prime earning years of 25 to 54, while almost nine per cent are over 55. The remaining 57 per cent are under 25.

Higher minimum wages are often cited as being particularly hard on young people who need the experience of working minimum-wage jobs. But in places with a higher minimum wage, like Scandinavian countries, the Netherlands, Australia and New Zealand, the minimum wage had no effect on unemployment.

Some businesses will warn that if their payrolls increase, prices will follow, and then there will be corresponding inflation requiring even higher wages and so on and so on. History both past and recent demonstrates that this is not the case. In Minnesota the governor raised the minimum wage and taxed the high-income earners more. Instead of increasing unemployment the exact opposite happened. The state went from the 32nd fastest growing state, to the fifth, and boasts the highest economic confidence of all the US. He turned a $6.2 billion deficit into a $1 billion surplus over the course of four years.

I think it was Donald Trump who said during the U.S. presidential campaign, “We can’t raise the minimum wage if we are going to remain competitive.” That is pure bull***t. Minimum-wage workers aren’t even involved in the export sector of industry. Paying cleaners, servers, cooks, retail-sales people more has nothing to do with competing with the rest of the world.

The vitriol that is being heaped on Kathleen Wynne is mostly undeserved. I’m fairly sure that her intent is not to shut down business. I have a feeling….and some of you are going to guffaw at this….that at the end of the day history may remember Ms. Wynne as an effective, compassionate premier who did incredibly difficult things to provide a little bit of dignity and security for people who have no power themselves.

For the cynics, yes, an election is looming. BUT the economy is booming, too. So if not now, when?

Don’t miss out on Doppler! Sign up for our free newsletter here.

Following a career in the hospitality sector and the acquisition of a law and justice degree in her 50s, Dale embarked on a writing career armed with the fanciful idea that a living could be made as a freelancer.  To her own great surprise she was right.  The proof lies in hundreds of published works on almost any topic but favourites include travel, humour & satire, feature writing, environment, politics and entrepreneurship. Having re-invented herself half a dozen times, Dale doesn’t rule anything out.  Her time is divided equally between Muskoka and Tampa Bay with Jim, her husband of 8 years and partner of 32 years. Two grown ‘kids’ and their spouses receive double doses of love and attention when she’s at home. 

print

13 Comments

  1. Dale, good article

    I think the focus of so much of the rhetoric is placed in the wrong place, “It will drive me out of business.” That’s bogus. If the local McDonald’s has to pay higher wages so will the Burger King. If Sobeys does so will Metro. They will raise their prices and all will be equal. The companies never pay the price just the consumer. Now the bigger question is ”are we as consumers/the public, willing to pay the price of a living wage”, or do we want to have a source of cheap labour to maintain our life style.

    Yes for the companies who are competing with international competitors will be affected but most of them have already moved their labour intensive operations to Mexico, India or Bangladesh.

    The effect of both foreign competition and technology has reduced the number of well paying factory jobs and more of the shrinking middle class has been moved into the lower class. The retail, hospitality and service industry used to be the privy of the students and first time workers but now the income from those jobs minimum wage jobs is necessary for the well being of many families.

    Today, our neighbours to the south do feel like “cheap labour” is the right of people but I hope we as Canadians are better than that.

    It was an American, Henry Ford whose goal was to build a car at a price so his workers could afford to buy one. Where did we loose that vision?

  2. I was a small business owner, so I know where they are coming from. My big question is..
    AS A SENIOR, WHERE IS MY PAY RAISE?

    We do make less than $10.00 an hour and we have paid our dues.

    Ellen Duncan

    • Paul Whillans on

      Madam: I myself am a senior and quite frankly I am ashamed of my generation who created this national sense of entitlement. We grew up in a world that was economically booming after the war. This happened with or without our generations help. You madam have paid no dues which entitle you to take hope from the poor.

      You couldn’t just say “Excellent points Ms Peacock”… You had to ask what’s in it for you?

  3. Brian Tapley on

    Doug Smith is not completely correct in his analogy regarding MacDonalds, Burger King Sobeys and Metro.
    You will note that MacDonalds, for one has opted to eliminate some jobs with the self ordering kiosks. Others will follow. Home Depot has self check out.. more people not employed at all….. There is a cost to have a live body in a workplace and if that cost exceeds a certain amount, then the live body will be replaced with a suitable kiosk, computer or robot. Take a look at a picture of the new Tesla plant and one thing will strike you. There are no visible people working.. all robots in the body building department.
    There are social issues to be sure but a robot nowadays can be quite versatile, works 24/7, takes no holidays and needs no retirement plan or health care. It is not just the “wage” that adds up.

