Both in Canada and in the U.S., many jurisdictions have “listened” to the people and enacted feel-good legislation like increasing the minimum wage, sometimes up to $15 an hour. Now that the consequences of such actions are being felt, people naturally blame… private corporations.
In Ontario, famous doughnut chain Tim Hortons sent a letter to all their employees saying that many of their benefits, such as paid breaks and dental benefits, will be scaled down or canceled altogether. Meanwhile, the Great Canadian Bagel chain has announced a price increase to pay for the newly imposed wages.
Unhappy with these changes, an Ottawa-based labor council set up a “bully hotline” so that employees can anonymously denounce employers who “violate the spirit of the new law.” Many “Timmies” regulars are even calling on a boycott of the chain to show their discontent.
In the U.S., a recent picture from a Subway restaurant in Seattle, Washington, shows the franchise owner stating that, because of all the costs incurred (including high minimum wage), he cannot accept one-dollar coupons for the footlong of the day.
It is almost a miracle that the chain hasn’t cut back on employees altogether.
Market Forces Affect EverythingWho is to blame for those changes on both sides of the border? Unfettered-capitalist-neoliberal-puppy-eating-Koch-brother greed? Heartless managers who just want to exploit their workers?
No, the cutting back of hours, benefits, and discounts is a working of the markets, i.e. of every customer’s decisions. Since franchises like McDonald’s have, on average, a profit margin of 2.4 percent, the slightest sudden increase in costs will eat that margin away. It’s a highly competitive and difficult world; as much as 30 percent of Quiznos franchises default on their government-backed loans.
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