Money Wage hike triggers food industry divide

16:11  09 january  2018
16:11  09 january  2018 Source:

By the numbers: How much will the minimum wage hike cost Tim Hortons?

  By the numbers: How much will the minimum wage hike cost Tim Hortons? The Great White North Franchisee Association says the minimum wage increase will cost the average Tim Hortons franchise $243,889.10 a year Here’s a closer look at the numbers provided by the association, which says on its website it represents 50 per cent of the Tim Hortons chain in Canada. The figure is based on a minimum wage increase of $2.40 an hour The calculation assumes the $2.40 increase will be applied to every worker’s salary. Only employees who were making the previous minimum wage, $11.60 an hour, are legally entitled to the new rate, $14. Some businesses have said the higher rate will inflate their entire payroll because they want to maintain pay differentials between newer hires and more senior staff. The $2.40 rate is bumped up to $3.35 an hour when other costs are factored in. GWNFA says this figure includes Canadian Pension Plan, Employment Insurance, Employee Health tax, workers’ compensation premiums, training costs, sick leave, and increased vacation pay. Increased vacation pay introduced by Bill 148 will only impact workers who have been with a company for five years or more. They will now be entitled to three weeks leave. Average number of employees at a Tim Hortons store: 35 Average increased cost for one full-time employee: $6,968.26 Divided by the hourly cost increase (of $3.35) per employee and a 52-week year, this figure suggests Tim Hortons employees work a 40-hour week.

Companies should weigh price hikes to offset min. wage hike : Ont. labour minister.

Wage Hike Triggers Food Industry Divide . Janet Sparks is the former publisher of the Continental Franchise Review, an industry newsletter that covered the franchise community for over 30 years.

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TORONTO - Signs announcing price increases and letters to employees slashing benefits have grown rampant in Ontario, revealing two very different approaches businesses have gravitated toward in the wake of province's minimum wage hike.

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The study from the Employment Policies Institute (EPI) conducted an analysis of employment trends from 1990 through 2017 and found that California’s minimum wage hike could trigger the loss of 400,000 private-sector jobs by the time it goes into effect in 2022.

And it points out a huge divide between labor advocates who say all workers must share in a minimum pay increase and business "They’ve done very little, actually nothing at .75, to help the lowest-paid workers in our industry ," she said. Could a Polk minimum wage hike trigger city opt-outs?

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Some Tim Hortons franchises have faced significant backlash after cutting paid breaks and forcing workers to cover some of their dental and health benefits to compensate for the minimum wage jump from $11.60 and hour to $14 an hour last week, while chains such as Pizza Nova say they will be upping prices instead.

But how some companies settle on the route to take might have come down to a factor as simple as timing, said Sylvain Charlebois, the dean of Dalhousie University's faculty of management.

He said there is little to no evidence that Restaurant Brands International Inc., the parent company of Tim Hortons, and franchise owners worked on a strategy before Ontario's new minimum wage rate came into effect Jan. 1. "It is not a surprise. Everyone knew it was coming," Charlebois said.

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The wage hike pulled the bottom rung off of the ladder, in other words. It found that Seattle’s minimum wage boosted wages by roughly 1 percent in food services overall and 2.3 percent in limited-service restaurants “This industry is an intense user of minimum wage workers,” the authors write.

A 31.6-per-cent wage hike across the board – assuming people already paid above minimum wage will likely demand an increase as well – would increase costs for the average restaurant by ,000, Mr. Elliott says. That will likely trigger "a combination of layoffs or holding off on hiring staff

Price increases take time to calculate and roll out, he said, so large companies with many locations or franchises that didn't plan ahead might have been in a scramble to adjust to the hike and target their workers instead.

"Food services are heavily affected because most of their workers are paid minimum wage and they can't rely on robotics and automation, but things like changing benefits or asking employees to pay for uniforms are things you can change very quickly," Charlebois said.

Raising prices can also be problematic because there's only so far you can increase them without driving away customers. A study published in the Journal of Labour Research has shown food service companies can only sustain a three per cent increase over a few years, which Charlebois said often pales in comparison to the amount needed to offset higher labour costs.

Despite that research, Ontario Labour Minister Kevin Flynn seemed to be nudging businesses to at least consider price increases.

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Findings contradict UC Berkeley study on Seattle's minimum wage , trigger 'wonk war'. Choose your own Seattle minimum- wage study adventure! Do you love the minimum- wage hike ? It found that pay for food -service workers increased increased by about 1 percent in the food service industry , and

And, he’s concerned that a disparity in wages could pose an unnecessary divide for other metro suburbs outside Polk. Councilman Ted Weaver said he would “fully support” opting out of a Polk County wage hike . World Food Prize winners fight to improve child nutrition.

He said Monday that companies struggling to cope with the minimum wage legislation have many ways to handle cost constraints and "to pretend that maybe pricing isn't a part of that, I think it would be unfair."

"I think any business having to make decisions would take a look at, is my pricing fair?" Flynn said. "Is this something where I can make a profit, but make sure that the people that I'm paying, the people that I'm employing, aren't living in poverty?"

Those aren't questions all business owners can mull over. Franchisees, for example, often aren't allowed to raise prices.

The Great White North Franchisee Association, a group created last year to give voice to the concerns of some Tim Hortons franchises, has said that without help from their parent company in raising prices among other cost offsetting requests, franchisees have been forced to take steps to protect their business.

In a statement Monday, Tim Hortons head office said franchisees could offset costs by analyzing their top-line sales, operational efficiencies, and savings on equipment and costs such as waste management.

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Andrew Cuomo wants to have it his way with New York’s fast- food industry — and restaurant owners aren’t loving it. To find out more about Facebook commenting please read the Conversation Guidelines and FAQs. Fast- food franchisees skewer NY wage hike .

The fast- food industry has become a poster child for many of the challenges because it blends rock-bottom wages with massive scale – it’s one of the largest Many economists say a hike in the base wage rate would help the economy overall, improving worker paychecks more than it harms job growth.

The statement came days after head office called franchisees who took aim at employee benefits, calling them "reckless" and "completely unacceptable," and said staff "should never be used to further an agenda or be treated as just an 'expense.'"

Pizza Nova CEO Domenic Primucci said restaurant franchises at his chain will pass along the cost of Ontario's new minimum wage rate to customers rather than transfer the brunt of the hike to employees, though he wouldn't say when or by how much.

While he said the legislation has been "contentious" and has started to have an impact on everyone from owners of small mom-and-pop shops to large corporations, "it doesn't affect one more than the other."

"There is not much we can do about it other than accept it and move forward."

Tims customers fight cutbacks at rallies .
TORONTO - Protesters who rallied outside Tim Hortons locations across Ontario on Wednesday roasted some franchisees for slashing workers' benefits and breaks in an effort to compensate for the province's minimum wage hike, but many said their gripes would not derail their daily coffee runs. Those who gathered said they were worried staff would be negatively impacted if they boycotted to spite the small handful of franchisees — not necessarily the 16 locations that were targeted — who demanded workers cover a larger share of their dental and health-care benefits and take unpaid breaks to offset the 20 per cent raise to $14 an hour.


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