Minimum wage increase stings, says Olympia Restaurant, Home Hardware

Lindsay and District Labour Council leader says minimum wage should never have been frozen in the first place.

Nicki Dedes and her family have ensured the Olympia Restaurant has been a downtown fixture in Lindsay for more than 100 years. The owner operator is used to “living on edge” in the restaurant business, given that profit margins in the industry are even lower than they are in retail – about three per cent.

“And that’s assuming we do everything right, all the time,” says Dedes.

So when the clock struck midnight on New Years Day, as a business owner she wasn’t necessarily celebrating the absorption of a minimum wage increase of 30 per cent in one fell swoop.

Minimum wage increased then from $11.60 to $14 an hour. Next year, it will jump to $15 an hour before being tied to inflation after that.

“The timing is not easy for us to make that adjustment,” Dedes tells The Lindsay Advocate. “Things slow down in January. And, as a business we’re paying last year’s quarter for GST,” she says.

In addition, all their bills are going up, from hydro rates to general inflationary pressures that affects the things they need from suppliers.

“Our cash flow basically comes to a screeching halt,” she says.

Dedes says on the operational side, though, they’re not laying off staff. “I have no problem with a higher minimum wage on an ethical level – we just have to find our way to cope with it.”

The Mediterranean restaurant is looking at cost efficiencies across the board, from being smarter in how and where they buy goods, to removing some menu items to increasing the cost of others.

“Our people are our greatest asset and we’re trying to be supportive,” says Dedes, although that doesn’t mean they won’t have to trim the length of shifts sometimes as another way to find some savings.

Frank Geerlinks, owner of Home Hardware group of stores in Lindsay and area, previously told The Advocate there was no doubt they would feel the increase.

“Look, this is going to sting us a bit. There’s no getting around that,” he says.

For Geerlinks, though, he sees the whole minimum wage focus as a misnomer anyway. “It should be called entry-level wage,” he says.

At least at his family of stores, Geerlinks says any employee still stuck at minimum wage a year or a year and a half into his or her job means there’s an issue with the employee.

Geerlinks knows that someone making $18 an hour at his stores may have an issue with the minimum wage increases, too, but he underscores to them that this isn’t his choice.

“I’m obligated,” since it will be a provincial law.

Labour Perspective

James Mulhern is the president of the Lindsay and District Labour Council. He says that, as an individual, he has to admit that this is a huge jump in the minimum wage overnight.

But Mulhern says it has to be looked at another way, too.

“It should never have been frozen in the first place and then it wouldn’t have had to rise so fast to ensure people are okay,” he says.

Between 1996 and 2003, the general minimum wage in Ontario was frozen at $6.85 per hour by the government of then-Premier Mike Harris. For seven straight years there was no increase at all.

“Now we’re 22 years behind schedule,” says Mulhern.

“If that minimum wage had been allowed to go up with inflation, it would likely be $18 an hour by now, but it would have been gradual and not so hard on businesses.”

The labour leader says he hears all the time that the new minimum wage increase is only going to benefit students in entry level jobs.

“It’s just not true.”

In fact, in Ontario, the proportion of minimum wage workers who are not teens has risen from 45 per cent to 61 per cent in a single decade, according to Armine Yalnizyan, quoting Statistics Canada.

As well, she notes that nearly 30 per cent of Ontario’s labour market earned less than $15 an hour in 2016.

Raising the Floor

Mulhern says that when “the basement is raised” on wages, “then everyone else gets raised up, too.”

Businesses have to make money, he says, or they wouldn’t be here, but they don’t exist without workers who need to be able to afford to live, he says.

Mulhern has watched the cause and effect of what happened when minimum wage was frozen for so many years, he says.

“Money Mart and places like it began to spring up everywhere. They sprouted up when people started living in dire straits. We didn’t have as many food banks then, either – and now they’re everywhere, even in small places like Dunsford and Little Britain.”

“This is a sign that things have changed, and not for the better,” Mulhern says.

In the latest opinion poll, this one taken by the Financial Post last week, two-thirds of Ontario residents support the province’s minimum wage increase.

“Support for the move is spread across all income groups. A lot of people are in favour, even though they themselves aren’t affected,” according to the Post, including 73 per cent of people aged 65 and over and 70 per cent of all women.