by SUSAN MANN
Ontario’s plan to raise the minimum wage by 75 cents per hour June 1 will cost jobs in farming and cause farmers to possibly stop growing many labour intensive crops, says Ontario Federation of Agriculture president Mark Wales.
Ontario Premier Kathleen Wynne and Labour Minister Yasir Naqvi announced the wage increase Thursday.
The current provincial minimum wage of $10.25 per hour has been in place since 2010. With the rate going up to $11 per hour, Ontario will be tied with Nunavut for the highest minimum wage in Canada. Quebec’s rate of $10.15 per hour and Manitoba’s rate of $10.45 per hour are significantly lower.
Ontario also has higher rates than many competing American jurisdictions. Wales says the U.S. minimum wage rate is $7.25 per hour but individual states don’t have to follow that. Less than half the states have rates above their federal minimum wage, he notes.
Back in Ontario, the end result will be fewer jobs at the farm level, Wales says, adding that’s particularly true for agricultural sectors, such as horticulture, that traditionally hire the largest number of employees.
Wales says farm groups reminded the government that Ontario’s horticultural industry operates in an environment where it is in direct competition with countries that either don’t have minimum wages or have wage rates far below the province’s rate.
“We’re not able to pass any increase in minimum wage to those who are buying our product because we are absolute price takers,” he says. The main buyers, “chain” stores, want the lowest possible price and don’t take into account the farmer’s cost of production. The stores will buy from other countries if the price is right. “They simply don’t care.”
The wage hike will motivate farmers to reconsider their labour intensive crops. “First they’ll look to mechanize,” he says. But most fruits and vegetables that can withstand mechanized production have already gone that route. So that means farmers will switch to crops that don’t require them to hire people, he says.
“By and large a lot of horticultural crops don’t lend themselves to mechanization,” Wales explains. “It’s very hard to mechanize strawberry or pepper picking.”
It will also trigger increased amounts that employers will have to pay for their workers’ Canada Pension, employment insurance and Workplace Safety and Insurance Board premiums, along with employer health taxes. Taking all those fees into account along with the 75 cents per hour wage increase, that amounts to a 10 per cent increase, Wales says.
The wage increase will also make the processing industry less competitive, he notes.
Plamen Petkov, Canadian Federation of Independent Business vice president for Ontario, says any time the minimum wage goes up it puts pressure on all wages. “We are really concerned this might have a snowball effect.”
Farm businesses that already pay above minimum wages to “stay competitive” will face intense pressure to raise wages too, he says.
In a report released Monday, the provincial Minimum Wage Advisory Panel recommended the province raise the rate annually based on the same percentage as the Consumer Price Index (CPI) gains. But Petkov says they don’t understand why the government decided to add three years worth of Consumer Price Index gains (beginning at 2010, the last time the minimum wage was updated) to come up with the $11 per hour.
Ray Duc, chair of the Ontario Fruit and Vegetable Growers Association, says “we’re very disappointed in the announcement. Even the current wage was a bit of a challenge for us.”
Duc says the increase will take a lot of money out of the industry. They’ve requested a meeting with Wynne to discuss the rate. “I don’t think there’s much chance of changing it now.” But the industry is proposing there should be a separate rate for agriculture of $10.25 per hour and then the CPI percentage could be added on that amount the following year. BF
Comments
75cents an hour for a 40 hour week equates to $30.00 per week .
Most peoples hydro bills have and will continue to go up more than .
Some one needs to get their head out of the sand .
what does rising hydro rates have to do with employers?
Ask Heinz, Kelloggs, Ford Talbotville, Westcast Strathroy plus all the other Ontario businesses who recently received letters from NY state enticing them with electricity prices half of Ontario's . In fact, some of the NY power was probably sold to the U.S. for a quarter of what we had to pay wind companies to produce it.
Thinking like that is why Canada is in this shape. What kind of question is that ?
Doesn,t Employers don,t have to pay anything but a wage? Must be an Employee writing that letter.