    Closer to home in my industry, Tourism, our competition is not the next door resort which is what if would be if Mr. Smith’s analogy was correct. No, our competition is places like the Caribbean, a cruise, or some such holiday. In many of these cases the wage paid is much below any minimum wage in Canada. Also, in many destination countries the pension, health, unemployment fees and even the cost to be properly trained for safety is close to non-existent. When the potential customer sits in the GTA and looks at their tablet we are competing with these type of accommodators.
    Not only that but the airlines that enable these cheap package tours are effectively subsidized, in some cases quite extremely by their governments in the form of fuel prices being depressed from their true costs.
    An example, although not from the airline industry per se is one that concerns the trucking industry. On Tue night TVO had a program called “to the ends of the earth”. In it researchers (among many other eye opening topics) tried to put a “real” cost on those trucks that bring us everything in North America. Well guess what? It is not just the fuel. No, not even the fuel, driver’s wage, and truck maintenance! No, when you factor in all the costs, the use of roads, the pollution from use, building and recycling a truck and so on, it turns out that their best estimate of running a truck is about 35 times the fuel cost. Think on this the next time you complain about paying a dollar a litre at the pump.
    The point of all this rant? Well minimum wages are indeed a factor, just one of many but they all add up. If the person in the paper mill making the napkins gets a raise, and the warehouse guy, and the retailer and the trucker and the builder who built the warehouse and do on it goes… that minimum increase will multiply into a maybe much larger factor than we expected. True, most of us can pay more and we will but at some point the well starts to run dry. I guess all I am saying is to beware the full effect.

  4. The highest hydro rates in North America back to back with the highest wage hike in the history of this province…pointing fingers at small business owners for the cost of living is so short sighted. No, business didn’t fade away when they​ raised it last time, but that was before our hydro rates climbed exponentially and it was no where near the 30% that this one is. The cost of living in this province is the issue here….I, as a small business owner am not whats wrong with this province. Leland industries, Cascades, protor and gamble….big industry is leaving because they can, and small business will absolutely be affected. Small grocery store in eniskillen facing a 94000 dollar labour increase. They need to generate 300,000 in extra revenue to cover it, on the same labour hours, how do they do that? Do you think they are entitled to a salary? Are they entitled to a fair shot at success? You want to fix people’s standard of living , don’t saddle that responsiblity on the backs of business, it’s time our government is held accountable . My direct competition is Haagen Daz…do you think they will be affected by this hike? They probably generate thousands of units per shift on a few staff. How do I compete? I will need to raise my prices, they wont. Quit with this ‘you do t have the right to be in business’ crap and place blame in the right place.

  5. mike marlow on

    as a minimum wage earner I applaud the raise , I love the extra money the problem is everything else raises with it , my rent , my hydro , my gas , my water , STOP raising minimum wage and start controlling hydro especially ! , I can afford to live but can when this crap happens and ill just be another able body person on welfare

  6. When I began my working life minimum wage was $2 per hour. I could get a burger,fries and coffee for a dollar. Now minimum wage is 11.40 and I can’t even get a coffee for a dollar.
    It’s like the thought that this huge rise in wages will quickly make its way down the chain has been lost on those who already make more than minimum. It won’t take long before $15 won’t be enough. Mean while businesses will be paying more in cpp, ei,wsib and vacation pay. Employees too will be paying more in deductions and taxes. Business will have to recoup the cost some how and everyone pays more. The thought that the 15 year old that can’t even get my take away order right , who can’t even make change for a dollar will make 15 dollars an hour gives me chills.

    If they want to make real change,raise the taxable income level to a reasonable level.

  7. Excellent article Dale. I thoroughly enjoy your well researched writing and I am glad you are finding a way to create a living from it. We are all the richer for it.

  8. Consider that increasing the minimum wage dramatically is another Wynne strategy to gain votes, not a personal concern for low wage earners and or a concern for small businesses that already are finding Ontario a most difficult or impossible location in which to operate.
    This report from the Fraser Institute highlights the difficulties small businesses face in doing business in Ontario-

    -a lack of confidence in Ontario’s economy given the total fiscal mismanagement by the Wynne government and the Liberal governments before her
    -pandering for votes with unwarranted, damaging financial give aways of tax payers’ dollars
    -lowering hydro rates at tax payers’ cost and imposing even higher costs for the future
    -high, uncompetitive tax rates
    -endless permit requirements

    The province of Ontario’s policies are forcing many businesses to leave Ontario. Small businesses are crucial to the economic well being of this province.

