Friday, February 2, 2024

"Restaurateurs split on minimum wage hike"/ "Why this coffee shop owner started paying his staff a living wage"

Oct. 2, 2018 "Restaurateurs split on minimum wage hike": Today I found this article by Liane Faulder in the Edmonton Journal:


Even as Alberta restaurant sales hit record highs, hospitality sector voices warn that number hides the truth about minimum wage — which took its final jump to $15 on Monday in Alberta.
“It’s been pretty bad for us. And overall for the industry as such,” said Mike Bhatnagar, owner of the longtime Jasper Avenue staple, The Hat.
Restaurant receipts recently touted by the Alberta Federation of Labour’s Gil McGowan are only part of the story. The AFL president tweeted at the end of August that if Alberta’s increased minimum wage was really bad for business, then the restaurant industry would be hurting.
“But it’s not. Quite the opposite, in fact. It’s thriving,” stated McGowan’s Aug. 28 tweet.

Statistics Canada figures support that perspective. Alberta enjoyed record restaurant sales in June, with receipts ringing in at $788 million — 2.3 per cent higher than June 2017.
But Restaurants Canada notes that figure doesn’t take into account “menu inflation.” Restaurants have raised their prices, thereby increasing sales receipts. 
Factor in a national menu inflation rate of 4.3 per cent, 
and real sales receipts in Alberta were down by nearly two per cent in the first six months of 2018, says the organization which represents 30,000 businesses nationwide.
“Consider the source,” said McGowan in reaction to the Restaurants Canada number. 
“It’s data collected by Restaurants Canada, 
which is a self-interested employers’ organization 
with an interest in keeping wages low.”
In a phone interview, McGowan says Oct. 1 should be seen as an “occasion of celebration.”
“It’s the first time in decades that Alberta’s minimum wage is closer to a living wage than a poverty wage. 
That’s good news for hundreds of thousands of Albertans and the economy as a whole.”
He points out that while it’s true that employment numbers in the food service and accommodation sector are down across Alberta by eight per cent since the first minimum wage increase in October 2015, 
that sector is particularly responsive to factors such as the price of oil because it’s attached to discretionary spending.
The Hat’s Bhatnagar, who has owned the 100-seat restaurant for more than six years, said that despite the fact that he has raised menu prices, profits are declining month by month. 
Since minimum wage increases began, Bhatnagar has reduced staff at lunch and at dinner, and may close the restaurant on Sundays. 
Increased costs for labour and food are the main reason it’s harder for Bhatnagar to make money.
Restaurant owners interviewed by the Journal acknowledge they’ve raised prices in response to increased labour costs (including new provisions that require employees to be paid for statutory holidays), as well as other hikes for food, fuel and insurance. Mo Blayways, who owns two locations of 1st Round, has increased prices by more than 10 per cent over the last three years.
“It’s a death by a thousand cuts,” said Blayways, who has 150 full-time and part-time employees. “At the end of the day, (the minimum wage increases) have been extremely damaging to our consumers and our employees.”
Each time the minimum wage has been hiked in the last three years, employment falls in the Alberta hospitality sector, says Restaurants Canada western vice-president Mark von Schellwitz.
“Our industry employment is down by thousands of workers over the past few years, not to mention the under-employment, as many surviving employees have seen their hours decrease as well,” said von Schellwitz in an email.
The City of Edmonton’s chief economist, John Rose, says the city’s accommodation and food services sector has had a “pretty grim 12 months.” In August 2017, roughly 47,700 people in Edmonton were employed in this area. By this past August, that number was 41,700, a drop of 12.6 per cent.
“The broad-based, slow recovery in the economy has put a bit of downward pressure on the hospitality and food sector and, of course, we’ve had the increase in the minimum wage. Although it’s hard to quantify, I suspect that’s had an impact, too,” said Rose.
The minimum wage increases have taken place during one of the worst recessions in Alberta since the 1980s, making an assessment on the impact of the increases difficult.
Restaurateurs have shifted their business models in response to the wage pressure.
 Blayways, a member of a Restaurants Canada advisory committee on minimum wage, has increased the size of sections his employees must cover on a shift. 
Whereas six or eight servers used to be on a given shift, there are now four to six. On some shifts, Blayways has eliminated the dishwasher position.
Reducing staff and increasing menu prices “is not putting more money in our pockets as owners,” said Blayways.
“This is allowing us to stay solvent,” he said.
Restaurants Canada notes that in 2014, labour costs made up 29.7 per cent of restaurant costs. A recent survey of the organization’s membership reveals that labour costs now total 32 to 34 per cent of a restaurant’s budget for the vast majority surveyed.
Some restaurant owners in Edmonton are sanguine about minimum wage hikes. Chris Sills, co-owner of Rostizado restaurant, says his Mexican restaurant has adapted to increasing wages (which added $80,000 yearly to the restaurant’s costs) without too much difficulty. 
Rostizado 
has raised prices, 
increased the size of sections a server must cover,
 and let some people go. 
Sills says debt servicing, and a slowdown in business, has also affected the restaurant’s bottom line.
Sills says staff complain that customers are tipping less than before.
“I don’t think (the minimum wage increase) is a bad thing,” said Sills. “But I think the servers are having a hard time because they are making less money.”
Sara Gramajo, 38, a career server who has been at The Workshop Eatery since 2016, says her tips have decreased slightly since minimum wage came in. 
In addition, her “tip-out,” the amount of her tips that are traditionally redistributed by management to the staff who don’t get tips, has increased to 6.5 per cent effective Oct. 1 from five per cent in 2016.
Gramajo said that redistribution is “fair” in her mind. Workshop Eatery restaurant owner Paul Shufelt says a bigger tip-out from servers is necessary to compensate kitchen staff and bartenders who don’t get a raise on Oct. 1 because they are already making $15 or more.
Arden Tse, co-owner of the ramen restaurant, Prairie Noodle, says they are coping with increased labour costs by raising menu prices and re-jigging their business model somewhat. They did not lay off staff as a result of the increased minimum wage.
“At the end of the day we have to deal with whatever we have to deal with,” said Tse.