Maybe you need a new business plan if min. wage is too high. How many would like too try and live on $400 week gross
I'm a farmer, but my comment is addressed to all business owners. If you can't afford to pay the $11 min wage I think you need a new business model. We have always paid more than the minimum, even to summer students. In this day and age $11 could almost be considered slave wages.
If the federal government hadn't intervened to force dairy farmers to sell milk for mozzarella cheese to frozen pizza makers at the world price, frozen pizza makers wouldn't be able to afford $11 in wages.
Secondly, even with the voluntary roll-back in mozzarella cheese prices to fresh pizza makers offered by the dairy industry, they are still paying far-more than frozen pizza makers for cheese, and, therefore, are being forced, by supply management, into a business model which doesn't help them pay even $11 per hour.
Thirdly, and this one is almost too-obvious to mention, there's always a need to increase the minimum wage to give consumers more ability to pay the rip-off prices dairy and poultry farmers force them to pay for products produced by supply management.
Therefore, agriculture, thanks to supply management, is a significant cause of the minimum wage paradox, and for any of us to claim that $11/hr is slave wages, and not admit we're the ones who are effectively the cause of, or at least a significant contributor to, this "slavery", is a double-standard on our part.
Stephen Thompson, Clinton ON
Farming is a paradoxical industry where many owners work long hours and despite their risk and large investments don't earn minimum wage themselves. SM does allow a return to legitimate expenses.
In some of your posts you have argued that there really isn't much of a future for non-SM farming in Ont. You also argue that there is no future for SM farming in Ont. How's that for a paradox?
Please folks could you open your eyes . The consumer does not care about food as long as it is available . The public has a new target . It is the fact that agriculture is making all this money producing hydro at scalper/theif rates and getting rich . Costing the general publics hydro bills to increase at an alarming rate which they can't afford , causing businesses to leave the province which is costing many their jobs . If any on here think that the general public is going to have any sympathy for agriculture in the future you are dead wrong . When they drive through the country side all they see is wind turbines and solar panels raping their wallets .
lt doesn't matter whether it's farmers scalping electricity consumers by way of wind and solar power, or whether it's farmers scalping consumers of dairy and poultry products through supply management, it's all regressive economic policy, it's bad public policy, it divides the farm community, and increasingly makes farmers look like they simply don't care about anyone but themselves.
We will eventually pay a heavy price for our arrogance.
Stephen Thompson, Clinton ON
Lots of the solar farms are being built and sold to big companies not just farmers. The government is willing to paid the price for the hydro, and is it a good price or not . When they don,t have to pay for the material or the labour to build or look after them, is the price for the hydro the same as it takes to build and look after their own power plants? Just asking does anyone know the answer.
Here we go again (pizza) give it a break. Min wage raise is good for the working people , not so much for the people that have to hire. They say that there is 85 people in this world that has more money than 3.5 Billion has. So it comes down too if you are not one of those 85 people you will be some ones slave.
No one should have sympathy for the fast food industry of which Pizzerias are included.They all are making money hand over fist or there wouldn't be so many.Our town,with a Pop. of 5,000 has 4 or 5 primary pizza-making locations and one of the reasons is they are so easy to set up, they don't require the space that a big hamburger franchise needs and like so many of these establishments, everybody is part-time!
My next-door neighbour, is a former owner of two small pizza stores, and hired my daughter for five years when she was in high school, and even made her manager of one of those two stores just before she left for University.
I suggest, with no respect whatsoever, you have no idea what it takes to own and operate a fresh-pizza take-out store - it's hard work, it's long hours, there's no guarantee of anything except:
(A) having a toilet plug on you at 1:00 AM
(B) being forced to pay a whack more for mozzarella cheese than frozen pizza makers - thus the first lesson in any pizza-related job - "always measure the cheese".
(C) you get Christmas Day off, but that's it.
(D) people ordering pizza and never coming to pick it up
As for making money hand over fist, you are so wrong it's horrifying, yet all-too-typical of how little farmers understand about anything beyond their farm gate.