    Fraser Forum
    In Ontario, the cost of doing business is high

    — May 30, 2017

    Jon Dwyer, the managing director of an Ontario-based bio-tech company, recently took to the CBC to express his concern that doing business in Ontario was becoming increasingly difficult. In his column, Dwyer states that rising energy costs, uncompetitive tax rates and other obstacles to prosperity are forcing business owners like him to seriously consider leaving the province—a fate the government should urgently try to avoid.

    Dwyer isn’t alone in his concerns. In fact, much of the Ontario business community seems to share his anxieties. The Ontario Chamber of Commerce’s 2017 Ontario Economic Report showed widespread concern about the state of the provincial economy among business owners. Its survey revealed that only 24 per cent of OCC members were confident in Ontario’s economic outlook. Business owners across the province shared Dwyer’s concern over the rising costs of electricity, with more than half citing it as one of their top three policy concerns.

    And given some of the policy decisions of the current government, concern within the business community seems reasonable. When it comes to rising electricity prices, the province’s response may bring some temporary relief but will impose significant costs on future generations.

    The Fair Hydro Plan will reduce hydro bills by an average of 25 per cent in the near future, but only by adding billions to the province’s already daunting debt load, and transferring some costs from Ontario ratepayers today to ratepayers and taxpayers in the future. Simply put, the cost of this decision will be borne by future generations of Ontarians.

    The province’s high electricity prices and tax rates are increasing the cost of doing business in Ontario. What’s more, the province’s large public debt burden discourages new investment in Ontario by generating policy uncertainty about the future, as it raises the spectre of future tax increases (or still more borrowing from the future) to service that debt.

    Making matters worse, the government’s passive, slow and risky plan to very gradually reduce Ontario’s debt-to-GDP ratio inspires little confidence that policymakers are taking this problem seriously. The government’s plan doesn’t call for a return to pre-recession debt levels until 2029/30, and even that distant target would be put at risk if the province experiences an unexpected fiscal shock or another economic downturn.

    Attracting and retaining businesses is a major part of ensuring economic prosperity. Business investment helps drive sustained economic growth by generating new jobs, productivity gains and wage growth. Unfortunately, as Dwyer’s column suggests—and the recent Chamber of Commerce report confirms—many businesses in the province perceive major barriers to investment.

    The consequences of policies that undermine competitiveness and make it more expensive to do business generally arrive gradually and over time. Some investors and firms have deep roots in the province, and so the result of each new policy choice that undermines competitiveness may not be evident to someone looking for a sudden, dramatic exodus from the province. Indeed, in the end, Dwyer elected to keep his firm in Ontario—partly for sentimental reasons and love of the place. Instead, the effects are felt gradually over time, as businesses become more likely to expand elsewhere, new investment becomes harder to attract and existing firms find it harder to compete and grow.

    In order to attract new business investment and make it easier for existing firms to survive and thrive in Ontario, the provincial government should enact policy reforms that lower the cost of doing business and make Ontario a more attractive destination for investment.

    Fraser Forum
    In Ontario, the cost of doing business is high

    Authors: Ben EisenDavid Watson
    Tags: kathleen wynneontario economybusinessbusiness investmentontario debtdebt and deficitsdebt to GDP ratio
    Blog Category: Government Spending & Taxes

  9. In her on-going quest to bribe voters with their own money, Premier Kathleen Wynne this past week made official that Ontario’s minimum wage will go up 32% to $15 an hour within the next 18 months.

    Barely four months ago, Wynne was asked about raising the minimum wage and she poo-pooed on the idea. Sounding like a true stateswoman, she proclaimed with her head up high on Jan. 19, “we’ve got a really good process…that actually depoliticizes the increases to the minimum wage.”

    What could possibly have changed her mind so quickly? Well, she wanted to politicize the increases to line herself up for the next election in a year by pandering to the unions and the low-income earners. Not to speak of stealing turf from the left and creating a wedge issue with the Progressive Conservatives.

    And there’s much speculation in the air that Wynne will call a snap election this summer or fall and not wait until June 2018. After all, after an orgy of spending to buy off voters, why wait a year before pulling the trigger?

