Minimum Wage in Canada

For John, BLUF:  Doing bad while doing good.  Nothing to see here; just move along.

---

Metro Looks to Automation to Offset Higher Ontario Minimum Wage

From The Canadian Press, 16 August 2017.

Metro being a food chain up in Canada.

Here is the first part of the article:

MONTREAL—Ontario’s third-largest grocery chain will accelerate its study of automation as it looks to cut costs to offset the provincial government’s plan to raise the minimum wage next year, the CEO of Metro Inc. said on Aug. 15.

Eric La Fleche said the industry is under the gun because there is little time to adjust to cost increases, especially when intensifying competition is straining margins.

Metro estimates an increase in the Ontario minimum wage to $14 per hour from the current rate of $11.40 will cost it about $45 million to $50 million on an annualized basis in 2018.&nbSp; The impact excludes any pressure to subsequently increase other salaries.

“It’s the pace that makes it a pretty big challenge, but we’re confident that we’ll find some offsets on our own,” La Fleche said during a conference call about its third-quarter results.

The chain said it hasn’t calculated the full impact when the minimum wage rises to $15 an hour in January 2019.

“As a team we will strive to mitigate this impact as much as we possibly can through productivity and cost reduction initiatives, but the size and pace of these increases pose a significant challenge,” La Fleche told analysts.

Does a minimum wage help or hurt workers as a whole?  I think it helps those who have jobs, but to the degree it encourages automation it leads to a lower Labor Participation Rate.

Regards  —  Cliff