$14 an hour minimum wage helping – and hurting

Minimum wage earner Natalie Malheiro hopes to start a business with the increase she received on her paycheck, which began on Jan. 1st. Troy Shantz

Troy Shantz

Natalie Malheiro is a barista whose hourly wage rose to $14 last week. The Blackwater Coffee Co. employee said the extra money will help her save for a business she hopes to start.

“Imagine what I can do with $14?” she said. “I find it exciting.”

Down the street, Eric Parsons, the owner of two Coffee Culture franchises, said the wage hike is forcing him to make tough choices.

“We have to reduce anything from five to 10 hours a day,” he said while filling busy lunch orders at the Lochiel Street outlet.

“We’ve reduced five hours by laying somebody off (and) I’m working an additional three to four hours.”

The Ontario minimum wage rose to $14 from $11.60 an hour on Jan. 1, and will climb again to $15 in 2019.

While low-income earners are enjoying the relief of extra jingle in their pockets, the Bank of Canada warns Ontario’s 32% wage hike could wipe out 60,000 jobs by next year.

Parsons said Coffee Culture might have to lay off four of its 45 employees. He has already reduced hours of operation and increased prices by 20%.

And he’s tied on an apron to fill in the manpower gaps.

“I’ve invested half a million dollars between the two stores and now I’m working 12 to 14 hours a day,” he said.

Bruce Hein is the owner of Express Employment Professionals, a Sarnia job agency. He believes the rapid rise of the minimum wage will “make or break” some local businesses, especially in food and retail.

“We’ve been preparing for this for four or five months,” he said.

“If all of a sudden your cost has gone up … you’re saying, ‘How do I manage that and remain profitable?’”

Rafi Parveen has been an employee at Blackwater Coffee for 11 years.

She’s directing her extra income toward a down payment on a house. But she added she understands higher business costs don’t help Blackwater owner Dave Duguay.

“I see both sides,” Parveen said. “Obviously I feel bad for Dave, because he’s going to lose money, but being a worker I think it’s a good idea.”

Duguay said he was forced to increase prices 30% at the downtown cafe. That has resulted in some blowback but he believes most customers understand what’s going on.

“We’ve got a premium product which calls for a higher price anyway,” he said.

“We’ve built that reputation people trust.”