After Ontario’s minimum wage increased by more than 20 per cent in January, Carleton businesses are readjusting their business models to balance the increase.
On Jan. 1, Ontario’s general minimum wage increased to $14 per hour from $11.60 for workers who are 18 years or older. Meanwhile, the minimum wage for servers went from $10.10 to $12.20 per hour.
The Graduate Students’ Association (GSA) owns and operates Mike’s Place, a bar in the University Centre. Taylor Howarth, the GSA’s vice-president (finance), said the wage increase is not “a major hurdle,” but requires planning to adjust.
“On the book’s analysis . . . it’s going to cost Mike’s Place more money,” Howarth said. “If you look at it from a labour point of view or a moral point of view or the happiness of our customers that are coming in, they are now themselves making more money, which is a net benefit for us.”
Howarth said that by moving towards a higher minimum wage, the gap between the economic classes of minimum wage employees and business owners is slowly closing.
“I think that is where the biggest tension lies, I think that is where the biggest fallout lies. I don’t think there is a need to cutback on hours or cut back on breaks. I think there is a desire to keep profits high for a select group of people,” she said.
However, Megan Wolf, a student staff member at Rooster’s Coffeehouse, said the wage hikes have affected the business. Rooster’s is run by the Carleton University Students’ Association (CUSA).
“We get better pay, but at the same time we had to let people go and we all have to work more because of course, you can’t afford to keep as many people on staff,” Wolf said.
CUSA president Zameer Masjedee said CUSA businesses have been preparing for the minimum wage hike since the summer, but the increase isn’t good in a business sense.
“It’s not going to be good for the bottom line, and I don’t think that’s something new for any organization, or any of the small businesses that are being affected by this,” Masjedee said.
He said CUSA has added programming, like the clubs program at Oliver’s Pub & Patio, and Haven’s Online, to prepare for the wage increase.
“Ultimately, [CUSA businesses] are a large revenue source for the organization, which helps us provide additional programming services for students in such a way that the price increases aren’t coming off the backs of students,” Masjedee said.
Wolf said that inflation will not be biggest issue for workers in the minimum wage sector; it will be a lack of jobs.
“It’s going to be a lot harder to get a job because people just aren’t hiring as much now,” she said.
Masjedee said that going forward, CUSA is going to monitor its businesses closely to see how they’re being affected, and the association will continue looking for ways to cut costs.
“Aside from price increases and job cuts, because we don’t want to do either of those things, what are the other options that we sort of have? Right now, we’re again in the brainstorming phase,” he said.
Horwath said she believes the concerns of small mom-and-pop businesses about the increased wages affecting their profit margins is valid, and tax breaks for small businesses and other supports should be used to offset these additional costs.
“$15 or $14 an hour is not a fair wage. It is a fairer wage than an $11 or $12 minimum [wage], but it doesn’t get someone the type of lifestyle they require,” she said.
Photo by Meagan Casalino
