$15 Minimum Wage Way Too Expensive For Small Depanneurs

What if Quebec follows the path of Ontario and increases the current minimum wage from $ 11.25 to $ 15 per hour, a drastic raise of 33%?

Good question! People in general have no idea. They do not see the disastrous consequences of such a large increase, but will immediately feel that the industry is dramatizing and exaggerating by highlighting the risks and consequences.

Today however, we’ll make our point convincingly by coming up with a real figure: $ 40,590.

This is what this populist measure will cost in extra per year for a small depanneur with employees on the floor and who barely earns a $ 10,000 profit a year.

How did we get to that figure? It is very simple. Everything is on the detailed chart that you can download HERE.

Unsustainable costs for a small depanneur

To come up with such an amount, we looked at the situation of a small depanneur employing a minimum of personnel on the floor.

Our small convenience store has the following profile:

  • It is open every day of the year from 6 am to 11 pm, ie 17 hours a day, 119 hours a week and 6,205 a year;
  • It employs an average of 1.5 employee on the floor at all times (one employee at the checking out counter half the day and two employees in the other half);
  • So it has to cover 178.5 hours a week and 9,307.50 hours a year.

Of course, we all know that a lot of owners can’t even afford to pay for badly needed personnel.  The owner himself has no choice but to fill up himself the 6,205 hours needed of floor presence. However, this extreme situation is not healthy nor sustainable and is more a matter of survival.

The best in general is to always have at least one employee on the floor, sometimes two so that the owner can focus on management tasks such as orders, administration, accounting and operations in general.

So, having determined the number of employees and the number of hours required, our depanneur currently pays the following:

  • $ 11.25 / hour (the current minimum wage) + $ 1.83 in mandatory benefits = $ 13.08 per hour;
  • $ 2,335.33 per week, all inclusive (wages and benefits);
  • $ 121,771.78 of wages and benefits per year.

Then, almost overnight, the government raises the minimum wage to $ 15 / hour. Here’s the impact:

  • $ 15.00 / hour (the new minimum wage) + $ 2.54 in mandatory benefits = $ 17.54 per hour;
  • $ 3,130.89 per week, all inclusive (wages and benefits);
  • $ 163,241.91 of wages and benefits per year.

The difference is striking: it’s $ 40,590.59 in extra over a year for the same workforce than before!

The key question is now the following: Where the heck are they going to find $ 40,000 in new revenue to pay for this additional expense?

  • The margins of Loto-Québec? They have never been increased in 30 years.
  • The minimum price of beer? It hardly increases at the rate of inflation.
  • Tobacco sales? The government is doing everything to destroy the market.
  • Cannabis sales? The government does not want depanneurs involved in the trade at all.
  • Electricity costs? Hydro-Québec announced larger increases to come.
  • The compensatory costs for the deposit? It had never been raised for over 30 years.

The only opportunity that could bring some fresh air would be to eliminate credit card fees that total $ 36,000 per year on average. But this is an issue of federal jurisdiction, while the minimum wage is under provincial jurisdiction.

Otherwise, you guessed it: the obvious solution is simply to reduce working time, about one third of the hours.

Thus, the direct relationship between the increase in the minimum wage and unemployment is clear: the more artificially expensive it becomes to hire people, the more employers are forced to reduce employment.

Incredible then to hear politicians from Quebec Solidaire or the Parti Québécois touting the minimum wage at $ 15 as an extraordinary measure, as if money was growing in trees!

Even worse, they have no moral issues at sacrificing the fragile depanneur industry to seduce more gullible voters. What a sad agenda.

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