September 10, 2017

Wynne's minimum wage hike has Dollarama cutting staff

Ezra LevantRebel Commander

On Friday's show, I reported on the disastrous effects of Kathleen Wynne's plan to increase Ontario's minimum wage to $15/hour.

The legislation hasn't been implemented yet but Dollarama has already announced they will be cutting staff in a move towards increased automation.

Kathleen Wynne hasn't run a business; she doesn't understand the thin profit margins that retailers have to work with.

WATCH to see why I think the wage increase will mean dollar stores will likely have to make $500 more in profit each day just to keep Wynne's promise.

Comments
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commented 2017-09-12 06:19:35 -0400
Andrew said in part, At least I’m trying to bring numbers to the discussion. It’s certainly not “most” of the jobs."

Ha ha ha! Go back and read your posts, your comments render you as a “know it all, far from it”
commented 2017-09-12 06:15:53 -0400
Andrew, I live in an area of Ontario where there are numerous dairy farms, and, I’m friends with a number of farmers. Your attitude toward this industry is bigoted and you don’t know what you are talking about, you are bratty and snotty.
commented 2017-09-12 02:00:46 -0400
Nathan W where are you getting 5 an hour from?
commented 2017-09-12 00:58:42 -0400
At least I’m trying to bring numbers to the discussion. It’s certainly not “most” of the jobs.

Oh, and who’s out there picking fruit off the trees? You’re an unlikely SJW.
commented 2017-09-11 21:46:42 -0400
ANDREW STEPHENSON commented 3 hours ago
“When I was last in a Dollarama, I saw about a dozen people in teh back and three on the tills. Even if they rotate through, that indicates the ratios maybe a fifth. Automation gets rid of two of those three cashier positions (one still needed to supervise the self-serves). Unemployment isn’t high. Specious input conditions do not make for a valid argument. 6.1% at latest report, and much below 5% the labour market seizes up due to worker shortages.”

Your shopping trip to Dollarama makes you an expert does it?!!! So you observed them in situ for a short time then extrapolate a theory which you cannot prove. Wow.
commented 2017-09-11 21:27:24 -0400
“generally support my claims” Pffft! Admit it, Seattle is tricky, there was an economic upswing, and reports for other cities do not support your claims.

You know nothing about dairy operations, basically the Menonites , Hutterites & Amish milk by hand. There may be a few hobby farmers too!
I’m talking fully automated dairy operations, which you cannot conceive. Frankly, I’m still angry at your bigoted comments about farming in an earlier post…I can’t be bothered enlightening you any further on this. Claiming nobody wanted the jobs anyway is clearly you saying you wouldn’t work on a farm. Projection isn’t fact!
commented 2017-09-11 19:06:20 -0400
“Tammie Putinski-Zandbelt commented 5 hours ago
Andrew, how about you research cities in America who have tried this, data is still developing, but, isn’t turning out as economists once forcasted. Your claims sound regurgitated, and once again no citing.

Your reference to farming was incomplete and bigoted.

I have visited some pretty impressive automated dairy operations. The job losses are a reality. No need to have a team of employees anymore. "

The American studies generally support my claims. Even the Seattle one that’s been batted around lately noted losses in only very specific categories, although total worker count increased outside those categories.

The dairy operations automate, at least partially, because they can’t find workers to do it by hand. The cost savings are a bonus, but nobody wanted the jobs anyway. Farmhands are almost entirely TFW.
commented 2017-09-11 19:03:48 -0400
When I was last in a Dollarama, I saw about a dozen people in teh back and three on the tills. Even if they rotate through, that indicates the ratios maybe a fifth. Automation gets rid of two of those three cashier positions (one still needed to supervise the self-serves). Unemployment isn’t high. Specious input conditions do not make for a valid argument. 6.1% at latest report, and much below 5% the labour market seizes up due to worker shortages.
commented 2017-09-11 15:13:27 -0400
Andrew, as you stated you have never owned a business, and it shows. Further to that, no Andrew, the majority of jobs in an operation like Dollarama ARE cashiers. One owner, one manager, both of whom stock shelves and order. Cashiers also stock shelves when not busy at the till. You obviously know nothing about business as these numbers are clearly evident to anyone who visits one of these stores. One owner, maybe a manager, and shifts of cashiers, shifts of them. And with automation, most will be gone. And as William Elder stated, the ROI on these systems is minimal at best. You speak from dreamy land. As for a lack of labour force, why then Andrew are there such high unemployment rates? Since cashier jobs do not require higher education, there are plenty of qualified people who would love to work, and you will be adding to their numbers. These figures are available at least once a month on every news media, but you must have missed it.
commented 2017-09-11 14:10:41 -0400
Andrew, how about you research cities in America who have tried this, data is still developing, but, isn’t turning out as economists once forcasted. Your claims sound regurgitated, and once again no citing.

