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The living wage in Waterloo Region has increased to $19.95 an hour, according to the latest report from the Ontario Living Wage Network, which represents an increase of $2.75 from 2021.

 

But what impact this hike has on businesses that are certified living wage employers, or those considering a certification, continues to be weighed.

 

“It depends on the nature of the business,” says Jason Dean, Assistant Professor of Economics at King’s University College at Western, who also teaches at Wilfrid Laurier University, and notes that maximizing profits is the key focus of any business. “Any economist would tell you that profit is good in the sense it ensures as a society that our scarce resources are used efficiently, so without profit, we would not have that.”

 

However, Jason says increasing wages can be done in a way that it can boost the bottom line of a business.

 

“In principle, if you do it right, it can be a benefit to business,” he says.

 

Sabrina McGregor, Branch Manager, YNCU in Cambridge, agrees.

 

“By providing a living a wage, we’re helping reduce stress as many have struggled with increased costs,” she says. “Our employees are very important to us; we want to make sure they have the tools to thrive inside and outside of work.”

 

YNCU is one of about a dozen businesses in Cambridge that are certified with the Ontario Living Wage Network, which charges annually between $100 to $1,000 depending on the size of the private sector business. (Lower rates apply for public sector businesses and non-profits).

 

“We want all of our workers to feel empowered by their employer so they can flourish in our communities,” says Sabrina, noting taking this step helps improve health and morale within the workplace.

 

Stephanie Soulis, founder, and CEO of Little Mushroom Catering, which has provided a living wage to employees since 2017, says it’s something that has always fit nicely within her business plan.

 

“When we started out, we knew we wanted to be a socially responsible business in that paying a living wage makes sense. It fits our culture,” she says, adding she does understand why businesses with many part time workers would find it hard to justify an hourly rate of $19.95. “But I’m also one of those businesses. I have a lot of 18-year-olds who work for me and are living at home with their parents, and they still need to pay car insurance and try to save up money so they can move out.”

 

Sabrina says the minimum wage is not a living wage and providing one can help companies save on things like vacant positions, training, and recruitment.

 

“It should be helping with things like retention and talent attraction. We’d like to think it does but there is definitely a labour war going on,” says Stephanie, noting more restaurants and event companies are now paying higher wages. “In the last four or five months we’ve noticed a big shift. But even with the minimum wage being $15.50 and living wage now $19.95, there’s still that middle ground where other restaurants and event companies are going to pay a bit more than minimum wage – say around $17 – so we still have a bit of that leading edge advantage.”

 

As well as attracting more talent, she says being part of a growing network of businesses has resulted in her company being sought ought by others, both in and outside of the network.

 

“We have many companies, especially non-profits, who want to work with us because we are a living wage employer. It’s not just for talent attraction, but client attraction as well,” she says, adding that education is key before any business decides to become a certified living wage employer. “It’s about weighing the pros and the cons.”

 

 

Breaking it down

 

What is a living wage?

 

“There is no universal definition. It is essentially a poverty line with specific characteristics,” says Jason. “Generally, a living wage is the hourly wage that reflects what people would need to earn to cover the actual costs of living in their particular area. A popular definition: A living wage is a socially acceptable level of income that provides adequate coverage for necessities such as food, shelter, child services, and healthcare. The living wage standard allows for no more than 30% to be spent on rent or a mortgage and is sufficiently higher than the poverty level.”

 

Why are businesses hesitant about offering a living wage?

 

“Businesses exist solely to make profit. Which can be a good thing as this is good for society as a whole because it ensures our scarce resources (labour, land, natural resources etc.) are used efficiently which is translates into a higher standard of living,” says Jason. “Many business owners do not believe their goal is to alleviate poverty and would suggest that this is the role of the government. Moreover, most businesses that pay a non-living wage (such as the minimum wage) have narrow margins and probably would not be able to pay a living wage even if they wanted to.”

 

Can increasing the minimum wage to a living wage help alleviate poverty?

