Alberta’s minimum wage will rise to $13.60 per hour on Oct. 1, a move that has local restaurant owners feeling the pinch.
This is the second of three staged minimum wage increases, with the last taking place next October when wages will reach $15 per hour.
Antonio Saporito, owner of Nello’s, says the first increase was small, but fears each increase will only hurt independent restaurants in St. Albert.
“My fixed costs have become $24,000 to $26,000 more a year just because of minimum wage so far,” he says.
Last year the first staged wage increase took place, raising minimum wage from $10.20 per hour to $12.20 per hour.
Prior to the changes servers were paid a lower wage, called the liquor server rate, since servers are paid tips while working. In 2015 the rate was $9.20.
Last year the rate was eliminated, paying servers the same general minimum wage as most employees in the retail business.
Nello’s is a family-owned restaurant that opened in 2006 and currently has just under 20 employees. Saporito says labour is just one of the many costs that go into running a restaurant.
Unfixed costs – costs that change regularly – include groceries, which fluctuate based on market value of the food.
“For example, celery is $20 per case. Come wintertime when it’s November, we’re paying $80 a case and that goes with most produce,” he says. “Groceries are very much dictated by market price.”
Nello’s will raise their prices for the first time in seven years. Prices will go up this October by around four per cent, adding an additional 40 to 90 cents on food items.
“It’s sounds minimal, but it’s the only thing I can do without making drastic changes,” he says. “But that little bit adds up. Not enough to cover the downfall but enough to keep my own for a while.”
Paul Ballach, owner of The Bourbon Room, says increasing minimum wage to $15 per hour will only lead to further staff reductions at his restaurant.
“There are going to have to be, and I’ve already forewarned them on that,” he says. “For that price range and the tips they make, now you have waitresses and bartenders that are going to make $30 an hour.”
Ballach says the restaurant will have to train employees to complete multiple jobs, such as bartending, cooking and serving, since the business won’t have enough money to hire new employees.
“It’s lots (of stress), my cook just left two days ago to go onto another job and for higher paying money and more hours, so now I have to cook,” he says. “We’re just a small ma and pa operation. We’re not a big huge franchise so we don’t have lots of support. We have ourselves and that’s about it.”
He says last year the restaurant was hit heavily by increases to minimum wage, increases in taxes on beer and liquor and increases in food costs. As a result the establishment pulled back in advertising and entertainment.
The Bourbon Room opened in 2013 and currently has around 12 employees.
Ballach says since last year’s wage increase The Bourbon Room has had to raise food prices around 10 per cent to keep up with costs.
Marie Renaud, NDP MLA for St. Albert, says the staged minimum wage increases are designed to help Albertans who are struggling financially.
“This is about supporting Albertans, so supporting their jobs. But also supporting them so that they can earn a living and not be forced to live in poverty,” she says.
Renaud says there are 300,000 Albertans that earn minimum wage, with the majority being women who are trying to raise a family.
“This is allowing people who are not earning a lot of money, it allows them some dignity and allows them to provide for their family.”