Political ideology fails businesses
Thursday, Nov 16, 2017 06:00 am
Cochrane restaurants and bars are echoing criticisms made this week by Restaurant Canada as the organization dropped the province’s grade on business friendliness toward eateries and bars.
While its B grade – a slip from its B-plus in 2015 – is still the highest in the county, government polices have combined to be less business friendly according to the 2017 Raise the Bar report.
The inaugural 2015 report was designed to lobby provincial governments to implement polices that would improve business conditions, but Alberta was one of three provinces to see a reduction in grade.
“The government cancelled plans for a comprehensive liquor review aimed at updating antiquated liquor laws, and instead handed significant new costs to licensees at the worst possible time in the economic cycle,” was the report’s scathing review.
Since 2015, the Alberta government inflated costs to licensed establishments by plowing ahead with minimum wage increases and liquor markups despite a severely depressed economy. Wages, second only to food and liquor costs, spiked by 14 per cent to licensed establishments. Another increase is on the way in October 2018 when the minimum wage will rise again, this time to $15.
The province also cancelled a planned review that might have informed the government of the damage the two latter changes would have caused to the industry.
This is what happens when governments are motivated by ideology instead of common sense. It is easy to proclaim that every person who works deserves to make a living wage and that raising the minimum wage will achieve that.
Unfortunately, that is a vote-getting political statement not one of any economic depth. When the NDP came into power, the economy had begun its downward spiral on the back of plummeting energy prices. As tens of thousands lost their jobs, businesses, especially those in the service industry, which were the first to lose people’s discretionary spending, began to struggle.
This is where party politics always fails people. Instead of seeing that realities had changed and the NDP were not inheriting the country’s economic powerhouse, it steamed ahead with promises instead of taking a second look.
Increased minimum wage looks good on the surface but the argument that it will increase spending power fails when businesses cut employee hours or go under. Perhaps had the economy been rolling as it had been in the past, Alberta businesses might have better absorbed those increased costs, but not when unemployment ballooned to more than nine per cent and customer dwindled that was not the case.
In terms of server wage, the wage increase does not take into account servers – most of whom are not in it as a career – have a tipping culture that can substantially boost the rate of pay. It also means restaurants are forced to equalize or cut rates of pay for back of house workers – cooks and chefs – many who are in the work as a career and who if they are tipped at all only receive a small percentage.
Restaurant Canada’s report highlights why politicians should rule based on facts and numbers and not warm and fuzzy ideology.