 

“Likely not,” says Jason. “It is also important to point out the following statistics from a Fraser Institute Study: 8.8% of all workers earn the minimum wage; 92.3% of minimum wage earners live in households that are above the LICO (Low Income Cutoff); most minimum wage workers are not primary breadwinners: and 53% of all minimum wage workers are between the ages of 15 and 24.”

 

What advice can you offer businesses who are considering about taking this step?

 

“It can be profitable to pay higher wages in an effort to boost productivity and reduce turnover,” says Jason. “Efficiency wages: refer to employers paying higher than the minimum wage to retain skilled workers, increase productivity, or ensure loyalty.”

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Following a barrage of pandemic lockdowns and closures, restaurants in Canada are still not out of the woods, despite the fact mask mandates have long since been lifted and life has seemingly returned to ‘normal’.

 

According to a recent report from Restaurants Canada, over the past year restaurant closures have outpaced openings by 43% and inflation-adjusted food service sales will be around 11% below 2019 levels by the end of this year. The report also indicates traffic in full-service outlets is down nine per cent, and approximately down five per cent for quick service ones. However, according to the report sales could still surpass the $100 billion mark, which is encouraging.

 

But getting to that level could be difficult say restaurant owners, taking into consideration ongoing labour shortages and supply chain issues.

 

“If I were to sum up state of the industry in one word, it would be ‘tired’, especially for independently owned and operated restaurants like my location,” says David Kroeker, owner of Zoup! on Hespeler Road in Cambridge. “It’s been a struggle and it’s kind of come in waves as well.”

 

Matt Rolleman, co-owner of Thirteen at the corner of Water and Main streets in Galt, agrees and wonders what the impact COVID-19 will have in the next few months, especially for the Christmas bookings he already has in place.

 

“In the back of my mind and for a lot of business owners in general is we’re hoping there won’t be another wave like before,” says Matt, noting he’s optimistic vaccines and boosters will lessen the severity of any potential impact. “But it might be a wave of staffing issues with staff getting sick with COVID. I think we’re still in this really precarious situation and are worried about COVID-19, even though people are treating things like it’s all back to normal.”

 

Staffing levels an issue

 

When it comes to current staffing levels, restaurants nationwide are finding that retaining staff continues to be a major hurdle. Restaurants Canada estimates the sector has had between 150,000 and 170,000 vacant positions for some time and currently employs 271,000 fewer people prior to when the pandemic hit in 2019. This has resulted in many restaurants to alter the way they operate, perhaps opening fewer days a week or closing earlier.

 

“Staffing retention is a huge thing right now that all businesses, and especially restaurants, have to look at,” says Matt. “But restaurants are pretty much drawing from a very similar pool of people and there’s all these restaurants vying for the limited staff that’s available.”

 

David agrees and says even the recent minimum wage hike to $15.50 won’t really help the situation.

 

“At the end of the day we’re not helping our employees because everyone is jacking up their prices and everything is costing more,” he says. “It’s a vicious circle.”

 

Supply chain problems

 

Like most restaurant operators, David says supply chain issues also remain a big concern. As prices on the menu increase with inflation, the number of food choices has decreased in some restaurants resulting in them offering only a few dishes on any given day to provide more predictability for the back-of-house staff.

 

“The supply chain has essentially fallen apart in my opinion,” says David. “I spend at least five to 10 hours a week just looking for alternative products so we can keep a full menu.”

 

He says customers service has remained his No. 1 priority and says it can be difficult having to explain to patrons about the challenges he faces if something they order is not available.

 

“I’m so grateful for our client base because 99% of our customers are absolutely fantastic and they get it,” says David, adding the solution needs to come from all levels of government, especially when it comes to custom issues at the border.

 

“At our distribution centre there is so much backlog right now they have to make reservations for trucks to show up to receive goods,” he says, noting the Bank of Canada’s decision to increase the prime lending rate to combat rising inflation and the Province of Ontario’s minimum wage increase are working against businesses.

“It’s different levels of government not working together, and they are actually impacting the long-term situation in Ontario,” says David.

