Minimum wage hike stretching small business owners thin

For Paul Shufelt, who has 25 full-time employees, the bulk of his earnings go to salaries. Every two weeks, he cuts a $20,000 cheque for wages, a number that will rise significantly every year until 2018, when minimum wage hits $15.

'Some of the smaller guys are asking themselves, 'is this really worth it?' says restaurant owner

Goldie Hazrah, owner of a downtown Ricky’s All Day Grill, says rising food prices and wages are making margins tight. (CBC)

It's something restaurant owner Paul Shufelt doesn't mind doing, rolling up his sleeves to help his kitchen staff hard at work on the line.  

The longtime chef, formerly a business partner and executive chef of the Century Hospitality Group, is now the owner of the Workshop Eatery in southwest Edmonton.

During a busy lunch, you'll find him churning out one fresh dish after another.  

Whether it's his kimchi BBQ pork lettuce wraps, or his potato and ricotta stuffed perogies the food is all local, and he's been pleasing palates since the beginning of November.   

"It's sort of been 10 months in the making and it's been exciting to see the doors open, sort of see that dream come to reality," Shufelt said.

But his dream hasn't come without challenges. Despite a good opening holiday season, Shufelt said the rising minimum wage is going to mean the difference between making it or breaking it for many small businesses.

"You're looking for ways to cut costs anyway you can and then on top of that you've added anywhere from a $1.50 to a couple bucks an hour, per person to your payroll."

For Shufelt, who has 25 full-time employees, that means a bulk of his earnings are going to maintain wages. Every two weeks, he cuts a $20,000 cheque for his employees.

He says that number is only going to rise every year from now until 2018, when the minimum wage rises to $15 an hour.

'I had a great December'

"I had a great December, but I've already had a conversation this morning with my daytime staff saying, 'Hey, the first couple of weeks of January are slow here, I might need to send you guys home and I'll finish up lunch.'"

Downtown, it's the same story for Ricky's All Day Grill owner Goldie Hazrah.  

On most days, you'll find the bubbly restaurateur greeting customers, bringing out orders and doing whatever she can to keep things running smoothly.

The minimum wage increase, along with rising operating costs, means her margins are tighter.

"It's a big amount to actually come up with, and your labour is going high, and as I said the produce is going up too, so you somehow you have to manage."

One way Hazrah and Shufelt are managing is by cutting back hours. That's been the solution for many businesses in order to make ends meet.

Diane McNeil, one of Hazrah's longtime employees, is seeing it first hand.  

'It's a challenge for sure'

She makes $10.70 an hour, but what she and others in the serving industry have noticed is that it's stretching some of their bosses thin.

"A lot of employers are letting people go or cutting their hours back because they can't afford to keep them. I get it on both sides. It's a challenge for sure, " McNeil said.

But both Hazrah and Shufelt agree something eventually is going to give.

Like many small business owners, they think the government should hit the pause button on its minimum wage rollout, especially right now when times are tough.

Shufelt said while it isn't panic-button time in Edmonton yet, he's hearing otherwise from colleagues in Calgary.

"Some of the smaller guys are asking themselves, 'Is this really worth it?' and 'Is it time to hit the eject button?', which is scary.

"I mean then you're not just talking about people losing a couple of hours here and there," he said. "Then you're talking about 20, or 25, or 50 employees out of work."