‘Dear Kathleen Wynne, I take this stuff personally’ – Belly Ice Cream owner

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Shelley Westgarth Belly Ice Cream

Dear Kathleen Wynne,
I take this stuff personally. I am that small business everyone’s theorizing about with the new wage hike.

I am not some evil corporate entity. I pay above minimum wage. I am not living in a beautiful home; I buy my clothes at Winners, and drive a Honda. I am a mother, who has paid her staff more than I paid myself some winters, because I need to offset hydro rates, tax rates and the fact that my buying power doesn’t get me giant dairy rebates that big corporate buyers get.

I struggle every summer to keep our cost of labor under 30 per cent, not because it cuts into profits, but because if we go over it, I can’t pay my hydro bill. So let’s look at some numbers.

I will now have to pay a kid, fresh out of school, zero skills, zero experience, 15 bucks an hour. That 15 bucks actually costs me about 17 when you factor in CPP and EI. (We must contribute more than the employee, not sure people know that.)

So, what do I now need to pay the skilled employee working next to him? $20? That’s costing me about $23. Where is that going to come from? I can’t just eat it. So what do I do? I stop hiring unskilled people because they don’t produce enough to be cost effective. This is not an economic theory, this is my fact.

I raise my prices, which means I can’t complete with corporate brands at all. So my nine dollar pint is now $10. People stop buying, because that’s too expensive. So my revenue doesn’t really get any higher, which means I’m still not offsetting the cost of the increase. My current pricing gets higher because my purchasing volume is going down. So my costs climb while my sales decrease.

Meanwhile, McDonald’s implements kiosks where you place your order yourself. You scan and cash out your order at Home Depot. You bank online. You pump your own gas. Have you ever noticed in a giant store that there’s only five employees to be found? Unskilled labor is being phased out of corporate employment, and small business can’t afford to grow.

The cost of buying a pint of ice cream goes up, along with anything else that’s been made in this province, so people choose the cheaper foreign option. Small business disappears slowly. Where does this end?

You want to fix poverty in this province? Reinstate E.I. and free tuition for apprenticeship training, cut taxes on small business, cut taxes on the lowest income earners, stop paying Hydro One execs millions of dollars a year while families have to choose between food and hydro, stop the Wynne government from continuously passing the buck in their screw ups to the people.

She can’t make this province livable, so force the businesses to do it for her? Ya that works. I am not corporate America, I am the reality of who is affected. This is not grand scheme economic theory, this is my company… and I’m not some rich ass paying 11 bucks an hour for a dishwasher to toil away all his life. I pay above minimum wage, but I can’t any more. So when commenting keep some of these things in mind.

Shelley Westgarth
Belly Ice Cream, Huntsville

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27 Comments

  1. Paul Whillans on

    I don’t argue with your business case per se. But some business can’t survive if employees are to have a liveable wage (the vast majority of minimum wage employees are not students but are parents trying to live on less than $15,000 per year per parent). You can hardly blame your employees if your customers will not pay a significant premium to cheaper options. If you can’t attract that premium, then your business model is wrong. Some businesses should and will fail (nothing personal)

    Personally, I think that the answer is a guaranteed minimum income, as it really a matter of social public policy. At $21,000, it can be done without any added cost to the taxpayer. This would lower the costs to businesses than a dramatic increase in minimum wage.

    But in the mean time, the working poor should not be asked to wait one more minute.

    • It wont be “some” businesses that will fail it will be a lot… Others will down scale and not hire anyone…. When they have worked enough they will close their doors…. This will mean fewer jobs for the working poor and it has already been occurring. This is a much bigger problem than a business model… This means more working poor and an almost impossible gap to cross between working classes. I have just finished crossing that gap working up to 4 jobs at a time over the last 7 years. The minimum wage increase will do nothing for most (on both sides of the fence) and make life way harder for the rest in the long run… It’s another smoke and mirror show to get votes.

      • Paul Whillans on

        Sorry Mr Culp….but that is a myth perpetrated by business……Research has shown over and over that since the introduction of minimum wage there has been NO net loss of jobs (see the current issue of Businessinsider.com) when minimum wage is raised……..Get it….no job loss. By your logic, think how many jobs would be created with a $1/hr minimum wage. But at some point, a fair and compassionate society says that a “liveable wage” is a right and business’s that can only survive on the backs of unreasonably cheap labour are not needed.

    • Just curious about guaranteed minimal income. If not the taxpayer, then who pays that minimum income?

    • Mylene Gravel Le Kaprice Resto on

      I totally agree !
      I’m a small business owner myself and I can get over the fact that the wage will increase to 15$.
      We are struggling right now like you say with Hydro bills taxes and everything so imagine paying all you employees over 15$ It’s overwhelming !

