Governments gamble on a minimum wage hike

On January 1, Ontario raised the  general minimum wage in its jurisdiction to from $11.60 per hour to $14.00. British Columbians are promised a similar jump in the near future, though the timing is subject to the work of a government-appointed commission.

Members of the Tim Hortons restaurants’ founding family reacted to the Ontario increase by taking petty revenge on their own workers, stripping them of non-wage benefits at the locations they still own directly. This triggered a brawl within the Tim Hortons organization, with the corporate head office urging franchise owners to handle the issue more discreetly.

This blog site supports the implementation of a substantially higher minimum wage in Canada because it will benefit a large number of people, acknowledging that the increase will put pressure on small businesses that are already drifting to the margins for other reasons.

I’ve been following the news media since the mid-1960s, when the minimum wage in my home province was something like $1.25 per hour. At every minimum wage hike, small business groups have issued dire warnings about job losses and business failure. The facts, as I understand them, are roughly as follows.

First, minimum wage increases over the past 40 years have been entirely eaten up by inflation. On June 15, 2017, Global News quoted Statistics Canada on this point: “While Canada has undergone important economic, social and technological changes since the 1970s, the minimum wage and the average hourly wage are essentially unchanged.”

Second, through the long era when the real minimum wage was unchanged, a huge number of small businesses closed their doors nonetheless. A 2010 Industry Canada study stated that a business failure rate of 50 per cent in the first five years of operation is normal. “Young organizations face many vulnerabilities and liabilities. They may lack sufficient financing, business networks and skilled employees in their early days. They may still be having problems ensuring consistent production quality. It takes time to develop a reputation in the market and a stable set of customers and suppliers.” 

Other commentators are less charitable. Googling at random, I find blogger Patricia Schaefer (2017) suggesting that “Going into business for the wrong reasons,” and “Poor management” are the top two of seven common reasons for business failure. The minimum wage does not come up.

Of course, a sudden 20 per cent increase in the minimum wage is well above the norm. It is intended to be a game-changer. It represents an effort by Ontario, and presumably British Columbia, to deliver a real wage increase to folks who have been struggling, especially with runaway housing costs.

A new study published by the Bank of Canada estimates that 8 per cent of the national labour force earns the minimum wage, or about 1.5 million individuals. About 40 per cent of the minimum wage group, according to a Statscan report from 2014, are over the age of 25. A wage boost  obviously improves the ability of minimum wage earners to find decent housing and look after their kids, if not save for retirement. The Bank of Canada study suggests that a wider group of low income earners, more than a million people nation-wide, would see their low wages bumped up as a result of the minimum wage hike.

The downside to a 20 per cent minimum wage increase is that some businesses will cut their expansion plans, and others will blame the change for their decision to fold. Business failures may occur, for example, in rural villages and hamlets where the customer base is small, and the convenience store or cafe has operated at the margin for some time; or in Metro Vancouver locations where retail-store rents have tripled in the past few years. The Bank of Canada study estimates that forecast minimum wage hikes will raise total labour income, but will reduce national net job creation during 2018 by somewhere between 30,000 and 160,000 full-time equivalent jobs. By comparison, the Canadian economy created an estimated 440,000 jobs in 2017.

The Ontario and B.C. governments are gambling here. The will both face well-organized right-of-centre parties in their next election campaigns. For Ontario, that event arrives in spring 2018. Small business people vote; low-income people often don’t vote. The two governments can only hope that the economic and social benefits from the increased minimum wage will offset the hard-luck stories from affected businesses; or that voters want to hear about something else.

 

Yaletown encore

We last visited Vancouver’s Yaletown district almost five years ago, in early 2013. We noted that the Yaletown brand was so hyper-trendy that developers were making use of it across a wide swath of what used to be called the South Downtown.

With its towers, cafes and rapid transit, Yaletown is now the prototype for much recent or proposed pop-up development in Vancouver’s suburbs, for example in Coquitlam Central, the still-pending Coquitlam waterfront project, and the rumoured Metrotown 2.0.

Co-tourist Robert Smarz and I used to work together at an office in Metrotown, and returned on a holiday-season Friday for a cozy lunch at Rodney’s. There has been further tower construction around the casino on False Creek; otherwise, I see little change, other than some slight mellowing as the trees grow up and the sidewalks buckle.

The City of Vancouver has posted a “Yaletown walking tour” page that will lead visitors to some of the remaining historic buildings in the area.

Sapperton in bits

Columbia Street, showing the Sapperton area’s “Brewery District,” a nearly-complete development built on the site of a vanished industrial brewery. The head office of the regional transportation authority (TransLink) sits in the foreground. A new residential tower peeks out from behind.

