Why these small business owners are embracing the minimum wage boost

Two business owners in different fields explain why a living wage is good for business.

Thestar.com
Jan. 8, 2018
By Sara Mojtehedzadeh

On the face of it, business owners Gilleen Witkowski and Damin Starr have little in common: a millennial entrepreneur with a downtown Toronto dog walking outfit, and a father-of-six at the helm of a Niagara-based metal parts processing facility.

But despite divergent journeys, they say they've both arrived at the same conclusion: a living wage is good for business.

In the wake of a controversial backlash to the province's minimum wage bump, up from $11.60 to $14 an hour this January, Witkowski and Starr are urging fellow entrepreneurs to embrace what they see as much needed change. And they believe many are.

"I think some of the positive voices have been drowned out by some of the larger voices," Witkowski said.

Witkowski herself is no stranger to precarious work, part of the reason she says paying her employees $15 an hour was non-negotiable when she started her dog-walking and pet services businesses two years ago.

"I'm a millennial and my whole working life, the minimum wage was frozen or close to frozen. That's my context," says the 32-year-old co-founder of Walk My Dog.

"I've seen people attempt and fail to make a living on just minimum wage, and watched people struggle in the new economy to get good jobs with their degrees."

Her decent work strategy, she says, has proved a success.

"I totally understand the concerns around cost because I am a small business now. But I think the benefits outweigh the cost. The loyalty I've seen from my staff is incredible."

"It's doing the right thing, but there are tangible benefits and that is my low turnover," she added.

For Starr, the road has been longer. He cut his teeth working for a steel manufacturing company run by his father, who he describes as a hard-nosed businessman.

"I became sort of conditioned to believe the right way to run business is looking at your bottom line," he said.

For years - including after he started his own company, PreLine Processing - he followed suit, leaning heavily on minimum wage temp agency workers.

The epiphany, he says, came when he returned from Toronto having secured a $40,000 contract, only to find $10,000 worth of mistakes on his shop floor in Lincoln, Ont.

"I was working all sorts of extra hours because I had inexperienced workers making mistakes," he says. "I'm not blaming the workers. I blame myself. What a miserable environment I had."

Starr says it prompted a series of frank conversations with his permanent employees.

"I sat down with them and said, as a working person, what is it you need?"

In response, he dumped temp agencies and ramped up wages. Together with his employees, he calculated a living wage for his region — which in 2012, he figured to be $15 an hour.

"We decided that you couldn't work for us for less," he said, noting his base rate is now more than $17 an hour.

"People were thrilled with the fact that there was a commitment to ensure that nobody wouldn't be able to pay their bills at the end of the day," he added.

"Something occurred during that time that made me proud of the business and proud of the staff."

During the province's sweeping review of its employment and labour laws, originally initiated in 2015, some employer associations raised concerns about the impact of regulatory updates on already-squeezed bottom lines.

"Employment standards, rules and regulations impact the vast majority of businesses with employees in the province. Any changes to these policies would have widespread implications for Ontario's small businesses," the Canadian Federation of Independent Business's 2016 submission to the review says.

"We continue to be gravely concerned by the language … suggesting that Ontario requires a more rigid legislative framework around employment standards."

Despite her sympathy for fellow small businesses, Witkowski says she's disappointed at what she sees as a lack of leadership from large corporations in particular.

"Here I am, this tiny business trying to grow, trying to make it work … and then you have the larger food companies who I don't think care about the well being of their staff. They have an axe to grind and I think that's really inappropriate," she said.

"We're not changing economics here, we're just catching up with what minimum wage would have been if there hadn't been a freeze," she added, referring to two government-mandated minimum wage freezes between 1995 and 2003 and between 2010 and 2014.

For Starr, the minimum wage backlash highlights the perils of what he sees as short-term thinking.

"I have different customers then I had (before). Those that kept asking me for discounting, discounting, discounting, the answer was no. You will get it at the price that it costs based on a fair and reasonable workplace. And if you don't like it, then go somewhere else," he said.

"I think the recovery shouldn't be on the backs of workers. It should be a shared responsibility."