Industry Reacts to Minimum-Wage Freeze

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TORONTO — Citing a 20-per-cent increase as a detriment for businesses, restaurant operators and hospitality groups are applauding the Ontario PC government’s decision to freeze minimum-wage rates.

The Ford government recently announced Ontario’s minimum wage will remain at $14 an hour as opposed to the $15 that was planned by the previous Liberal government.

Tony Elenis, president and CEO of the Ontario Restaurant Hotel and Motel Association (ORHMA), says restaurant operators are breathing a sigh of relief.

“The industry has suffered tremendously with an almost 20-per-cent increase over such a short time and it has really penalized many [restaurateurs],” he says. “It’s not just about the minimum wage. It’s about the food and energy prices that have gone up as well. Even with price increases, in speaking with many restaurateurs, they’re working harder than ever.”

His comments come as the Ontario’s minimum wage increased from $11.60 to $14 an hour on January 1, drawing complaints from restaurant and other business owners who say it forced them to raise prices, cut staff hours and employee benefits.

They also come following increases in other provinces such as Saskatchewan, Manitoba and Alberta, whose minimum-wage rate climbed to $15 an hour. Saskatchewan’s rate went up 10 cents to $11.06 and Manitoba’s rate went up 20 cents, from $11.10 to $11.35.

At a time when restaurateurs are struggling to retain employees — mainly cooks, bussers, dishwashers and other back-of-house staff — the move to freeze minimum wage will continue the transient trend of employee turnover in the industry, says Bruce McAdams, assistant Professor at the University of Guelph’s (UoG) School of Hospitality, Food and Tourism Management.

“We’ll continue to have a transient workforce because people can’t afford to make a living wage in the industry,” he says. “There’s always been room to increase our pricing. This idea that businesses are going to close, which was the saber-rattling we’ve heard, is not true. People aren’t shuttering their doors.”

The real issue isn’t prices or increasing costs, says McAdams, but the increase in the server wage, which he says should have been frozen.

“What [operators] tell me is their cooks are going to make less money because servers have to be paid more. If they had frozen that, everyone would’ve been very happy and willing to increase the minimum wage for cooks [and other back-of-house staff].”

Still, Doug Fisher, president of FHG International, argues restaurants have already made the necessary price adjustments in anticipation of the minimum-wage increases, suggesting operators will still make profits while employees suffer.

“There isn’t a restaurant out there than hasn’t accommodated those price increases already,” he says, adding that back-of-house staff are getting ripped off by the freeze. “You haven’t seen an increase in bankruptcy and closure rates or customers refusing to go to restaurants because the prices are too high.”

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