New minimum wage has food industry thinking outside the box

The provincial government’s push to bring Manitoba’s minimum wage  closer to the national average is changing the game for the food and beverage industry, affecting both foodservice and processors alike.

Last year’s 65-cent hike, bringing the minimum wage up to $14.15, has been squeezing margins for restaurant, bars, and pubs. The day-to-day challenge is only going to grow this fall when another 85-cent rise will bump it up to $15.

Such increases may not seem like much, but operators are used to seeing minimum wage rise by nickels and dimes. When you factor in the highest inflation Canada has seen in decades, Kris Kopansky, co-owner of Brazen Hall Kitchen & Brewery, says something had to give.

“Our business model must change. We don’t want to do shrinkflation,” he says. “We no longer have managers running around. Now our best wage earners have been elevated into roles where we get more productivity. That’s what I need out of people. It’s better for us in the long run. Our labour force is better now than it was six months ago,” he says.

Brazen Hall’s best servers and bartenders are taking on increased roles and responsibilities. He says he’s happy that his staff is making more money — many earn $20 to $22 an hour including tips — but restaurants are already walking a thin line.

“They deserve to make what they do because they’re good at it. My servers will open the restaurant, close the restaurant and deal with issues. They can’t just show up, make money and leave,” he says.

For Amanda Desutter, owner of Amanda Lynn Gluten Free, a Manitoba-based company that specializes in producing gluten-free products such as perogies and desserts, the wage increase affected her entire small company. “It caused an increase to our cost of business that we are working hard to counter act with back-end solutions to avoid any type of price increase,” she says.

However, the wage increase has not brought about an equal consequence of greater employee retention for her company. “It hasn’t made employees stay,” Desutter says. She has begun thinking outside-the-box. “I’ve been creating ‘total pay packages’ to supplement the increases to attract and retain employees.”

When raising wages for some employees, it has also affected wages across her company as well. “It has caused some to increase, but also causing a decreased wage gap for my leaders,” says Desutter. “The next one in October will have many more major affects as it will affect every person on my team.”

Tory McNally and the HR Consulting Team at Legacy Bowes says there are several strategies that small to medium-sized businesses may employ to help with the increased cost of business. “They can reevaluate their compensation structure, look at budgets and cut elsewhere,” she says. “Some companies have streamlined their operation schedules to reduce downtime or overtime.”

McNally also encourages owners to explore better intrinsic benefits and working conditions and culture to retain and attract employees.

There is another planned increase to minimum wage coming later this year. “Manitoba has a desire to not be the lowest minimum wage in the country so the pressure from other Canadian jurisdictions will affect decisions here. It will ebb and flow with inflation and cost of living,” says McNally. “When the media is highlighting the cost of goods, pressure to increase minimum wage will surely follow.”