#minimumwageincrease

In 2023, the Washington State minimum wage increases to $15.74 per hour. In Seattle, the minimum wage is even higher. Learn more:

There has been a lot of talk recently from people who are outraged at cuts to benefits following the recent increase to minimum wage in Ontario. Blog posts and news stories such as this one here seem to be going viral, initiating conversations on sites such as Facebook and Twitter. These conversations often condemn the locations and/or entire businesses that have reduced benefits or cut things such as paid breaks.

While their disbelief and anger is understandable, this discussion is one-sided and lacking an important fact; it is not the companies themselves that have cut these things, but rather it is franchisees.

 So let’s break this down a little more and examine why this small clarification is so important. Franchise owners purchase a building and are responsible for all staff working out of their store. They have control over some decisions (such as cutting benefits) but must still follow company policies and continue to use company-approved suppliers. The franchise owner does not keep all profit that they make; along with marketing costs, they must also pay a certain fee to remain an owner of a Tim Hortons store, for instance.

 That having been said, the company gets paid regardless of whatever profit an owner does or does not make. So while it’s true that a company may be making millions, that does not apply to all franchise owners. These owners must pay their overhead, their staff, and the fee that goes to corporate. They generally also need to have some money put away for repairs and mandatory remodelling. The remaining money is their profit.

 For someone who owns multiple stores, the minimum wage may not make a significant impact on their overall earnings; they’ll still make a livable wage and manage to continue running their stores without much intervention.

 For others, the increase to minimum wage could mean having to shut down. For the people who may only own one or two stores, cutting paid breaks and reducing benefit coverage might be the only way they can continue to run their store without reducing the staff and thus reducing hours or getting rid of jobs altogether, putting more strains on the employees not only on the job but also in their personal lives if they are no longer able to pay their bills.

 I am speaking from personal experience when I say that business owners do not necessarily make as much as one might assume. I currently work at a Subway that is owned by my brother-in-law. He is the owner, but unlike many other owners he works in-store full-time. He puts in more hours and hard work than any other employee, and yet he hardly makes 50k a year. It’s true, this is nothing to scoff at. But for an owner who also has to cover any unforeseen circumstances, this is not a whole lot. If he didn’t work in-store himself, he would be making below the poverty level from the store. Now that minimum wage has increased, he’ll have to increase his managers salary to match the raise the rest of us get. While it’s still too early to say the exact impact, he will now be making less than the manager and will likely make less than while still working over 40 hours a week. With numbers like that, he’ll likely have to shut down. 

Owners such as him may own a store under a large business, but they are still small business owners. These are the people who are fighting to maintain the jobs of others while continuing to make a living wage themselves. They are doing their best to fight the major job loss that has been predicted.

 Social media provides a wonderful way to have a conversation on issues such as this, but it’s important that these conversations include all the facts so that those participating are well informed and not simply spreading false or incomplete information.