What’s next, would the labour market and unions like to take over management of all small business in Ontario? While most SME’s have had some time to prepare for the incoming minimum wage hike, the reality is many of them may be in a position where they are forced to make decisions financially to stay afloat. If they employ a lot of part time and lower income workers due to their industry type the changes would have a major affect on their bottom line. For some it would be the difference between profit and loss. Their options would be to cut benefits or other items or cut staff and push more work onto their existing staff hardly the desired affect the provincial government was looking for.
The government has not thought this out in terms of real ramifications to a business so assuming the SME’s have had time to see the impact should come as no surprise. I doubt labour organizations like the one setting up the hotline have also considered accurately the ramifications and had they done so shouldn’t the government share more in the frustration here. The false thought that this would impact just those below the threshold is simply poor financial planning. Anyone running a business knows there is a pay hierarchy within each business. Based on job description, ability, credentials or simply seniority most business don’t pay their staff the same hourly figure. If you move an employee up to $ 14/hour, the employee already making that with 3 years experience will obviously require a similar wage increase or the employer risks losing them. The cost to the system is more than the government planned so it will most likely be more than the SME would have planned. How many realized for example that higher wages are also incremental on CPP, EI, Employer Health Tax and pension matching payments? It’s substantially more than simply the dollar figure for those under the minimum wage threshold.
Forcing employers to change their benefits based on this will simply harm the employees further. While I’m certainly not advocating they change benefits as my belief is they should pass on increases to the consumer, some may be forced to. If you have fixed pricing like a franchisee would and there’s been no attempt to adopt higher prices due to competitive risks then how do you recoup the costs on the revenue side? Is the government and labour simply saying, “hey business owners you make too much you should pay everyone more and make less”? That seems very totalitarian.
Putting in a hotline is simply another bully move by the labour movement. Are we now going to force a business to take a loss? How many people will set up shop in the province under these kinds of rules and regulations and current labour climate? There is a false sense right now from both our provincial and federal governments that business is indestructible in the current economic cycle. Business market reaction take years to manifest so the current positive climate was created several years ago. Current tax changes, income tax levels, hydro rates and wage requirements will manifest over the next few years and will erode out competitive advantages. We really need to be more careful about how we treat small business regardless of the stripes of the political party in place. They support our economy and drive new employment and tax revenues. These changes will make Ontario a less desirable place to do business. Labours involvement in running business has to be more carefully tempered. While employees should be protected, if allowed to push wages and benefits labour can kill and industry, see auto industry, and in the long run do more damage to the very people they’re trying to protect. Common sense needs to prevail.