In Ontario in an effort to get re-elected the premier is set to raise the minimum wage to $14 an hour on January 1st then to $15 a year later at the beginning of 2019.
Now for people who work in retail or other service related jobs where there is no gratuities involved this is a good idea. Most of these jobs are part time at best where the most hours they get is 20-25 hours a week. This will help these people out who are eking out a living at best.
But for the waiter who thinks now his hourly wage will jump from $9.90 an hour to $15 in just over 18 months they are going to make more money may want to hold back on their excitement.
First of all the reason waiters and bartenders make less than minimum wage is because they earn gratuities. In every place that I have worked a certain percentage of these gratuities are paid out to the house so that the cooks, busboys, and hostesses can get paid out along with their higher hourly wage. It stands to reason they deserve a fair share for all the hard work they do.
To have waiters and bartenders work at less than minimum wage the payroll remains at low levels for restaurants and they can keep cooks and other staff at an affordable hourly wage.
So let’s say a cook gets $15 an hour. If all of a sudden a waiter is making the same wage would he not be soon asking for $20? You wouldn’t be hiring a cook at $15 an hour anymore would you? Add the busboys and hostesses into the mix and now they are working for $15 an hour.
Who is going to suffer from this wage increase? Well at first glance it looks like there is nothing the operator can do but raise the prices of the items on the menu. How will that affect the waiters and bartenders? Well it might mean less people will come and eat at your restaurant because a threshold has been reached. Some people will still come to eat but maybe less often or not at all. It could as well mean that people may become stingier and tip less.
The biggest I see though and it will occur is the owner will now say to the waiter since you are making more money per hour now you have to pay out more to the house on your sales so that the cooks will get more cash gratuities in their pocket which will keep them motivated. Also the hostesses and busboys.
Let’s say you tip out 3% now that is $30 on sales of $1000. Double that to %6 and that is now $60. Now let’s say you make 15% on your sales which would be $150. Subtract $60 from that and you have not even made a $100 for the night.
Sure you could say now you make $15 an hour but all that will do is add more deductions to your pay check. So how far ahead will you be? The owner may turn around and hire more part time staff and your cut time will be earlier than usual. So the additional money per hour will be all wiped out rather than have you work 5 hours maybe now it will be cut to 3.5 hours.
What I am saying is the restaurant association here in Ontario is not very happy about this. To have wages increase by almost 50% in a year in a half is going to close a lot of restaurants. Sure the high end will survive and the big brand name restaurants but the waiters and bartenders will get the short end of the stick if this goes through. Especially the waiters since some of that tip out goes to the bartender as well.
The premier is now doing open hearing across the province to get some input from people who are real concerned about this raise in minimum wage. She is getting some heat. She wants to be re-elected.
Personally for the restaurant owner’s sake, service staff, and the guest having to fork out higher menu prices keep it the way it is right now. Sure give the waiters 50 cents more a year hourly to keep up with inflation but leave it as is. If not there will be no one who will want to work in a restaurant anymore. For the waiter it will not be worth it.