Your reference to farming was incomplete and bigoted.

I have visited some pretty impressive automated dairy operations. The job losses are a reality. No need to have a team of employees anymore.

I do agree with lower paid apprenticeship programs.
commented 2017-09-11 11:29:34 -0400
“Tammie Putinski-Zandbelt commented 13 hours ago
The fight for 15 will harm the people it claims it will help. Youth, unskilled workers, legal immigrants, second income for families etc… Business owners will be very selective in who they hire; preferring employees with stable employment history, experience and excellent references. The first wrung on the ladder has been removed.
As automation and AI are used instead of people, where do these unemployed workers find a job?
It will also generate underground employment.

The cost to business owners cannot be forgotten either. Some companies will close their business and move to an area where this will not be forced on them.

Ask the paid farm hands if they miss their job!"

Most will benefit. Cashiers are a fraction of the total employment in a typical retail outfit. Stockers/CSR/cleaners are not yet automated nor imminently so. With 6% unemployment in Ontario, employers can’t be too selective, it’s not far off total employment, by 5% you start seeing labour shortages and it’s the employees who can be picky; There aren’t enough warm bodies for employers to be picky. Without the TFW program there would already be labour shortages especially in the big cities. (as an aside, the “first rung” issue could be addressed by returning to the way things used to be, and how the Europeans still do it, in which workers are sort-of apprenticed into higher value jobs almost right away).

The unemployed workers will find jobs since the effect of a sudden injection of wealth will lead to a burst of economic activity necessitating hiring more workers. This is how it has been.

Business owners are free to move. I doubt they will and even if they do, that niche doesn’t go away and a new business will open to serve the vacancy.

I don’t know about those farm hands. Can you speak Spanish? Even though automation has eliminated most of those jobs, they still can’t find people willing to do it and have to resort to seasonal foreign labour. Even though it’s disruptive on an individual level, at a societal one we clearly don’t miss those jobs.
commented 2017-09-11 10:57:38 -0400
Unfortunately, low value activities with thin margins will be reduced, workers will be available to match with businesses performing higher value activity.

And in the meantime, lower value activities with be made more efficient.

It literally might be better for some people to ban them from being allowed to work for $5 an hour. In addition to encouraging/forcing them to upgrade skills or otherwise earn that $15, low value activities with either have to shape up or ship out, or get into a more high value line of economic activity.

(It may be worth nothing that at $15 an hour, fewer people may shop at Dollarama, as they may be able to afford more expensive and higher quality Canadian goods.)
commented 2017-09-11 10:57:37 -0400
Unfortunately, low value activities with thin margins will be reduced, workers will be available to match with businesses performing higher value activity.

And in the meantime, lower value activities with be made more efficient.

It literally might be better for some people to ban them from being allowed to work for $5 an hour. In addition to encouraging/forcing them to upgrade skills or otherwise earn that $15, low value activities with either have to shape up or ship out, or get into a more high value line of economic activity.

(It may be worth nothing that at $15 an hour, fewer people may shop at Dollarama, as they may be able to afford more expensive and higher quality Canadian goods.)
commented 2017-09-11 02:57:01 -0400
It won’t be long before dollar stores becomes nothing but a bunch of vending machines.
commented 2017-09-11 01:06:20 -0400
Andrew farming demands grew exponentially , there is a huge difference in forms of automation. Cashiers are not needed at the same level as food. Very poor comparison.
commented 2017-09-10 23:12:28 -0400
As someone who has actually set up automated production systems I can tell you the driving force behind investment in automation is heightened out put, less opportunity for human error in staggered product mix, repeatable level of quality and on time delivery. Automation is best fitted to high volume production, labor intensive production and warehousing and shipping logistics.

None of this is applicable in the low end service industry. At a store front retail level the ROI on automation may be marginal to negative, depending on the personalization level demanded by customers. The volume handling capacity of automation is wasted on walk-in customer traffic in most retail operations – this was done at Dollarama strictly to reduce staff costs because motion and time study shows customer-actuated automated check outs are slower in through-put than trained cashiers. Similar moves were made at grocery chains which became uncompetitive due to unionized employee costs – staffing requirements were lowered with auto cashier systems.
commented 2017-09-10 22:46:43 -0400
And, again, why stop at 1
$15. Why not $150. Then more people will be unemployed, efficiencies will be even greater and we’ll be walking the streets of nirvana.
commented 2017-09-10 22:25:20 -0400
The fight for 15 will harm the people it claims it will help. Youth, unskilled workers, legal immigrants, second income for families etc… Business owners will be very selective in who they hire; preferring employees with stable employment history, experience and excellent references. The first wrung on the ladder has been removed.
As automation and AI are used instead of people, where do these unemployed workers find a job?
It will also generate underground employment.