  2. Shelley you are so right. service industries will be most effected and each person will become more of an island. disconnected from society as much as ms Winn is disconnected from 2/3 of the people in Ontario. yes sounds great… min wage $15 many minimum wage earners await that mark. This is coming in in 18 months… in that time hydro and utilities will gobble up any of those earnings and have, more then that, created a situation within the Winn government riegn to make homes/ living unaffordable. a stroke of a pen makes her change but thousands of individuals need to speak up and say enough is enough! Shelley, your comments are valid. Rural ontario cannot survive these changes.

  3. Julie Groomes on

    Absolutely right… most small business owners in this town can’t afford to hire help with all the hidden costs of having employees… so basically the business owner especially on a tourist town that trade is good less then 6 months a year has bought themselves a job and to make ends meet has to work long hours and pay themselves below minimum wage

  4. If the cost of living was not so high then you wouldn’t need the $15/hr minimum wage? So let us see why the cost of living is high, gas to get to and from work, taxes both on income and at the retail level, housing, the cost to own and especially to rent, hydro and other utilities, groceries and then if you do happen to have some disposable income left after paying to live and head to the LCBO or want a smoke then boy you are living high on the hog! But wait a minute let us take a quick look at why most of this small list of cost of living items makes it hard to survive…..oh I see it’s the dam government! Taxes over taxes over taxes. If the government were to take their heads out of their behinds and govern for the people and not for themselves then they might get their feces together and think about how to help the people and it isn’t by more taxes! Just my thoughts with no hundreds of thousands of dollar study from some independent firm that would say only what the people paying them want them to say. Which would again be the government.

  5. Patricia Wood on

    It’s a terrible cycle the cost of living goes up but wages remain the same cant afford the basics so the government raises wages to offset the higher costs then business have to increase prices in order to survive so then we are back to the beginning Maybe the other Prime Minister Trudeau had the right idea implementing wage and price controls but then there goes the economy alas it’s a vicious cycle indeed

  6. You have taken the words right out of my mouth and then some!! We’ve owned Westside Fish and Chips for 38 years. We have seen increase after increase in minimum wage and I won’t repeat all of your true facts about the final cost to the business.
    Who will benefit from this increase? The government. Plain and simple. They will increase millions of dollars in tax revenue to hand over to those Hydro One executives that live a life of blindness to real small business owners. The small business will suffer tremendously.
    I take offense to the person somewhere above that says if customers choose the less expensive business that there is something wrong with your own business model…that’s cockapoo! If this increase goes through many long term businesses that have struggled as you so eloquently said through every single winter (yes even after 38 years we struggle through the lean winter months) will simply disappear.
    Do you really think that the person now earning $15/hr that doesn’t even deserve $15/hr is going to be running out and spending more money? They won’t because EVERYTHING is going to go up to accommodate the new minimum wage, you’ll end up spending more and saving less. Win/Win for the Wynn government, Lose/Lose for business.
    Lastly….I’m sorry, but those unskilled workers you’ve talked about, the ones that small business like us hire, they only deserve maybe $8/hr…giving room to give those incentive raises for a job well done. As it stands now – NOBODY is getting a raise, which is a shame because some employees deserve more than others.

  7. Greg Reuvekamp on

    Wynne and her strategists know all of these concerns well, and they DON’T CARE. This is a government that has been in power too long, and a Premier that has, what? a 10% popularity rating right now? with a year to go before they face election. They are desperate to find wedge issues that will shore up their base, and especially draw support from the NDP. They are very cynically calculating that they can piece together enough support from public service unions and others to put them over the top next spring. Small business owners are not part of this calculation. And it just might work. I’m just wondering who the OLP is going to find to run for them in this riding next year? That person is going to have to be exceptionally thick skinned, especially if they come knocking on my door asking for my support. In the meantime, I hope all small business owners are able to weather this storm, and hopefully next year you’ll have a provincial government in place that understands your challenges and at the very least gets out of your way.

  8. Dave Kealey on

    great points Shelley;
    I think that our premier forgets that the hospitality sector is one of the largest employers in the province generating about 22 billion taxable dollars a year (that is 3.8% of the provincial gdp!)
    The single industry that will be impacted the most will be that same group of mom and pop businesses such as yours and West Side not the large chains. How am I able to properly pay someone with a skill set that takes 10 years to accumulate when the first time job seeker is getting $15?
    Mr. Whillans please tell me how it is that your supposed social income will work? Will you buy Shelley’s ice cream or Debbie’s fish if you had to pay the real price? the one where not only the employee gets a social income but the owner does as well? Not too many owners take home a great pay cheque. It is not a broken business model rather the inadequate levels of taxation to large businesses.
    We the hospitality industry should stand up and say ENOUGH! we are a big business and should realise some of those same benefits.

