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Eateries ‘starving’?

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1 Eateries ‘starving’? on Thu Apr 15, 2010 7:37 am

grumpy old man

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Forced to eat higher payroll costs, many Manitoba restaurants are at
their breaking point between cuts in staff and services, dropping sales
or shutting down altogether.

That’s a dire picture the Canadian Restaurant and Food Services
Association says is facing several of its hundreds of Manitoba member
businesses, as a result of the NDP government’s plan to hike the hourly
minimum wage by 50 cents to $9.50 in October.

One of those food-service providers, Diana Coutu of Winnipeg, said
Wednesday she and husband Pierre have no choice but to slash 30
employee-hours from their weekly schedule for 27 workers, just to
maintain a 5% profit margin at their Diana’s Gourmet Pizzeria in St.
Vital.

“Unfortunately, we’re going to have to force more productivity out of
the employees,” Coutu said of the drop in work time for her staff.

“Some may have to go elsewhere, because they may not be able to make
their bills with the hours we have for them.”

And such a move, she added, brings other problems during busy periods
“if my customers don’t get the service and attention they’re used to,
and deserve.”

It’s a dilemma increasingly common in Manitoba amid minimum-wage
hikes totalling $1.50 in the past three years, food services association
officials said, citing labour costs among the factors that have led to
500 fewer restaurants in the province than a decade ago.

Courtney Hirota, vice-president of the association’s Manitoba and
Saskatchewan branch, estimates the province’s coming wage hike will cost
operators a total of about $16 million — or $7,000 each.

Raising menu prices is an option that leaves a bitter taste with
businesses and their customers, she said.

“Not only does it impact the business operators, but it affects the
people looking for jobs,” Hirota said of the forced wage increase.

“When we have to pull back on hours because we don’t have any more
options, they’re the ones affected.”

However, Labour Minister Jennifer Howard suggested last week the NDP
government’s hikes to the minimum wage have not hurt employment.

“The unemployment rate has continued to be low,” Howard said,
insisting she “did listen to” business operators’ concerns about the
wage increase, “and that’s why we went with the October date” for the
single 50-cent hike instead of two smaller jumps of 25 cents.

ross.romaniuk@sunmedia.ca


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2 Re: Eateries ‘starving’? on Thu Apr 15, 2010 7:39 am

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Is there much to this threat?

Can most eateries raise their prices to recoup their increased costs? Will the "competition" that runs leaner hold the line on price increases, forcing others to improve productivity?

Is $0.50 an hour increase too steep at once?



Last edited by grumpy old man on Thu Apr 15, 2010 7:55 am; edited 1 time in total


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3 Re: Eateries ‘starving’? on Thu Apr 15, 2010 7:50 am

Deank

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5% raise in employee costs is not a laughing matter. never mind the 15% that has happened over the last year+.


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4 Re: Eateries ‘starving’? on Thu Apr 15, 2010 7:57 am

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I'm not suggesting it is a laughing matter.

Here is what I'm saying: if everyone has exactly the same cost issue to deal with at one time is the problem more significant?


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It's their, they're and there; in Canada it's colour, cheque, rumour and zed...

5 Re: Eateries ‘starving’? on Thu Apr 15, 2010 8:11 am

Miz point

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How many persons on this board have worked in the food services industry? Underpaid and overworked is the norm in that business and as to hours, those too are played with in many establishments. One cannot make a living on minimum wage and for anyone here to say oh go get another job.....hmmm, wonder what some would be saying if the tables were turned on them and their wages or hours had to be cut?


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6 Re: Eateries ‘starving’? on Thu Apr 15, 2010 9:23 am

JT Estoban

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I worked in the food service industry for a few years....

" Underpaid and overworked is the norm in that business and as to hours, those too are played with in many establishments."

Agreed, that's why I left to do something else!


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7 Re: Eateries ‘starving’? on Thu Apr 15, 2010 9:31 am

Miz point

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There are some of us who have attained the highest professional recognition, the Red Seal standard as well many other individuals who through hard work and moving up the ranks have become invaluable assets to their respective employers. In the restaurant business, consistency and quality are the two main goals and if maintained will ensure a prosperous operation even in difficult financial times. All one has to do is look at the various restaurants in this town that have survived over many years, economic feast and famine.