The cost to business owners cannot be forgotten either. Some companies will close their business and move to an area where this will not be forced on them.

Ask the paid farm hands if they miss their job!
commented 2017-09-10 21:56:53 -0400
Well, in theory inventing mechanized farm equipment put millions out of work as well. Do we miss those jobs? How are automated checkouts any different?
commented 2017-09-10 20:46:27 -0400
Reality over ideology – it’s quite evident this is something you truly struggle with Andrew!
commented 2017-09-10 20:21:13 -0400
I’m sure you are. Rightists have always been the sort to never let reality interfere with their hunches.
commented 2017-09-10 19:39:03 -0400
Andrew, I’m having a hard time hearing you from your castle in the sky.
commented 2017-09-10 19:37:58 -0400
This theory is well based in observation over the last 200 years. Automation has invariably increased employment and quality of life.
commented 2017-09-10 19:35:52 -0400
Andrew, once again you are basing this on theory and not experience- neither yours or those who have actually been there. You seem to have the inside track on how people will act and what they will do in the future.

As Yogi Berra once said, “In theory, there is no difference between theory and practise. In practise there is.”
commented 2017-09-10 19:09:22 -0400
Winbag & her clowns are just that clueless, have for example 10 people working at maybe $10 hr or her brainless idea to up the wages by $5 that Dollarama cannot afford & end up with 6 people working instead, really bright, so what happens to the other 4, well I guess they might have to go on welfare. So simple,yet they can’t figure it out, keep voting for them Ontario, you deserve what you got.
commented 2017-09-10 19:05:20 -0400
“Common Sense commented 2 hours ago
Andrew Stephenson, it is quite clear you have never owned a business. Just for starters, the improved job you refer to will be the sole surviving position left after the 9 other sales associates are let go, that is a 90% lay off rate. Those 90% will now go on EI. And the increased wage drives the low income earner into the next tax bracket, which results in less take home pay”

If I ran a small business, I’d love something that allows me to to ten times the work with the same staff. Chances are pretty good, if I invented that, my services would be so cheap I’d instantly grow fast enough to maintain all my staff, and probably have to hire even more.

Where’s 90% from, anyway? I see about a 4:1, maybe 6:1 ratio for cashiers, which is 80% for that particular job, and perhaps 20% of total staff. At the same time, you’ve increased the number of consumers with disposable income by a similar ratio, so you’ll need to hire stockers to refill shelves as your merch turns over faster. Net result could well be net-gain of jobs once you factor in the back end.

There is no situation where increased gross income reduces net (seriously, do people not understand how taxes work?) If you earn 42k, you pay 5% provincially on that 42k (minus deductions), If you earn 43, above the bracket cutoff, you still pay 5% on that first 42k, and 9% only on that last $800. That extra thousand dollars gross is still ~900 net. The health premium can be quite steep but you can get around that by being a bit strategic about RRSP deductions.
commented 2017-09-10 18:29:55 -0400
Andrew said, “It’s fairly implicit in the wage hikes forcing automation. Automation improves productivity, and job quality will also improve simply because they’re not going to pay 15 dollars for 10 dollars of work – they’ll change the jobs into 15 dollar an hour ones to meet wage expectations.”

Whew! Andrew, I see that you are putting your doctorate in twisting logic into a pretzel to good work.
commented 2017-09-10 17:15:30 -0400
Andrew yeah let me know when any of that comes to fruition, and i don’t mean when the NDP makes something up. And maybe you need to share some of your wisdom with the public sector and government unions, they fester the exact opposite.
commented 2017-09-10 16:40:58 -0400
Common Sense, that also was my question, since the wages go up and are now in a higher tax bracket, who really benefits from this, the wage earner who in actuality takes home far less than they realize with the 15.00 an hour wage they will now be earning or Wynne who will now collect the increase in taxes these individuals will be paying in the end.
commented 2017-09-10 16:16:09 -0400
Andrew Stephenson, it is quite clear you have never owned a business. Just for starters, the improved job you refer to will be the sole surviving position left after the 9 other sales associates are let go, that is a 90% lay off rate. Those 90% will now go on EI. And the increased wage drives the low income earner into the next tax bracket, which results in less take home pay, to pay for the increased costs of the goods they used to sell, which they can no longer afford. Well done Andrew, in your first day of business, you are bankrupt, and you have sent 9 people home to their families to suffer.