Ironically, a chicken farmer who'd just sold his farm and quota came along and, out of the blue, made my neighbour an offer she couldn't refuse because he believed, like many supply managed farmers, that pizza-stores were a license to print money - now, six years later, this former chicken farmer has these two outlets for sale and, no surprise, for a lot less money than what he paid for them in the first place.
Or, to look at it another way, pizza store outlets are one of the few businesses where the returns are directly related to how many hours the owner spends in the store, and how carefully he measures the cheese - it's what dairy farming could be like if the barriers to entry in the form of quota were to disappear.
Now if only fresh pizza makers weren't still so badly-screwed on the price of mozzarella cheese when compared to frozen pizza makers.
Stephen Thompson, Clinton ON
30 years in Dairy and not one Christmas off, so consider the Pizza store owners fortunate!
l don't see 4 Chinese food places in our town,or 4 fried chicken outlets, or 4 primary coffee shops or even 4 franchise burger and fries locations BUT l do see 4 Pizzaries that list fresh pizza's 1st on their menu.
l understand its supply and demand and obviously people love pizza and they must find that the prices are within reason or these 4 pizza places wouldn't be all doing a good business,l must add that 3 of the 4 have been in town for over 20+ years.
As for returns being directly related to hours worked, you could say that about any restaurant...maybe about farms as well.
It's simply amazing any of these pizza outlets make any money at all considering how much supply management hoses them for mozzarella cheese, the most-expensive ingredient in pizza.
But then again, in true supply management fashion, dairy farmers don't care about anyone but themselves, and continue to deliberately gouge anyone they can.
It's this lack of consideration for anyone which is the Achilles Heel of supply management.
Stephen Thompson, Clinton ON
Wow 4 Pizzerias and they are getting screwed , how about the ones buying pizza from them. They must be making money if 4 of them can have a business with such a low population. You have to look high and low to find a place that has enough toppings on them to call it a pizza period. Tell it like it is all you are is mad at the dairy farmers only for the price they charge for the mozzarella cheese, and you never mention the egg prices or turkey and poultry prices in SM farming.
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The most expensive ingredient in a pizza is labor and everything associated to it.
To make that comment is incorrect . Many people think because the have/own a business that they should be making money . Many who start these pizza businesses realize after the fact that money does not just flow through the door . They were sold a bill of goods on paper for a franchise more than anything with no guarantee of any profit . About all they were giving was a name to use and a supplier they have to buy from .
For all of those who want to see SM gone and for all of those supposed young people who say they want to milk cows with out quota the only thing that will happen is we will have more livestock farmers standing in line with the hog farmers who are looking for a handout and gov support . That my friends can be taken as bankable and predictable .
You forgot to mention pizza places hire students and there wage rate will go to $10.30 That is 70 cents less than the general minimum wage rate. If the pizza place serves booze the wage rate goes to $9.55. Thats $1.45 below minimum rate. Who has the double standard?
Setting a minimum wage is protectionism too. It affects all of society and we have to pay more for goods because of input costs, one being the price of labor. If there is no minimum wage, the costs of goods could go to a world standard. Why do you single out some goods with protected income built into the system yet ignore the wider picture of all other goods with built in wage protection? You cant have it both ways. Either give all sectors some sort of protectionism or eliminate wage protectionism from society altogether.
As long as we have supply management, we need minimum wage legislation to protect poor people from the wretchedness of supply management - it is a balancing act, and a very-necessary one.
In addition, your argument is self-defeating in that you seem to believe that, when it comes to public policy, poor people can either be completely-coddled, or completely-abandoned - and that is nonsense.
The undeniable fact of the matter is that supply management enriches a few at the expense of many, and pits farmers against one-another along both sectoral lines, and by age - we need to end it now.
Stephen Thompson, Clinton ON
Your right. Supply management enriches a few at the expense of many. The auto industry is supply managed, teachers, doctors, lawyers, police, nurses, the list goes on. Nice to see you want to en it now.
