Restaurants warn of dire consequences for wage hike

Hours cut, layoffs loom in food service industry after province increases minimum wage

EDMONTON — Restaurant owners and operators in Alberta say they will have to cut hours or lay people off to cope with a higher minimum wage.

Mark von Schellwitz, vice-president of the Western Canada region of Restaurants Canada, says 78 per cent of operators have said they will cut hours, while nearly half will go through a round of layoffs.

Alberta’s minimum wage went up Saturday by one dollar to $12.20 an hour, and $1.50 for liquor servers, with the elimination of the liquor server wage.

Von Schellwitz says Alberta members recently participated in a workshop in Calgary to find ways to reduce labour costs.

They looked at balancing what they pay between higher-paid front-of-house service staff and back-of-house kitchen staff who don’t earn gratuities through new service charge or self-service options.

He says 35 cents of every dollar by a restaurant earned goes to labour costs.

“If you are an owner-operator you’re going to have to work those seven days a week and cover shifts that normally you’d have a staff member cover … in order to stay viable our guys are just saying, ‘look, I guess we’re going to have to work more hours to try and keep our labour costs aligned,” von Schellwitz said in a phone interview.

“We’d lost a number of food service businesses over the last year and in the first nine months since the last minimum wage increase, from October to July, we were down several thousand employees already. That doesn’t count how many people are getting reduced hours. Their take-home pay is actually less and not more with the minimum wage increases.”

Von Schellwitz was speaking at the Alberta Liquor Industry Conference.

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