In January, the provincial government raised the minimum wage to $14 an hour — now that it’s been a month, how exactly are businesses faring?
Has the world come to an end for employers or is it business as usual?
Niagara Now talked with some business owners in Niagara to see how they’re coping with the increase.
Many said they’ve raised prices to compensate for the increased wages — others said they’ve felt the effect in other ways.
Kellie Crossley, owner of Color by Kellie, a hair salon on Queen St., Niagara Falls, said although her business doesn’t have enough employees to see a direct impact from the wage increase, she’s noticed as high as 30 per cent price increases from her distributors, who supply the business with the essential products to stay in operation.
“Everything I order in, those companies are going to want to subsidize their wage increase, so soon enough I’m noticing everything I’m ordering is starting to cost more. So I’m being affected that way,” said Crossley.
“Even the delivery — I notice the delivery charges are going up as well, because the people who do the deliveries, they’re paying their employees more.”
“It’s a ripple effect,” she said. “A big ripple effect.”
Crossley said she’s been forced to raise prices at the salon, and it’s become a constant challenge of explaining the increase to customers, who often don’t understand it isn’t the wages of her employees she’s paying, but the wages of the distributor’s employees.
“We don’t feel it as much when we’re paying an employee … and I don’t think my clients understand that. They think ‘oh well you just have one or two employees,' but they don’t realize that I’m actually having to pay more for everything.”
Tony Forio, owner of Ragged Glory, a thrift shop in Niagara Falls, said he hasn’t seen any direct effect yet, having no employees to pay.
He said he thinks the wage hike was long overdue.
“The people complaining about (the increase) are all the successful ones — like Tim Hortons,” said Florio.
He said he doesn’t believe the increase should affect anybody who is running a successful business.
Jeff Freimanis, owner of Jeffro’s Barbecue, said it’s simply too soon to see the true impact the minimum wage increase is going to have, especially during the city’s winter slow season.
He said he only has four employees, so it's hard to say the impact so early on, though he did increase his prices.
“You have to,” he said.
Freimanis said he’ll have a better understanding of the impact about six months down the line, once the tourist season is in full-swing.
Dolores Fabiano, executive director of Niagara Falls Chamber of Commerce, said many business owners have had to adjust prices and axe expansion plans to meet the demands of the new minimum wage.
“We have heard mostly from small business service providers as well and retail and hospitality,” she said, adding plans to hire additional staff have also been put on hold for many businesses.
For Chamber members, she said it’s not that they don’t think their employees deserve a living wage, but that the increase should have been gradual.
“We all agree that a fair living wage should be paid,” said Fabiano.
“I don’t know of any business owner who would not like to pay good, hard working staff more money, but there does need to be an understanding that with any increased costs, businesses need to re-evaluate their own plans to ensure their viability.”
She noted the Chamber does have many local businesses who are not impacted by the minimum wage increase as they consistently pay higher and said she isn’t aware of any Chamber members who have closed their businesses due to the minimum wage increase.
Fabiano isn’t personally opposed to the increase, she said, though she thinks it should have been implemented more gradually.
“I am not opposed to an increase in our minimum wage. It is not reasonable to assume that an individual can live on the same wage for years when at bare minimum we experience a cost of living increase,” said Fabiano.
“I do, however, feel that this increase was a big one, and should have been implemented over a longer period of time.”
“Most employers are good people who do want to do right by their employees. Given an appropriate amount of time, most would have incorporated the cost into their plans with far less fear and trepidation.”
She said the increase created a feeling of apprehension amongst Chamber members when it was announced.
Positive Living Niagara’s executive director Glen Walker said the increase is a positive step towards meeting a living wage for Niagara resident — calculated at $17.57 an hour by the Ontario Living Wage Network.
Walker said an important factor to keep in mind is that most people who are receiving the increased minimum wage will likely be spending the money locally.
“I think overall in terms of the local economy — as we are probably seeing — is that the money that’s going out to those employees is going back into our local economy,” he said.
“People sometimes kind of forget about that, when you’re looking at the bottom line of increased costs for a business.”
In light of the new minimum wage and associated labour relations changes, The Southern Niagara Chambers of Commerce will be hosting a breakfast forum on Feb. 22 to provide insight into current best practices for restaurants and small business owners, in terms of managing costs and improving short medium and long term business prospects. The keynote speaker will be Steve Virtue, vice-president of Restaurants Canada.