What utter nonsense. Minimum wage legislation was introduced in 1937. Supply management was introduced in the 1970's. Looks like supply management was needed to protect poor farmers from the wretchedness of minimum wage laws- it is a balancing act, and a very-necessary one as you say. Minimum wage laws are protectionism and affect more people than supply management.
Yup, a South Korea trade deal will help the cattle and hog farmers but the auto guys are not happy they will not have "enough protections" in the deal. Supply management in the auto industry looks like its on the same table as the dairy industry. I wonder who will win the race to the bottom? We will have less high paying jobs but we should have cheaper milk and cars.
i have 50 workers that we pay the min wage.Do the math and tell me what that is going to cost.Some will lose there jobs come June
Would you care to say what kind of a farmer you are ?
I am a farmer and a small business owner and I can tell you that a farmer gets many more tax breaks and gov support payments than any small business owner ever gets .
We are mainly grain crops with some cattle, no suooly management. Gov support payments are extremely minor part of our income. I stand by my previous comment. If a worker at $11 per hour for 8 hrs, say $110 dollars per day with payroll taxes, can't add that much value to your operation you need a better business plan or management abilities. $110 won' even fill the average pickup with fuel
Well if your gov support has not been much then
a) you don't need it because you are making money or
b) you need a different accountant as Gerry Ritz has publicly said .
As I said small busunesses do not have the write offs that Ag does .
Commenting strictly from a farm standpoint,l think 11 or $12 is all right, it probably averages out.We have paid $14/hr for students to help throw hay bales around all day and we will continue to pay that because its hard work.However if l wanted a student to cut the lawn on a riding lawnmower or do some painting then maybe $11 seems a little excessive,the point is to actually find someone these days to DO the farm jobs is the real test!
Leave it to a multi millionaire to be to cheap to pay some one minimum wage to work and pay only 3 dollars an hour more for hard work or slave labour .
I have been trying too save some money from my $10.25 hr. job to buy a farm but find it hard as they only allow me too work 24 hours a week so that they don't have too pay any benefits .
You will have to buy a small piece of land that not the so call grade 1 or 2 but maybe 5 and start there. Some people want to start with a 300 acre plus farm and all grade or class 1 soil, which is next to impossible unless your parents are already farming or a millionaire . Companies will pay low wages when most of the jobs out there are not manufacturing to help lift the average family into the middle income range . Low income families have little choice but to work for low wage unless they can get the education to break the trend.
In the short term raising the minimum wage makes sense for part time workers like yourself, my guess is that you probably work a retail job. I fear that in the long-term raising minimum wage hurts all of us. Raising the minimum wage only pushes more producers, processors, and factory jobs south of the border or over seas where goods can be produced for a fraction of the cost (e.g the Kellogg's plant in London, the Heinz plant in Leamington, Bick's pickle plant in Dunville etc). When we lose our processing and factory jobs we are only left with retail or service sector jobs like the job I am assuming you work. These retail and service sector jobs are able to, and absolutely will, pass on extra costs of production to the consumer. Unlike Kellogg's, Heinz, and Bick's, farmers cannot pack up and move south of the border to reduce our costs of production, our roots are here. Unlike the retail and service sector we cannot pass on our additional cost to the consumer because like Mark Whales said 'we are price takers'.
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Sounds like some one is trying to back out of an accepted job challenge . The cost of support for green energy will cost way more jobs than any wage increase .
We have only seen the tip of the iceberg on this . Hold on to your hats , it's going to be a bumpy ride !
so i read the comments. We will have to raise our prices of the products we sell by 7 %.Oh wait a minute we can't because the china imports to our customers are cheaper.So i guess this will force us to move our production of our GPS units we sell here to china for production and totally remove our work force and presence from canada. Bottom line guys it is really competitive out there, this is not about part time labour it is about overhead costs .It costs more to be here and if you compete globally it can be a big problem.
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