  9. Prem Jhalli on

    Kathleen Wynne is obviously oblivious about any issues facing the small business .
    Big corporation will move to more business friendly environment .
    Whatever we say as business owners does not matter to her because she wants to get reelected at any cost that includes killing small business in Ontario .
    We are the second province increasing minimum wage to $15 but I bet Newfoundland does not have highest Hydro cost like Ontario
    I guess Kathleen is living in her own fantasy world otherwise she will not be coming up with all the ludicrous ideas .

  10. Mike Wieler Owner, West Side Coin Laundry on

    Completely agree with you. Expect hiring freezes, if not outright job losses on a grand scale. Food and Services of all kinds are going to see massive inflation. Customer Service at retailers big and small will decay further. I will have no choice but to pass on the the extra costs directly to my customers. My hope is that we don’t price ourselves out of business. There will be no gains for the people in this demographic as everything they purchase will go up. Not to mention, taxation whether it be Income tax or Sales tax will be more as the same percentage is now levied on a higher dollar value. This group will actually pay more money in tax. Liberals are balancing their books on the backs of the poor while patting themselves on the back and somehow thinking they are the Champion of the little guy. Business’ that can do the same thing outside Ontario will close shop and leave their unemployed people to take unemployment benefits. Nice legacy Premier Wynne

  11. I think a financial struggle is an everyday part of life for many of those living on minimum wage. Not much empathy in your article for them.
    Look on the bright side, there will be a lot of workers in Muskoka with a little more money to spend on your ice cream.
    And if your one of those that likes to whine about the Ontario debt, the government will also be getting a chunk of the increase in taxes, so they will be in a better fiscal position.
    So if I was going to speculate on consequences, I would say a win for government, a win for workers, and a win for you, because your customers will have more to spend.
    In any case, you had better sit down with your employees and discuss how they can help improve your business, rather than write about how they don’t deserve it, because it is going to happen no matter what you do.

    • Greg Reuvekamp on

      “if you are one of those that likes to whine about the Ontario debt”… you mean the debt load that was doubled from 132 to currently 308 billion dollars since the McGuinty and Wynne governments began governing?
      “so they will be in a better fiscal position”, well since they’ve demonstrated what great money managers they’ve been across the last 14 years, I sure can’t wait to see what competencies they’ll show managing this new pile of scratch? Maybe they can rent a couple more rubber ducks?

      So if I was to speculate on consequences, I would say that Ontario is going to be looking a lot more like Greece? if we’re lucky? and maybe Venezuela if this far to the center left party secures another mandate in this province

    • Dave Kealey on

      Mr.Smith; I will tell you how the staff will be dealt with.
      They will be asked to perform at a higher level due to increased wages. I know that I cannot have my $15 dishwasher standing around waiting even 10 minutes; they will be doing a myriad of tasks that now I cannot afford to hire a new member to do.
      as for your supposition that there will be more money to spend perhaps you should realise that the taxation on income is fixed by the federal not provincial govt and if there is an increase in monies earned then the taxation rate goes up negating any sort of supposed “real spending money”

  12. Jordan Ratanadawong on

    According to a study in the US, the average low-income household in the US earns a total of 17k per year. Their annual expenses? 24k. A total of 141% spending.

    In Ontario terms, those who earn minimum wage represent 11% of the population, 40% of which are over the age of 25. Which is to say, 40% of those earning minimum wage are most likely your peers. If lower-income is considered those who make less than the national average (rounded down to 35k so that I can use StatsCanada more readily), then 52% of Canadians are considered low-income.

    Let’s say then that the middle-class is 35k – 100k. That’s 38% of the population, who on average, according to that same US study, spend 78% of their annual salary.

    This trend continues, with high-income earners spending 50% of their total earnings, and trending lower and lower as incomes increase. This group represents 10% of the population in Ontario.

    So, what do all these numbers mean? Well, the first thing it means is that 52% of Canadians are looking to benefit from the proposed change directly. And if we can use a little empathy, being broke sounds like a miserable experience.

    But what does this mean on a macro scale? For small business owners, what this means is that 52% of the market is now better equipped to engage with your product, while the other 48% are unaffected.

    In fact, even if we exclude the top 10%, and say that all earnings that low-income households earn from the minimum wage increase come directly out of the pockets of the middle-class, middle-class families are still 13% in the green, while also reducing low-income spending from 141% of total household income to 102%.

