Minimum Wage Hike Means Restaurant Owner In Ontario Will Make LESS Than His Employees

A restaurant owner in Ontario, Canada is saying that the minimum wage hike is detrimental to his income. Stelios Dimakos, who has owned Shorty’s Grill for 11 years says the province’s minimum wage increase to $14 an hour and $12.20 for liquor servers means he will now be making a lower hourly wage than his employees.

Dimakos says that he’s always worked hard to pay his employees a fair wage, but now the consumers are going to have to foot the bill for the minimum wage hike since his take-home pay will be less than those he employees. He says he puts in about 90 hours of work per week and is the first one at his restaurant and often the last to leave so he can keep the employees paid well. “I don’t see my kids a lot of the time,” he says.

Dimakos had calculated his personal wage at roughly $12.50/hour. Overnight, the minimum wage went up to $14/hour meaning he will be making much less than those who work for him. Not only that, the wage increase will likely come out of the restaurant owner’s own salary, forcing his wages even lower. That new sum is what servers make before tips, which are often a majority of a server’s pay.

Dimakos says the minimum wage increase, combined with another planned increase to $15 and $13.05 for liquor servers on Jan. 1, 2019, will hit his bottom line by about $150,000, and he plans to raise the price of everything on the menu up to $1 to absorb the cost. “We don’t have a choice,” he says. “I don’t want to cut staff. I don’t want to cut the quality of my product, so that’s the only solution.” But prices are likely to skyrocket at restaurants even more in the future, as stifling regulations are adding to the cost of food.

“So we’ve got a 21 or 22 percent increase in wages, but what about our raw product?” he says. “Is it going to be another 10 percent increase there? That’s huge in our industry.” And it’s something to think about.

The Financial Accountability Office of Ontario, an independent watchdog, has said that the minimum wage hikes could result in a loss of 50,000 jobs, meaning instead of making the previous minimum wage, employees will now earn $0/hour. A survey of restaurant owners by Restaurants Canada found that the new minimum wage would lead 98 percent of business owners to raise prices, 97 percent to reduce labor hours, 81 percent to lay off staff, 74 percent to explore labor-saving technology (replacing people with machines) and 26 percent to close at least one location.