I would not want to be running an establishment whereby I was in the position of having to constantly train workers to meet my standards. There are many good employers out there who have maintained the same staff for years, both front and back of house and there are those other whiny employers who only care about keeping that shiny S-class Benz in front of their Linden Woods home.

Yes, one can always seek new employment or upgrade their employment status but once again I ask of some folks, why is there a constant need on this board to crap all over folks who make the lowest wage? For some folks due to many factors which may be out of their control, minimum wage is all they will get for the time being or would some rather these folks not work and instead out of frustration bleed the system dry?


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8 Re: Eateries ‘starving’? on Thu Apr 15, 2010 9:56 am

grumpyrom

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Many good points Miz P.

I have no experience in the restaurant business, but I'd be very curious what percentage labour is of the total cost of running a restaurant? To me it would be a lot easier to understand how huge an impact it would be to the average consumer to pass on the 5% labour cost if I understood what kind of total increase that meant. Are we talking a 1%, 2.5%, 4% increase overall?

Assuming a restaurant's total expenses was 75% labour (again I have no idea), then we'd be looking at something like a 3-4% increase in the price of a nice meal out. Considering most people eat out once or twice a week at most, and most meals range in the $50 to $100 range....we're talking about something like an increase of $1.50 to $4.00 per meal to offset the minimum wage increase.

I can't speak for most people, but a $5 dollar increase a few times a month will not keep me out of my favorite eateries. To me it sounds like an excuse by some to try and squeeze more productivity out of people already being overworked.

9 Re: Eateries ‘starving’? on Thu Apr 15, 2010 10:00 am

Miz point

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What I cannot understand is having a payroll tax.....get rid of the payroll tax and perhaps this issue of upping the minimum wage will no longer be such a big deal?


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10 Re: Eateries ‘starving’? on Thu Apr 15, 2010 10:29 am

grumpy old man

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Payroll tax does not affect most restaurants. I understand it does not kick in until $1m in payroll.

Anyhoo, this thread is not about underpaid staff in restaurants.


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It's their, they're and there; in Canada it's colour, cheque, rumour and zed...

11 Re: Eateries ‘starving’? on Thu Apr 15, 2010 10:51 am

Miz point

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Ah GOM but this thread is in a way about underpaid staff in restaurants for it is this wage hike that is needed to gain some semblance of a slightly better living allowance? Yes, the main topic is how this could affect the bottom line of a restaurant owner but why put the burden of profit-loss on the backs of the very employees who are there to ensure success of an operation? Other costs need to be examined such as food costs at the wholesale level, punitive sales taxes, horrendous prices on wine and liquor as levied by the government monopoly, exhorbitant insurance rates.....I cannot see why a small wage hike should be blamed here by any restaurateur when there are so many other costs involved in that sort of operation.

As exists within a capitalist framework, it is either sink or swim time......either one can find a way to be successfull or as was suggested to those who did not like their wages or jobs - move on and try something else. It is a tough business and my Chef hat is off to those owners who are successful and who know how to treat their loyal employees.


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12 Re: Eateries ‘starving’? on Thu Apr 15, 2010 10:56 am

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Effective January 1, 2008, employers with total remuneration in a year of $1.25 million or less are exempted (see note below).

http://www.gov.mb.ca/finance/taxation/taxes/payroll.html

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Regarding eateries having a hard time currently, I think it has more to do with our recessionary times (and people not eating out as much) than the mimimum wage.

Btw, I noticed the parking lot at 529 Wellington isn't as full as it was in the past.

13 Re: Eateries ‘starving’? on Thu Apr 15, 2010 11:07 am

grumpy old man

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Nah, this is not about underpaid staff and the burden on the poor working class. This is all about the impact a minimum wage increase has on an employer.

Feel free to start a new thread about the working poor...


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Yes, I really am that Grumpy...

It's their, they're and there; in Canada it's colour, cheque, rumour and zed...

14 Re: Eateries ‘starving’? on Thu Apr 15, 2010 11:08 am

Miz point

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That is why the rich stay rich - at least in this town - they cook their own damned steaks or invite me to dinner to do it for them! (will cook for really good libations and accolades?)


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15 Re: Eateries ‘starving’? on Thu Apr 15, 2010 11:10 am

Miz point

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grumpy old man wrote:Nah, this is not about underpaid staff and the burden on the poor working class. This is all about the impact a minimum wage increase has on an employer.

