What Tim Hortons’ Owners Aren’t Telling You About the Effect of Minimum Wage Hikes on Benefits

Ontario’s minimum wage law just went up to $14 an hour, and it will be going up again next January to $15 an hour. Ontarians have known this is coming for quite some time. It’s the culmination of a years-long initiative to get all residents of the Canadian province a living wage.

But some Tim Hortons franchise owners turned themselves into a lightning rod for anti-one-percenter criticism when they reacted by clawing back benefits, including health insurance and paid breaks to compensate for the increased wage cost. They made the announcement via letter while wintering in Florida. One long-time employee quoted in that story said that their paycheck had actually dropped with the wage increase by $51 as a result of the benefit and paid break cuts.

Though they are franchise-owners only (the brand is now owned by a multinational corporation), the owners in question are Jeri-Lynn Horton-Joyce and Ron Joyce Jr., heirs to the late Canadian hockey player and founder of the iconic Canadian coffee and donut chain, Tim Horton, himself.

These two own a number of stores and boast a net worth of over one billion dollars. So it’s no surprise that they have been heavily villainized in what has been a polarizing debate on the role of both corporations and small business owners in assuring a living wage for all, and the government’s role in ensuring that such individuals and organizations do right by their employees.

There are also a few wrinkles to this story. The parent company of the Tim Hortons brand, Restaurant Brands International, had scathing criticism for the franchise owners, while the voluntary Great White North Franchisee Association threw it right back at the parent company, claiming Joyce and Horton-Joyce were pushed into a corner by government overreach. While hiring and wage decisions lie with the franchise owners, the parent company restricts franchisees from raising menu costs, the most obvious way to help cover increased wages. That does, therefore, limit the franchisees’ options.

But there’s one thing Horton-Joyce and Joyce are carefully not saying. As they wring their hands over the need to balance increased wages by cuts elsewhere, the unstated assumption is that their profit margins are sacrosanct. The implication is that their workers can more easily forgo a living wage than their billionaire owners can forgo an extra couple hundred thousand dollars in yearly profits. Yes, the parent company may be putting the squeeze on the owners, but that means the workers have to make up the difference?

Now granted, it really depends on what those profits look like. I’ve seen estimates that range from a quarter-million to over one million dollars per year for one location. Billionaires or not, no franchise owner should have to break even or run at a loss. But it’s not at all clear that is what they are being asked to do. If higher estimates are correct, then the question at hand is whether an already extremely rich person can live off an income of, say, five million per year rather than seven million, in order that hundreds or thousands of employees across a dozen stores can actually get by. Likewise, the parent company could take part of the hit if their criticism of the owners is genuine and not cynical brand protection.

That everyone is being fairly tight-lipped about just what their profits look like is fishy to me. The term profitability is often thrown around in minimum wage discussions, with a hypothetical small operator imagined to be run out of business by oppressive new wage hikes. Profitability as a term is deliberately ambiguous, useful to suggest that a business may be just getting by but allowing plausible deniability if it turns out to just refer to any drop in what might be obscene profits.

By suggesting (but not outright claiming) a hand-to-mouth state of affairs for these stores, by concealing the hard numbers, the owners and shareholders alike hope to prevent us from engaging with the real question: are they really less able to take a pay cut than the working poor that run their restaurants?

Take Action

We’re calling on Daniel Schwartz, CEO of Tim Hortons’ parent company, to pay to restore lost benefits for affected workers at the Ontario franchise and require franchises in Canada to maintain leave and benefit policies when local wage requirements increase.

Will you speak out for fair compensation? Please add your name to the Care2 petition now.

Photo credit: Jazz Guy

62 comments

Marie W
Marie W3 months ago

thanks

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Paulo Reeson
Paulo R8 months ago

ty

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Paulo Reeson
Paulo R8 months ago

ty

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heather g
heather g8 months ago

The actual workers always seem to lose out.

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Dan Blossfeld
Dan Blossfeld8 months ago

Brian and David,
I find that I can agree with neither of you. First off, most people make more than $30k and are not poor. Last year, the median household income was $59k. Secondly, both the $150K and $100M figures are absurd. CEOs should be making much more than $150K, but do not need anywhere near $100M. The median CEO compensation in 2017 was $716K, which is plenty for most.

https://www1.salary.com/Chief-Executive-Officer-Salary.html

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Brian F
Brian F8 months ago

David F Most people make less than $30,000 a year and are poor. I see no reason why these greedy corporate CEO's can't cut their pay to $150,000 a year. Corporate profits are at an all time high, yet our middle class is shrinking and descending into poverty, so we simply cannot afford to pay these greedy CEO's over 5 times worker pay. Right now we pay these CEO's 300 times worker pay, and as a result millions of people are living in poverty.

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David F
David F8 months ago

Brian, large companies in the United States have to compete with their products and for their CEOs all over the world.
Some of these companies have hundreds of thousands of workers and family members that rely on their company to organize and make very fast important decisions affecting billions of dollars.
The person at the top has to be the best of the best of the best. $100 million is a tiny drop in a bucket to keep that company competitive and solvent.

The last thing I want for our major US companies leadership is someone with a $150,000 a year salary.
They should be paid whatever the company can afford.

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Dan Blossfeld
Dan Blossfeld9 months ago

Brian F.,
I am not defending them. Rather, I oppose your limiting wage proposals. As I stated earlier, roughly 25% of households make more than $100K. I call that many. These are middle class families. If you restrict earnings potential, you will restrict productivity. That will result in a stagnant economy, which tends to hurt the protest most. In your last post, you stated someone cannot survive on less than $40K a week? What about a family of four? I think you need to rethink your figures.

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Brian F
Brian F9 months ago

Dan B To be honest, I think actors, athletes, movie stars, and celebrities make way too much money too. I would support limiting their salary's to $150,000. Not many people make $100,000. But the reason I focus on CEO's of companies like Walmart, is because they employ a lot of people, unlike most athletes or celebrities. People can't survive on even $15.00 an hour, and need at least $20.00 an hour. If companies limited CEO salaries to no more than 5 times worker pay, about $150,000 a year, they could pay their workers more. Why are you defending these greedy CEO's, like the Walmart CEO, who makes 13 million dollars a year, while his workers live in poverty? Are you part of the 1%?

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Dan Blossfeld
Dan Blossfeld9 months ago

Brian F.,
You say you don’t want everyone paid the same, yet you often write that we should limit salaries to $100K. Do you realize that about 25% of households make more than that?

Secondly, you rail against those CEOs that earn, but what about athletes, actors, and entertainers where the pay descrepency is even greater? Shouldn’t we reign them in also? Or do you just have an issue with Walmart?

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