From minimum wage to living wage

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From minimum wage to living wage

In Ontario, more and more companies and organizations are offering living wages, calculated to reflect the cost of living.

Toronto's Sugarmoon Lounge is a living wage employer.

When you arrive at the Sugarmoon Lounge on Danforth Avenue in East Toronto, it's one of the first things you notice. The poster is prominently displayed.

The company is certified as a living wage employer. The beauty salon has been offering a salary of just over $22 an hour for nearly two years.

The decision to increasing wages was taken in the midst of a pandemic to encourage the return to work after the first confinement. A way to value and motivate employees.

A living wage is a salary calculated according to the cost of living taking into account the main expenses for a resident of a given city or region: housing, child care, transportation and food, for example. It is generally above the minimum wage.

In Toronto, for example, it currently stands at $22.08, compared to the minimum wage of 15.50 $ per hour. In Ottawa, it is $18.60. In Thunder Bay it is $16.30. It will be reassessed next month.

The idea is to allow people to live with dignity taking into account the economic particularities of their municipality.

Some employers see it as a way to recruit or retain employees and as a way to move towards greater social justice.

Those are roughly the three quarters of Sugarmoon employees who saw their salaries increase overnight. Sixteen employees out of twenty. The others were already making over $22 an hour.

Employees saw nothing but benefits. No privileges have been taken away from them. For example, staff were able to continue to receive tips.

Madison Vesey got a overnight salary increase since his employer decided to offer a living wage to all his employees.

“I was able to pay off my college debts. You don't have extra money, but you can take public transit, live a little, buy groceries. These are small things. I can have unlimited data on my phone, I can go to a restaurant once in a while, that sort of thing.

—Madison Vesey, Esthetician at Toronto's Sugarmoon Salon

It was therefore the salon that collected the increase, without passing it on to customers. A choice assumed by the owner to try to compensate for the repercussions suffered by employees of the beauty industry during the pandemic.

“Our employees are our most important investment. We want to make sure we take care of them and support them as best we can.

— Aishwitha Moily, HR Manager, Sugarmoon Lounge

The Barque Smokehouse restaurant, west of downtown Toronto, raised employee wages in May to earn its certification as a living wage employer.

To achieve this, the owner, David Neinstein, still raised his prices on the menu. It is therefore the customers, in this case, who absorb the salary increase and the health and dental insurance plans that employees now benefit from.

On the other hand, customers no longer have to leave a tip. This is the balance chosen by David Neinstein, who believes that in the end the customer does not pay more than before.

A leaflet explaining the new compensation formula for employees at the Barque restaurant sits on every table in the store.

This is a model that David had been considering implementing for years. But so far, his employees have not been willing to drop the tipping formula. It was the pandemic that turned everything upside down.

“Black Lives Matter, the war in Ukraine, anger over residential schools…the need of social justice convinced employees to adopt a living wage.

—David Neinstein, owner of Toronto's Barque Smokehouse restaurant

In Toronto, of the approximately 50 organizations certified with the Living Wage Network of Ontario, only 3 are restaurants. industry workers hold back employers and employees.

Not all employers have the leeway to increase their payroll. And employees don't necessarily want to reduce their tips.

This is the case at Le Baratin restaurant in Toronto, where servers earn $16 an hour, plus tips, and have recently benefited from a health benefit plan.

The wait staff here averages around $35 an hour, including tips and wages. Explain to a waiter that it will go to $22… Good luck finding staff, in my opinion. All the people who work in the dining room work for tips. Everyone knows it, explains owner Pascal Vernhes.

Camille Dietrich is waitress at Le Baratin restaurant.

“Here is why we stay. Because it is very busy and we can live off it. With tips, of course. On the other hand, it shouldn't be up to customers to pay our salary, but at the same time, it allows restaurants to live properly, and for us, for now, it's working. »

— Camille Dietrich, waitress at Le Baratin restaurant

According to the Ontario Living Wage Network, living wage is becoming an avenue increasingly considered by employers. To facilitate the retention and recruitment of employees in a context of labor shortage. For the sake of taking better care of its staff.

And the pandemic would have greatly contributed to this momentum.

In fact, the Network had 167 certified employers in March 2020. It now has around 500. And this, in all fields.

From landscaping companies to microbreweries. Cleaning services to the public sector; municipalities like Cambridge and Kingston have even followed suit. There are also non-profit organizations.

Movements similar to that of Ontario are settling in the west of the country. In Quebec, IRIS, the Institute for Socioeconomic Research and Information, has been interested in living wages for a few years. The researcher Minh Nguyen notices a growing interest in the concept on the part of employers, even if it remains marginal.

“There are more and more employers who are calling us at IRIS to ask what is a living wage for this or that locality. It's a way for them to attract labor and keep it afterwards. It is something that is coming. This is something that happens naturally with the high number of unfilled positions in the job market.

—Minh Nguyen, Associate Researcher at the Socioeconomic Research and Information Institute

But is this realistic after a pandemic that is extremely difficult on the finances of many companies, with inflation and with the increase in the cost of living? Is a living wage a possible avenue for organisations?

IRIS proposes that governments subsidize the difference between the minimum wage and the living wage for a few years, while the economy adjusts.

What happens when poorer workers spend? They don't save money. It is not money that is passive. It is money they spend in the economy. And when they spend, it's in local businesses. It is in the same businesses that will have to raise the minimum wage.

—Minh Nguyen, associate researcher at the Institute of Socioeconomic Research and Information

< p class="e-p">A way to rebalance the economy, according to him.

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