Feel free to start a new thread about the working poor...

GOM I took the time out to underline other costs affecting profitability......a fifty-cent per hour increase should not be a burden nor should it be the key burden as stated in the article....there are many more costs associated with running any business and I would love to see the numbers let us say, from private insurance carriers and how much those numbers have risen in just the last year.....I would be those numbers would be of a far higher percentage than the crappy little numbers regarding the minimum wage hikes.


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16 Re: Eateries ‘starving’? on Thu Apr 15, 2010 11:30 am

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The service industry is low paying all over , and it is time consumers pay more for the help they get .

17 Re: Eateries ‘starving’? on Thu Apr 15, 2010 12:15 pm

sputnik

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Pavolo wrote:The service industry is low paying all over , and it is time consumers pay more for the help they get .

I would be willing to pay more if I was actually getting decent service.

Giving a brain dead idiot working at a fast food restaurant a government imposed raise does not make the service levels any better.

18 Re: Eateries ‘starving’? on Thu Apr 15, 2010 12:32 pm

rosencrentz

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$10 per hour is way too much for low paying jobs!
$20,800 is above the poverty line for a single person.
Why should anyone be able to earn higher than the poverty line?
This is so unfair to employees who have to compete with the 30 cent an hour Chinese wages!


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19 Re: Eateries ‘starving’? on Thu Apr 15, 2010 12:37 pm

rosencrentz

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MizP is the greatest Gold Seal of Approval Cheferooney, whose only fault (lie) is she doesn't clean up her mess, but does send her son in to do the dirty work!! lol


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20 Re: Eateries ‘starving’? on Thu Apr 15, 2010 12:42 pm

Deank

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worse part is the negative effect this has on people close to minimum wage. Their buying power goes down everytime this happens. well all of our buying power does, but people closer to minimum are impacted more.


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21 Re: Eateries ‘starving’? on Thu Apr 15, 2010 2:28 pm

St Norberter

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But there are other additional costs that increase as a result of a minimum wage increase. Costs that the NDP so conveniently neglect to mention:

Increased CPP costs
Increased EI costs
Increased WCB premiums

Increased wage costs to those employees that you gave a merit increase to, and now need to increase again if you want them to maintain the merit increase ( or should they lose it because of minimum wage increase)?




As an aside - I'm wondering what the effect of a single $.50 increase vs. two $.25 increases would be in terms of total costs to the workplace and total additional net revenue to the government. I ask this because a few years back, WCB was granted a premium increase, however WCB decided that they would not apply the full increase at the implementation date ( ( think it was 1.5% at Oct 1), but instead did a blended rate retroactively over the year ( .75% over full year)? Anyway, I ended up doing a running comparison over the course of the year and took a $500 reduction from our year end remittance as the blended rate ended up being $500 more than the legislated increase of 1.5% at Oct due to the seasonality of our staffing. Wonder how much extra money WCB made illegally from firms that didn't check that.

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22 Re: Eateries ‘starving’? on Thu Apr 15, 2010 2:33 pm

Miz point

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It can be rather mind-boggling.


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23 Re: Eateries ‘starving’? on Thu Apr 15, 2010 2:40 pm

Deank

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"Increased wage costs to those employees that you gave a merit increase to, and now need to increase again if you want them to maintain the merit increase ( or should they lose it because of minimum wage increase)?"

when I was younger I had worked for two different companies where I was making 50 cents more then everyone else because of merit increases. One was smart enough to top everyone's wages up by the same amount as the minimum increase. The other one did not. Guess which one I left quicker?
Guess which one took more of a hit to his bottom line?


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24 Re: Eateries ‘starving’? on Thu Apr 15, 2010 2:45 pm

rosencrentz

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Those earning minimum wages, blond waitresses', earn big bucks if they work in a pub where they get tips from being good at their jobs.
Those waiters and waitresses, that do not know how to do their job, hopefully will will earn the minimum wage and then quit.


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25 Re: Eateries ‘starving’? on Thu Apr 15, 2010 3:45 pm

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Giving a brain dead idiot working at a fast food restaurant a government imposed raise does not make the service levels any better.

Funny we pay union brain dead fools alot more then any service industry worker. And they get undeserved raises too.

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