- iSDaily Monday – February 19th, 2018 – Episode 031
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From the files of Captain Obvious comes news out of Ontario that, shock, small business owners in the province will have to raise their prices after the minimum wage increase scheduled to kick in on January 2st, 2018 kicks in. The increase will change the minimum wage from $11.60 to $14. Enjoy your pay raises, and, in some cases, your layoffs, and, in all cases, your cost of living increase. That’s called economics, kids, and you should look it up before you give a small number of do-gooders the power to make another idiotic mistake like this one again.
Faced with rising minimum wage costs, many small-business owners across Ontario are crunching numbers and making the difficult decision to raise their prices.
The provincial Liberal government is increasing the minimum wage to $14 an hour as of Jan. 1 and then to $15 by Jan. 1, 2019 – an increase of about 23 per cent and 32 per cent, respectively, from just over two months ago. The rate increased to $11.60 from $11.40 in October.
“It is meaningful, the way it affects us,” says Andrew Violi, president of Mellow Walk Footwear, a Toronto-based manufacturer of footwear sold to retailers such as Mark’s and Mister Safety Shoes.
Mr. Violi says the higher wages will add about another $250,000 in expenses in 2018, and the company may have to eliminate up to five of its 60 positions as a result. He says some of the additional expenses will still need to be passed on to its customers through higher prices.
He expects to charge his retail partners an average of $2.50 more per pair of shoes or boots. For consumers, that could translate into an increase of about $5 for a product that costs between about $120 to $180. Mr. Violi has written to his customers and followed up with a phone call, citing the minimum-wage increase as the reason for the price increase. Meantime, the company expects to hear about price increases from some of its Ontario based suppliers by the end of the year, which is expected to put even more pressure on margins.
Read More at The Globe and Mail