Steve McGuinness
Special to Niagara Now/The Lake Report
I am writing today, seated comfortably in a cafe in Niagara wine country. The grape harvest continues as I sip my morning cup of java.
I’m reflecting back on travel memories from a 2016 Guatemalan trip and a tour of a coffee plantation. The coffee bean harvesting and processing activities were as fascinating as any winery tour.
The local plantation labourers worked so hard for so little. They clambered up and down the hillsides in blistering heat, plucking ripened coffee cherries from the bushes. It was piecework.
When they finished gathering, they dumped their baskets out onto scales to be paid by weight. But only after their supervisor culled the healthy buds from the bad.
I am sure many Guatemalan coffee plantation workers would eagerly compete for foreign worker visas to enter Canada as seasonal farm workers. Field labour is even tougher closer to their equatorial home. We need their imported labour because locals refuse to work so hard for so little.
Our plantation tour guide explained that the profit margin on the sale of coffee is mainly added at the retail end, even with “fair trade” brands. One of that plantation’s biggest customers was global coffee giant Starbucks.
Niagara-on-the-Lake prides itself in offering shopping experiences different than the chain stores dotting the retail landscape elsewhere in southern Ontario. But it is also home to multiple Starbucks outlets. Two still survive, although the drive-thru location they abandoned in Virgil last year remains unleased.
Retail chains and tourism sector employers pay minimum wages to workers. Ontario’s minimum wage increased to $17.60 per hour on Oct. 1. For that, tourism sector employees cannot afford to rent here in NOTL, where absentee landlords can earn a king’s ransom leasing to stag parties on a short-term rental basis.
Starbucks recently announced plans to close more locations, laying off a further 900 lowly paid workers. Another local outlet, on Lake Street in St. Catharines, just closed up shop. The irony is that this restructuring plan was hatched by one of the best-paid CEOs in corporate America.
Starbucks CEO Brian Niccol was recruited with a pay package of over $110 million in August 2024, including a $10 million signing bonus and a $75 million equity grant. In his first four months, he received total compensation of $95.8 million.
In contrast, the average barista makes $14,674 a year. That’s a ratio of top pay to average pay of 6,666 to 1. Starbucks could afford to save all nine hundred front-line worker jobs and more, just by lowering Niccol’s excessive compensation to a more reasonable level.
Yet there is always more of a public outcry over a minimum wage hike’s impacts on business operating costs than about excessive executive compensation.
This prevailing attitude ignores the reality that customer-facing workers drive the retail service experience, building customer loyalty. It is not the overpaid CEOs in the corner office at the top of the pyramid enhancing the brand’s value.
Stay well caffeinated and count your blessings.
In his Bay Street career, Steve McGuinness was a senior advisor to large financial institutions and is now retired in NOTL. Send your personal financial planning questions to him at smcgfinplan@gmail.com.