Jul. 25, 2022: I found this article:


Jan. 27, 2022 "Why this coffee shop owner started paying his staff a living wage": This is by Bridget Forbes on CBC:


When you walk into 2% Jazz Coffee in downtown Victoria, you'll find americanos, espressos, and all of the other things you'd expect.

What's unexpected is what's going on behind the scenes.

In an industry that's struggling under the weight of the pandemic, owner Sam Jones made the decision to pay all of his 22 employees, from baristas to dishwashers, a living wage.

That wage doesn't include tips. He's also offering up to 10 days of paid sick leave — twice the amount currently guaranteed by the B.C. government.

"When people ask me how I can afford to pay a living wage, I turn the question around and say, 'How can I afford not to?'" said Jones, who sees his employees as an asset instead of an expense.

Jones started his certified living wage program in August 2021. One of the perks is he hasn't had any trouble attracting employees, at a time when other restaurants in his area can't keep staff on the books. 

"There is not so much a labour shortage in my mind, there's a reaction to how we treat labourers in our society right now," said Jones. 

"Why would you want to ... work that hard and have to go get another job at the same time [to make ends meet]? 

COVID has really put that on a pedestal for everyone to see."

A living wage

A living wage is calculated for cities across the country as what each adult in a two-parent family needs to make to support two children and pay for basic expenses like shelter, transportation, food and childcare, according to Living Wage For Families BC. It differs from location to location based on cost of living.

Right now the living wage for Victoria is $20.46, more than five dollars higher than British Columbia's minimum wage, which is set by the provincial government.

Jones had already paid his employees more than minimum wage, but moving to a living wage has increased his labour costs by about 20 per cent. He had long been thinking about making the change, but credits the Bread and Butter Collective for finally giving him the courage to do it.

The collective is a group of Victoria hospitality owners that formed during the pandemic to try to address problems in the industry, as well as share information and best practices.

Some collective members were already paying their staff a living wage, and were able to advise Jones on how to implement it at his own business.

Hoèlune Hernandez, 21, started working at 2% Jazz Coffee as a barista in March 2021. After growing up in a lower-income family, she says it's the first time in her life that she's making more than minimum wage.

"Since I've got my job at 2% Jazz, there is so much stability and ease that has come from it," said Hernandez.

After her father died in 2020, she worked at least two jobs at a time to support her family.

She bounced around five different jobs trying to find one that would allow her to make ends meet, before landing at 2% Jazz.

"It's widened my horizons to what life could be like, because I've been living off of minimum wage for all of my life," said Hernadez.

She now sees a possible future for herself taking on a bigger role with Jones's company, including building the relationships between the cafe and suppliers and farmers.

Jones is encouraging other business owners to follow suit in paying their employees a living wage.

"When you combine the base value of paying your employees more with the vision of the company,

and you include your employees in that vision,

that's where you get retention, 

you get happy customers because they see that you have happy staff," he said.

"If you're still thinking that you can attract employees at a minimum amount of pay and the minimum amount of involvement in your business and the minimum amount of respect, which is what those two previous things add up to — well, good luck to you."




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