An Ontario restaurant owner says the province’s minimum wage increase to $14 an hour and $12.20 for liquor servers means he will now be making a lower hourly wage than his employees.
Stelios Dimakos has owned Shorty’s Grill in Owen Sound, Ont., for 11 years. He says he’s always worked hard to pay his roughly two dozen workers fairly and everyone already made more than the old minimum wage of $11.60 an hour and $10.10 for liquor servers.
But with the more than 20 per cent minimum wage increase overnight, Dimakos says his employees will now be making more per hour than him. He says he puts in about 90 hours of work per week and is the first one at his restaurant and often the last to leave.
“I don’t see my kids a lot of the time,” he says.
Dimakos calculates that his wages work out to about $12.50 per hour. The minimum wage for most workers, including dishwashers, rose from $11.60 an hour to $14 an hour in Ontario on Monday – an increase of 21 per cent. Liquor servers saw their minimum wage rise from $10.10 to $12.20 per hour – an increase of 23 per cent. That is what they make before tips, which are often a majority of a server’s pay.
Dimakos says the minimum wage increase, combined with another planned increase to $15 and $13.05 for liquor servers on Jan. 1, 2019, will hit his bottom line by about $150,000.
In order to absorb that impact without paying himself even less, Dimakos says he is raising menu prices between about 50 cents to $1 per item.
“We don’t have a choice,” he says. “I don’t want to cut staff. I don’t want to cut the quality of my product, so that’s the only solution.”
Prices could go up even more if food costs increase substantially as a result of the minimum wage, Dimakos says. Wages are about 30 per cent of his expenses, and food costs are over 40 per cent.
“So we’ve got a 21 or 22 per cent increase in wages, but what about our raw product?” he says. “Is it going to be another 10 per cent increase there? That’s huge in our industry.”
Dimakos says he wants customers to know that he’s not raising prices in order to increase profits. “We’re just doing this to try and stay alive and survive.”
A survey of restaurant owners by Restaurants Canada earlier this year found that the new minimum wage would lead 98 per cent of owners to raise prices, 97 per cent to reduce labour hours, 81 per cent to lay off staff, 74 per cent to explore labour-saving technology and 26 per cent to close at least one location.
The Financial Accountability Office of Ontario, an independent watchdog, has said that the minimum wage hikes could result in a loss of 50,000 jobs.
Dimakos says he’s not opposed to the minimum wage going up but that it’s too much to absorb overnight. “It doesn’t give us time to slowly, gradually increase our prices and adjust,” he says.
Liberal Premier Kathleen Wynne announced the minimum wage increase in May, with the bulk of the increase coming into effect just months before the province’s fixed election date, June 7, 2018.
The opposition Progressive Conservatives have said they would maintain the increase to $14 but raise minimum wages to $15 more gradually, increasing them 25 cents per hour annually until 2022.
B.C.’s New Democratic government is planning to raise the province’s minimum wage from $11.35 an hour to $15. The government said in August that it will set up an arm’s-length “fair wages commission” to come up with a “planned, responsible path” to a $15 minimum wage.
Alberta, which consistently has the highest weekly wages of any province, will raise its minimum wage from $13.60 to $15 on Oct. 1, 2018.
Ontario Minister of Labour Kevin Flynn told The Canadian Press last week that he doesn’t believe the “doom and gloom” scenario and that the Liberals are lowering taxes for small businesses to help them cope.
“It's going to take an adjustment,” he said. “It's going to take a change.”
With files from The Canadian Press