 

Impacted by loans

 

Like many restaurant operators, both he and Matt utilized the Canada Emergency Business Account during COVID-19 and while that may have assisted during the cycle of lockdowns and re-openings, they worry about the overall financial impact.

 

“We took on some stuff that we never would have done before,” says Matt, adding business was ‘rolling’ before the pandemic. “I had never planned on taking those extra loans. There’s a lot of businesses that have taken on loans so hopefully when winter hits we don’t see a big recession because it’s going to be hard on a lot of businesses.”

 

He says having Main Street closed to traffic during the summer was great for his outdoor patio and is optimistic that come next year people will continue to look at staying closer home due to higher costs.

 

However, Matt expects that people’s dining habits will change.

 

“Restaurants are a luxury. I’m anticipating that people who dine out once a week may switch to once a month, and those who come once a month might switch to once every two or three months,” he says, adding there is little that restaurant operators can do when it comes to combatting supply chain issues and rising interest rates. “It’s a little daunting for sure.”

 

  •  With files from Troy Media
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The ability for businesses to be flexible and creative is pivotal when it comes to finding ways to combat ongoing labour shortages, say local employment experts.

 

“Those who can bend will find they can sustain themselves and grow and those who will not bend, I think they’re going to find it very difficult to maintain their productivity and business size,” says Charlene Hofbauer, Executive Director of Workforce Planning Board of Waterloo Wellington Dufferin. “I think growth will be a real challenge for them.”

 

Her organization promotes workforce development by working with the community to address issues surrounding labour market trends, such as the apparent disconnect between job seekers and potential employers.

 

“The longer we go through this (pandemic), the more I think we’ve entered a workers’ market,” says Charlene, noting many local employers are struggling to find employees. “There isn’t an industry right now that isn’t hiring.”

 

Although the unemployment rate recently dropped in Waterloo Region to 5.2%, she says there exists a ‘small pool’ of talent for jobs that are very specialized. And as of Dec. 3, just over 5,400 jobs remained vacant in our region, approximately 1,500 of those in Cambridge.

 

“That’s a lot of jobs,” says Charlene, noting poaching employees becomes an issue for those seeking specific talent.

 

She says there is a big need for frontline employees in industries that often rely on short term trained workers – including restaurants, manufacturers, healthcare, and construction.

 

“But our tech and engineering firms are desperate for more senior talent,” says Charlene, adding those with seven years or more of experience are in high demand right now. “They can easily find a junior person, but they can’t find a senior person.”

 

When it comes to finding talent, she recommends employers look at other avenues, rather than the more traditional ways they’ve relied on in the past.

 

“Even temp agencies are struggling to have a decent size pool of talent right now,” says Charlene, adding her organization can connect employers with potential sources that can aide in their search. “We can connect you to whoever we can think of that’s local to you and can work to connect you to a bigger network.”

 

Among these connections is Employment Services - YMCA of Three Rivers Waterloo Region, which can introduce employers to talent by utilizing mentorships, job shadowing and financial incentives providing they are willing to engage in on-the-job training.

 

“It’s critical to reduce the number of resumes that an employer will be looking at on a weekly basis,” says Van Malatches, Supervisor of Employment Services – YMCA of Three Rivers Waterloo Region, noting many companies are receiving between 25 to 200 resumes every week. “I don’t know how many employers have the patience to engage in that.”

 

He says his organization can help employers ease that burden by connecting them to viable candidates.

 

“We have a pretty good feeling of who we are referring and often have worked with that candidate from three days at the least, to three months at the most,” says Van. 

 

He believes employers who concentrate on the ‘soft skills’ and can provide training will have an easier time finding people, especially when it comes to hiring newcomers, rather than an employer who is simply looking for a ‘body’ to fill a position.

 

“Newcomers don’t want to be taken advantage of and want to have that opportunity. It’s understanding the cultural shock the newcomer may be facing, and being patient with that,” says Van, adding being authentic in their approach to acknowledging the issues a newcomer is facing will go a long way. “For a newcomer, they are so vulnerable with the experience and cultural changes they are facing. If an employer steps up for them, that’s what’s going to keep the retention and longevity.”