    This seems pretty fantastic, but there’s more! Turning theory in practice, the governor of Minnesota raised the minimum wage, and taxed the high-income earners more. Drive away industry you say? The opposite! He doubled the amount of new jobs in his first term than the previous governor did in both of his. Minnesota went from the 32nd quickest growing state, to the 5th, and boasts the highest economic confidence of all the US. He turned a 6.2 billion dollar deficit into a 1 billion dollar surplus over the course of 4 years.

  13. Michele Ineson on

    If the only reason a business is profitable is by paying its employees a subsistence wage then they need to re-examine their business plan, methods, suppliers whatever. A decent minimum wage is good for people and society.

  14. Many people are forced to work two or three minimum wage jobs just to creep above the poverty line. These are not unmotivated people but often highly educated hard working young people trying to pay off education debt and make their own way in the world. Many work exceptionally hard to earn tips over above the minimum wage, which is even lower for servers, then they often are forced to share tips with the owner of the business. Often they work split shifts, have no benefits and can never afford a holiday. These people deserve our admiration and respect as well as a decent minimum wage.

  15. Bev MacWilliams on

    I agree with Shelley, Debbie, Mike and others who own businesses; they are on the front line. Until we walk in their shoes, it is difficult to understand the impact this will have on their livelihoods. Small business owners take the risk of building a business and in doing so generate jobs and create employment. It’s important that they are allowed to prosper to maintain employment. I would hazard a guess that they would do that with greater ease if government stayed out of their way. Why would a government without consultation of the people it will hit the hardest, raise the minimum wage by 31%? It’s irresponsible in my opinion. What business in this province or any province can simply absorb that kind of an increase? The question the business owners struggle with is, how do they replace that added expense? They will have to find it somewhere to keep their businesses healthy. Is it a simple case of increasing sales/revenue? I don’t think so, that is no easy task as any business owner knows. Do they pass it on to the customer? Not sure about that either as it will make them less competitive. Do they take it from their bottom line? I don’t think that is the answer as that takes food off of their table. I would suggest that they will look at the operating expenses in their business and drill out as much costs as they can without impacting negatively on their business, but in the end, it will likely mean reducing staff and doing more with less.
    I think government needs to stay out of business and let the marketplace determine fair wages.

  16. Jonathan Wiebe on

    A very interesting debate with valid points coming from both sides. I worry, however about the rise in minimum wage in this manner because of the idea that it will result in a “net benefit” to our society and economy. That may be technically true but in the process we are likely to see smaller, more local service providers/producers/builders etc. get swallowed up by larger corporations that can absorb this increase. If the locally owned hardware store goes under and all of those employees get hired at say, Home Depot and are paid a bit more money, they are likely better off with that higher paycheck at the end of the month. On the surface that’s a net benefit to our economy… but in the process we will have further empowered another multi-national corporation with headquarters and profits being funneled out of our community. Apply that logic to Shelly’s business, or any other local business and the “net benefit” may not be to our advantage. I think we all agree that we want a strong economy and a population that feels secure… certainly no simple answers.

  17. Fascinating debate/discussion. Very invigorating for those who are honestly trying to work things out and frustrating when you begin to sniff out economic doctrines and dogmas that quite frankly reek. The very real dilemmas of the small business owner that Shelley voices so well are part of an overall systemic dysfunction. I am so aware that a high percentage of minimum wage earners are the “working poor”–people who are trying to support themselves and their families–very often the victims of corporate cut-backs. I like the following story offered by JORDAN RATANADAWONG from reality–not dogma. I am going to quote because it is worth repeating. “Turning theory in practice, the governor of Minnesota raised the minimum wage, and taxed the high-income earners more. Drive away industry you say? The opposite! He doubled the amount of new jobs in his first term than the previous governor did in both of his. Minnesota went from the 32nd quickest growing state, to the 5th, and boasts the highest economic confidence of all the US. He turned a 6.2 billion dollar deficit into a 1 billion dollar surplus over the course of 4 years.”

  18. I’m old and I’ve heard all this back and forth stuff every time the minimum wage has been increased and most small business is still around. If one has to increase prices then they all have to increase their price and the consumer just has to pay more or decide to change their habits. Do you really think people will start cooking more at home because a pizza costs them an extra buck? Not a chance. So bite the bullet, so to speak, and get on with things and quit whining because us old folks have heard it all many times before.

  19. Thank you, Shelley for so articulately expressing the plight of most small retailers in Ontario today. Like you, we are being forced to consider our options for our one skilled employee at this time. We pay more than minimum wage and would never consider anything less – even for unskilled part-time. Hopefully your voice will be heard and acted upon before it’s too late for Ontario. It looks like many more retailers will be forced to close or move out of the province to survive. Let’s hope the tide changes soon. Rick & Aime Brownbill, Perfect Timing Inc., Orillia, Ontario

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