British Columbia·Q & A

$15 minimum wage won't work for restaurants, says industry CEO

After Seattle and Los Angeles both introduced a $15 minimum wage legislation, some are asking if B.C. should follow suite. The CEO says if it does, it may spell the end of the restaurant industry.

Ian Tostenson says the restaurant industry won’t survive significant raise to labour costs

Ian Tostenson says the restaurant industry would suffer if a $15 minimum wage structure was brought to B.C. (Getty Images/Hero Images)

B.C.'s neighbours to the south and east have both made significant steps towards increasing the minimum wage to $15 dollars.

Seattle and Los Angeles both introduced legislation to increase their lowest wages, while Alberta premier Rachel Notley has promised the same by 2018.

This has led to a push for B.C. to follow suit with a similar minimum wage structure. Ian Tostenson, president and CEO of the  BC Restaurant and Foodservices Association says if that were to happen, it could have a devastating effect on the province's restaurant industry.

Tostenson spoke about it with the Early Edition's Stephen Quinn.

What's your position on raising the minimum wage to 15 dollars?

I think we'd all love everyone to be paid more, but there's a difference for restaurants versus retailers.

First off, a lot of the serving staff in restaurants would tell you, they don't care about their wage — they work for the tips. If you look at what their real earnings are, they could be approaching over $18 per hour.

The other thing that's happening right now is there's a natural upward pressure on the back of the house in the restaurant because of labour shortages in kitchens so employers are having to pay more.

Don't forget those kitchen helpers are part of the tip pool. When you tip your server, they don't get 100 per cent of it. I think the restaurant model is quite good when it comes to fair compensation.

We spoke to Nick Hanauer, a Seattle venture capitalist pushing for higher wages across the U-S. He disagrees with think tanks like the Fraser Institute who say an increased wage will hurt jobs and industry.

How do you respond to his argument that raising the wage doesn't stop the industry from growing?

The difference in Seattle is significant because their cost of liquor and food is way different than here. A typical restaurant in B.C. has a 30 per cent cost of labour. If you were to increase that to 40 per cent, the question is how does that small business now adjust for that extra cost?

When you compare Seattle to Vancouver, they're really targeting larger companies that have the capacity to be able to do that.

Are you saying that if  B.C. considers a minimum wage in this province it should not apply to tipped employees?

Yes. Right now tipped employees get a lesser minimum wage per hour than non-tipped employees. We polled the industry and the ministry and they were fine with that.

A business owner told me his tipped employees will cash their cheques five-at-a-time because they're not that important to them. What they want are the tips.

This interview has been condensed and edited. 


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