An abandoned house, pre-1900, across looking across Columbia Street to the new Brewery District offices

Sapperton, as defined in the City of New Westminster maps, is a long rectangle with no adjacent residential neighbourhoods to the east or north. With recent development, Sapperton has become more self-contained and livable; proposed further development would add thousands more residents at the eastern edge, with unforeseeable results.  

As I drove to meet co-tourist Bob Smarz for a walk through Sapperton, an item on the radio reminded me that this is, in one sense, the birthplace of British Columbia. The Fraser Cemetery on the hill is the oldest in the Lower Mainland region: its dead include veterans of the American Civil War who moved to Canada, and presumably some Sappers, or British Royal Engineers, who landed on the Fraser River shore around 1860 to build B.C.’s first administrative capital. Continue reading

Building a local economy on automotive repair

Crystal Glass and Boyd Auto Body, two blocks east of Maple Ridge City Hall

In most parts of Metro Vancouver, more than half the working population commutes to workplaces outside their home town — this is according to a Vancouver Sun analysis from 2014, which echoed findings from the previous decade.

A typical central area viewscape, with nature in the distance. T&T Auto Parts is on the left in this photo, Accent Glass & Locksmith (not visible) is in the strip on the right.

In my suburb of Maple Ridge, many people drive every day to the Tri-Cities (20-40 minutes one way), Burnaby (35-50 minutes one way) or even further. Not surprisingly, we have a big automotive sector. Auto dealerships are among the biggest employers, and they dominate the highway that connects Maple Ridge to the inner suburbs. Probably our most prominent head office belongs to Lordco Auto Parts, a chain with more than 120 retail locations around British Columbia. Continue reading

A democracy of beer

Brewing tanks at the Ridge Brewing Co. tasting room, Maple Ridge

Kory Tiemstra behind the bar at the Silver Valley Brewing Co. in Maple Ridge

Fraseropolis.com doesn’t usually advertise commercial enterprises, but we want to note the launch of The Growler, a print publication devoted entirely to a single burning question: where can I find fresh craft beer near my house?

The Growler illustrates a point that we often underline here: there is life in British Columbia beyond downtown Vancouver. The latest issue reports that there were four craft beer tasting rooms in Port Moody at the time of printing, four in Surrey or White Rock, and many more in the Fraseropolis region and in towns and cities around the province, with a full-page listing of venues that are “coming soon.” Each location offers a chance to sample what’s for sale, fill up a jar to take home, and talk philosophically about beer with the folks people behind the counter and whoever happens to be perched nearby. Continue reading

Suburban sprawl, German style

Garage entrance and back yard, Brunsbüttel

On a trip to Europe this month, Vicki and I stayed with friends in Brunsbüttel, a town of 13,400 on the North Sea. The town’s most notable feature is the entrance to the mouth of the world’s busiest artificial waterway, the Kiel Canal. Ocean-going ships sail past the eastern end of the high street on an hourly basis.

This pedestrian-cycling pathway also provides local  vehicle access to garages and laneway housing. The home on the right has solar panels on the garage and on the main roof.

Our friends are from southern Germany, but they own a retirement home in a newish subdivision on the northern edge of Brunsbüttel. They were among the first to build here in about 2002. Like its counterparts in similar-sized towns in North America, the neighbourhood is laid out in a cunning pattern of nesting crescents and dead ends to discourage vehicle traffic. Continue reading

Transforming Metrotown

Paterson SkyTrain station, looking to new residential towers south of the Metrotown shopping complex

The older retail blocks on Kingsway near the mall have struggled over the years. Tenants include payday loan shops, tattoo parlours and porn outlets.

The City of Burnaby has adopted a new long-term development plan for the Metrotown district. By 2040, Metrotown is to be transformed by the redevelopment of its signature shopping malls into a “finergrained network of public streets, lanes, pedestrian connections, plazas, squares, parks, and open spaces.” Metrotown is to become a classic downtown core in a suburban city of 240,000 that has lacked a focus until now.

The July 2017 plan replaces a 1977 document that, visually at least, had a creepy, adopted-by-aliens vibe. The old plan facilitated the growth of the Metrotown shopping complex, Canada’s second-largest indoor shopping centre, along with a surrounding ring of apartment towers. The shopping centre is a busy place with an enormous variety of services, but it shows blank facades to the outside world. As I pointed out after my 2012 visit, the streets and concrete plazas around the mall lack life and colour. Continue reading