Since the province of Ontario raised the minimum wage to $14 on January 1, 2017, businesses have responded. But not in the way inept Liberal Premier Kathleen Wynne hoped they would.
Tim Hortons, for instance, has eliminated unpaid breaks and slashed health benefits. Other full-serve restaurants, meanwhile, have increased the tip pool, or removed tips for dishwashers.
In the end, the higher minimum wage will cause some low-wage workers to lose up to $2,000 annually, which is similar to what occurred in Seattle when it jacked up its minimum wage.
But as unions begin to protest outside of Tim Hortons locations, a new report takes a look at how much the new minimum wage will cost the average franchisee in 2018.
According to the Great White North Franchisee Association, a group representing about half of the country’s Tim Hortons franchisees, (via the Financial Post) independent owners can face an increase of $243,889.10 this year.
“The calculation assumes every employee’s hourly wage is boosted by $3.35, which includes the $2.40 minimum wage hike and factors in additional costs from other changes to the province’s employment and labour laws, like increased vacation pay,” the report said.
This is important because leftists and union activists think independent operators of Tim Hortons locations are rolling in the dough.
Not only does Restaurant Brands International control the prices of their products, the franchisees are being squeezed by the corporation, which makes it difficult for the proprietors to turn over a profit.
In Canada, the typical profit margin is around three percent, and when labor costs spike, these businesses will respond. Restaurants in the U.S. are already bracing for higher minimum wages, like Red Robin, which is eliminating busboys at all of its close to 600 stores.
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