 

In general, Van says employers who can be more accommodating, not to the point where it’s compromising their business, will be successful at attracting and retaining employees.

 

“There is a lot of different nuances out there that have contributed to people ghosting employers because other options are coming up,” he says, adding transportation and childcare issues can play roles in the decision to changing jobs.

 

Given the opportunity, Van says he would like to see employers in various sectors work collaboratively when it comes to sharing potential talent.

 

“I would like to see those resumes pooled together somewhere where everybody could have access to them,” he says, adding the creation of a central ‘hub’ - taking confidentiality into consideration – would be beneficial to the overall job market.

 

As well, Charlene says connecting with local post-secondary institutions is another avenue employers can take when searching for talent and that even providing summer placements to high school students can also set the stage for future growth.

 

She believes a ‘multi-pillar’ approach is the best to solve our current labour shortage.

“We’ve got to do many different things,” says Charlene. “We can’t rely on any one thing as our solution.”

 

For more, visit https://www.workforceplanningboard.com or https://www.ymcacambridgekw.ca/en/index.asp

 

In terms of advice, Charlene says employers should consider the following:

 

1.  Check what you are paying. “When it comes to those key roles you’re stuck on and hire consistently for, know where you stand,” she says, adding local job boards can offer a great snapshot. “Figure out where you are on the spectrum for that job and know what ground you have to make up. And if you’re already paying well, maybe there’s something in the background you have to look at.”

 

2. Look at your job posting. “We’re seeing many job seekers who won’t apply because the posting is without any basic information,” she says. “Where is your company? What are the hours? What is the pay? What does the job look like? You would be surprised how many postings don’t answer these four basic things, so people don’t apply. I think what job seekers are looking for now from potential employers is openness, honesty and that transparency.”

 

3. Look at who is not coming through your door. “Be really honest with yourself. If you never see any women or newcomers apply, why is that? Who can you connect with so you can start seeing these applicants? There are so many local groups you can connect with.”

 

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An ongoing labour shortage continues to hamper Canada’s economic recovery in wake of the pandemic.

 

In fact, recent research published by the Business Development Bank of Canada (BDC) indicates that 64% of Canadian business says labour shortages are limiting their growth.

 

The BDC also reports that 55% of Canadian entrepreneurs are struggling to hire the workers they need and as a result, must now work longer hours themselves and delay or even refuse orders they can’t fill. As well, more than a quarter say they are having a difficult time even retaining current employees.

 

This news doesn’t come as a surprise to Mike Jennings, President of the Cambridge-based digital marketing agency MoreSALES, who has been keeping close tabs on the latest trends as employers in all sectors deal with continued labour shortages.

 

“The whole interview process is reversed right now. People aren’t coming in to interview for a job, they’re interviewing the company to see if they get to hire them or not,” he says, adding those in the skilled labour category are in very high demand.

 

According to CPA (Chartered Professional Accountants) Canada, Canadians in general have changed throughout the pandemic. While some decided being locked out of work provided them with the ideal motive to retire, at least 20% of the thousands who lost their jobs have changed sectors looking for work in places that not only may pay more but provide them with opportunities for advancement.

 

“A lot has to do with the culture of the company,” says Mike, noting surveys targeting millennials shows that flexibility at work and potential opportunities for nurturing and advancement tops wage expectations in terms of importance. “I think the smarter companies get it and those that are smart hire well will do well.”

 

He says more flexibility in terms of hours and the ability to work from home is key when it comes to attracting new talent, especially parents looking to return to the workforce following paternal leaves.

 

However, Mike knows this isn’t always the case for many companies, especially those in the manufacturing sector.

 

“If you’re a machine shop you can’t be all that flexible with your hours,” he says, adding in this case having an up-to-date website is vital since potential talent will do their research before submitting a resume. “If you’re thinking of working for a company that’s progressive and is going to pay well, you’re going to look at their website. But if that website hasn’t been touched in years and there is nothing about the employment situation or the culture of the company, then you’ve got a problem.”

