Just under two months into Alberta’s minimum wage hike, the impact is already being felt by local restaurants and bars. Sitting on the corner of Calgary’s 14th St. and 34th Ave. S.W. in is The Trop Bar & Grill – a neighborhood pub that is already facing changes with rising labor costs.
“The changes I had to make this week, increasing prices and changing the tip out for our servers [to the kitchen] … nobody’s happy about it,” said Shaun Desaulniers, owner of The Trop. “I don’t like having to increase the price on a bottle of beer every time the minimum wage goes up, but we don’t really have a choice.”
Desaulniers has been working in restaurants since he was 16, and became a professional chef after studying at SAIT. His passion for food, wine and people are what keeps him in the industry.
When he saw that his neighbourhood pub was for sale, he decided to snap up the opportunity.
“For me it doesn’t feel like work,” Desaulniers says. “It’s just life.”
Rumble Boxing, another business of Desaulniers’, has not been hit as hard as The Trop. A number of factors contribute to this, with tipping complicating the matter.
“I’m not against people making $15 an hour, it’s more expensive in our cities these days,” Desaulniers said. “There has always been a recognition that in the service industry people who make tips were paid a different rate specifically because they are making tips … they’re not making minimum wage.”
The NDP abolished the liquor server wage on Oct. 1, 2016. Before, restaurants could pay liquor servers less than minimum wage at $10.20 an hour, with tips making up the difference.
With servers now being paid $15 an hour, the same as an entry-level line cook, restaurants like The Trop are increasing server tip-out to the kitchen to decrease the pay gap.
“I bet you most the people in the industry would say we would rather be back to our serving wage and make more gratuity,” he said. “I think the government’s created a problem that’s almost irreversible.”
Trevor Roberts, a manager and bartender at The Trop, has been working in the restaurant industry for 15 years. With an increase in tip-outs, he says that the rise in pay has been negated for those in the industry. However, the tax structure might change for some people.
“You’re probably taking home the same amount because your paycheque is a little higher, but your house tip is a little higher so your tips aren’t as high as they used to be, and the government gets a little more taxes out of you,” Roberts said. “It just kind of feels like the government gets a bigger slice.”
For small business owners like Desaulniers, profit margins are small. Carolyn Davis is the Community Relations Director at Momentum – an organization that offers courses on opening small businesses. Momentum focuses on creating business models that are not only profitable, but also sustainable.
“I firmly believe that if your business model depends on your workers living in poverty, it’s time for a better business model,” said Carolyn Davis.
She states that the minimum wage increase is just, and that business models need to reflect fair living wages for minimum wage earners.
According to Statistics Canada, the demographic of minimum wage workers changed from 2017 to 2018. Minimum wage earners under 25 years of age decreased, whereas workers aged 34 to 65 increased. Desaulniers said that the wage increase will likely change his own hiring patterns at The Trop, and could decrease the opportunities for young workers with less skill sets.
“I used to hire some of my friend’s kids that were in high school or just leaving high school with no skill sets to do jobs for me,” Desaulniers said. “When I could pay them 10 or 11 dollars an hour… we could bring them in, we could train them, we could give them the opportunity. Now when I’m having to pay people $15 an hour… I’m going to look for people that have the experience because I need to get full [value] at $15 an hour.”
Restaurants Canada, a not-for-profit agency representing Canada’s food service industry, reiterates Desaulniers views. According to their website, “These entry-level opportunities will be much harder to come by if the starting wage goes up too high, too fast.” The agency recommends introducing a youth wage to encourage businesses to hire youth under the age of 19.
Desaulniers describes the current environment of the restaurant industry as being very tense. Many servers work in the restaurant industry because of its flexible hours and the instant cash it brings in. With the increase of labour costs, servers are working less hours and responsible for larger sections, which translates to more stressful conditions.
“You start reducing the amount of opportunity for them to make money, you’re going to get less people choosing those industries,” says Desaulniers. “A lot of businesses that were just getting by, you’re going to see a lot of doors close.”
Desaulniers has blunt advice for those thinking of opening up a small business.
“Don’t be a dreamer… [Minimum wage]’s making it harder and harder for people who have dreams of opening a restaurant or a mom and pop shop. It’s making it harder for those dreams to come true.”
- By Bailey Gingras-Hamilton