    A sharp increase in the minimum wage in such a short time could well serve Wynne’s cynical political objectives but will undoubtedly pose a huge headache to small business owners who have little heads-up to adjust. More worrisome is the escalating effect of the increase. Say an employee’s salary jumps to $15, guess what will happen to the one already making that wage? Salary relativity means that he’d likely see his hourly wage jump to $18 or $19. A similar jump of a few more dollars per hour will be seen for those already making $20. The domino effect will translate to significantly more costs for small business who will pass it on to consumers.

    Expect, as well, jobs to be slashed. Many employers will no doubt relocate to provinces with lower minimum wages. Expect to see a push towards more automation that will require less employees. Been to a McDonald’s lately? You can order from a stand-up computer display and pick-up your order when your number comes up. All of which, means less jobs. Expect more and more fast food restaurants to follow the lead. Tim Horton’s, Wendy’s, A&W certainly won’t be far behind.

    Adding insult to injury, and more pressure on small business owners, are the changes to workplace laws that will make employers pay three hours of wages if they cancel a shift with fewer than 48 hours’ notice.

    Let’s think this one through.

    Say you operate a small snow plow company. Environment Canada forecasts a huge snowstorm in the next three days. You put your 30 plow operators on notice (because, of course, our weather predictions are always on the money. Not!). A day and a half later, the storm warning is cancelled (surprise!) and you call off your operators. Guess what? Everyone gets three hours of pay.

    A local small snow operator in Ottawa noted last week that the minimum wage increases, plus this new rule would add over $40,000 to his seasonal work. You and I will end up paying for it, of course.

    There’s no end to Wynne’s power plays to get re-elected. She has no shame. Given that her popularity with voters is sitting at a near record low, maybe it’s time to bring on the election earlier than later.

    Andre Marin is the former Ombudsman of Ontario and former director of the SIU. He ran for the Progressive Conservatives in a recent Ottawa-Vanier byelection.

    • This was never about improving the lot of underpaid individuals or providing a ” living wage ” , whatever the heck that is (2 months in FLA. ) . It is a simple political ploy much like the NDP used to do knowing their chances of getting elected were slim to none but nevertheless hoping that their absurd promises would get them elected. This Premier , despite her oft spouted apologies for the myriad of costly mistakes she has foisted on the taxpayers of this province , has no shame and buying votes is their game. She will go down in history in only one facet and that is the absolute worst Premier this Province has ever experienced. The ” I’m a 10 percenter ” tee shirts are on sale now as they are now ” 9 percent is better than nothing ” and the provincial sales tax is exempt !

  10. Tamsen Tillson on

    Excellent article, Dale! I found the information about the proportion of jobs that are now minimum wage compared to 20 years ago particularly shocking. The middle class has been gutted as we race to the bottom. I can tell you that about 1/3 of the clients of the Manna Food Bank are the working poor. And a $15/hour wage will earn a worker $600/week, or $2,400/month, before taxes.

    When we shop at Walmart and Joe Fresh and the Dollar Store, the question that we need to ask is; when we buy that item that on average we will wear seven times before throwing it out, what are the souls who are making it in Vietnam and Thailand and China earning? $1/hour? $3/day? Plus I have heard that outsourced manufacturers sometimes use child labour and slave labour, with the companies at the top of the pyramid either not knowing or not caring, or both. Nevermind the environmental cost as these are shipped half-way around the world. I recently watched the documentary The True Cost, about the fast fashion industry; and the realities of which we are blissfully unaware are just awful. It’s available on Netflix.

    In addition to applauding anything that helps Ontario workers in their quest to make a living wage, I also urge everyone to keep the treatment of workers wherever their goods are made in mind when they shop. It requires research and it means we pay more, but hopefully it also means that we consume less. The ultimate goal is that those who work in manufacturing and those who earn minimum wage can afford to buy items made by those earning a living wage. Check out the website buymeonce.com with tips on this.

  11. I’d like to propose a maximum wage. No one earns more than $50 an hour. The rich hoard wealth and it makes them more money that they never spend. That helps no one. A wage range between $20 and $50 including a basic universal income will support all members of our society. Automation is coming in a big way. We have opportunity as a society to see what our denizens are really capable of, outside poverty and oppression.

Leave a reply below. Comments without both first & last name will not be published. Your email address is required for validation but will not be publicly visible.