 

As well, while social media is a great way to promote your company or business and attract potential talent, Mike encourages companies to be very strategic in their approach.

 

“It really depends on the company. If you’re a B2B company, I wouldn’t waste a lot of time on Instagram or Facebook,” he says. “I would focus more on LinkedIn or YouTube video clips outlining what the working environment is like at your company.”

 

He says connecting your staff on LinkedIn is a great way for potential employees to get a ‘sneak peek’ at your workplace.

 

“It will give them a sense of what kind of people they could be working with,” says Mike.

 

Visit https://moresales.ca to learn more.

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First you have the Provincial Government with Bill 148 and then you add what our Federal Government wants to do regarding taxes and in reality it just adds up to a nightmare for small businesses. Greg explains in this weeks' 'The City'.

 

 

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Big increases to minimum wage are becoming fashionable in Canada: first Alberta (from $12.20 currently to $15 in October 2018), then B.C. (from $10.35 to $11.35 in September 2017) and now Ontario (from $11.40 to $15.00 in January 2019, a 30% hike in 18 months). Are workers better off or does it mean fewer jobs?


The debate has been ferocious because economists don’t agree, but let’s look at the fundamentals. The government accepts that carbon taxes are effective at reducing emissions because if you make something more expensive, people will use less of it. We agree, but the same logic must apply to wages. And, actually, a business owner faced with the rising cost of an input (labour) has three options:

  • Absorb the added cost out of her profit margin
  • Raise prices
  • Reduce use of labour by substituting in morecapital or simply making do with less work

Let’s take these in order. Some businesses are so spectacularly profitable that owners can just absorb rising labour costs. But Apple and Microsoft don’t use minimum wage labour. If we look at profit margin by industry, the biggest users of minimum wage labour are in retail and food service, with razor thin (below 3%) margins. There is very little room to absorb these costs, and if a business is not profitable, there is not much point in keeping it going.


What about raising prices? The critical ingredient in business success is getting the right price point for your market. One restauranteur told us that the lunch menu in her neighborhood has to be $5-$8, any higher means flirting with disaster. In retail, the competition is with online giants, like Amazon. Often, there is no room to raise prices without driving away customers.


The third option to cope with rising wages is making do with less staff. This is controversial because many studies show that minimum wage can be increased without a corresponding rise in unemployment.

 

That’s why the recent Seattle study produced such a bombshell. Washington state collects detailed data on hours worked and it showed how part time workers with irregular schedules are cut back. Seattle’s minimum wage hike reduced the total hours worked by the low-wage workforce by about 9% while raising their wages by only about 3%. The net loss to workers was an average of $125 a month. This is a big, immediate hit to the most vulnerable workers.


In the long-term, minimum wage hikes can also drive labour-saving capital investment. The former CEO of McDonald’s told Forbes, “demands for a much higher minimum wage would force businesses with small profit margins to replace full-service employees with costly investments in self-service alternatives.” At the time, labour groups accused business owners of crying wolf. McDonald’s is now rolling out touchscreen selfservice kiosks across Canada and the U.S.

 

There is some evidence that modest increases in minimum wage can be done without disrupting labour markets, but governments have to be cautious about hurting competiveness. Previously, I had said there are three options to deal with rising costs, but there is actually a fourth and a fifth option: shut down or move to a different jurisdiction. Let’s provide input to the Government of Ontario to prevent this from happening. The Ontario Chamber of Commerce has
done some great work on this issue and has a report that can be viewed here.

 

For more information, please contact:

Hendrik Brakel

Senior Director, Economic, Financial & Tax Policy

613.238.4000 (284) | [email protected]

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The Liberal government wants to introduce a minimum wage increase to $15 dollars an hour by 2019. This isn't a move that best helps the people of Ontario nor is it the right move. Funny enough... These newly reformed labour laws won't fully come into effect until AFTER the provincial election is over with. Is it about helping the people of this province? Or is it a move for someone to keep their Premier job?

 

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