Our famous coffee chain was under fire because some franchisees changed from paid breaks to unpaid breaks to help mitigate the cost increase since their prices remained the same. People (the less intelligent ones) were calling for a boycott of Tim Hortons as a result.


It's fascinating what's going on at Tim Hortons these days - the iconic coffee chain that is about as Canadian as you can get for many in this country . . but, it's owned now by a Brazilian consortium that has been ruthless with the cost-cutting over the past couple of years. Before this recent issue with the minimum wage, there was a large group of Franchise owners who were in full mutiny mode with the Brazilian owners over these relentless cost cuts.

Many still think that TH is pure Canadiana - but work is starting to leak out about what's been going on behind the scenes and that it's not even owned by Canadians anymore!

Up until quite recently Tim Hortons was such a part of the Canadian mystic and ethos that Canadian politicians would routinely hold press-conferences and announcements during elections IN, Tim Hortons parking lots - the logo and the name being such a touch-stone for all things Canadian. I'm guessing going forward, this will NOT be the case!

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Steve Fleck @stevefleck | Blog

Thanks for the insights, Steve! Really good scoop, and I'll start listening to CBC daily from now on.

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"Politics is just show business for ugly people."

Not disagreeing with you, but the CBC website had an on-point analysis piece, a couple of days ago, that noted that it would have been far more effective for the lower economic group, if the governments (federal and provincial) had raised the basic tax exemption rather than minimum wage. As it is, the increased minimum wage puts the burden on the (small) businesses, and actually increases tax revenue since $15 per hour, for a full time earner, translates to $30k annually. That is well over any province's minimum exemption threshold.

So the governments that are increasing the minimum wage, instead of taking a hit to improve people's lives, are actually making an attempt at a tax grab. If the governments had a true inclination to improve the situation of the low income earners, they would have bumped the basic exemptions, and they could have made that tax neutral by slightly lowering the thresholds for the higher tax brackets. This would have been neutral for business..., except that by giving people more money in their pockets, it probably would have stimulated the economy some.

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Less is more.

We've got tons and tons of data points. That was my whole point. The idea that we are "doing science" by adding another is laughable. What we are doing is just implementing a desired policy in spite of the science. That's the conclusion my analogy to CO2 emissions and AGW was supposed to conjure.


What's the minimum price for milk? Or pencils? Why don't we need a minimum for those things as well? I don't pine for the 19th century. This century is great, but that doesn't mean every single change has contributed to the improvement. To wit: Do you prefer your kids reading books a la 1850 or staring at a youtube video a la 2018?

I understand an appeal to equality. However, minimum wage law is very distortionary, and tends to negatively affect the poor most of all. The poor suffer the most from these wage variations. Raising the minimum wage decreases jobs for the poor. It also makes services the poor tend to utilize more expensive. There are better ways to address inequality IMO.

Truth in advertising: I actually don't care about inequality that much, and would prefer to just establish a safety net that doesn't marginally tax away the poor's incentive to work. I guess that would typically mean some type of guaranteed income scheme. Illegal immigration obviously throws a wrench in that.

We left "pure free market " when ... .well, we never had it, and we decided that we never really wanted it, though a radically modified version is very popular. Check out average hourly wages for the lowest paid workers in the 19th century. It is indisputable that minimum wages (and the rise of unions) improved the lives of these workers. Such distortionary laws led to a significant expansion of the middle-class. You can certainly posit a high minimum wage in which the possible loss of jobs exceeds the improved wages earned by the poor, but zero isn't that level. I tend to support varying minimum wage levels, based on costs of living in different areas.


Global trade threw a much bigger wrench in that. Much poorer countries with lower wages have pressured the lowest wage earners in many sectors.

Letting a pseudo-"free" market find a bottom is unlikely to work (after all, it never has). If you want to increase work incentives (necessary since we are at "full employment") raising wages for the lowest paid certainly is one way to do it, and much less intrusive than the present safety net or plans for "a basic guaranteed income". One could concurrently lower the safety net, but increasing poverty isn't probably a sustainable policy. Too great a level of inequality over time is inherently unstable, since the "losers" vastly outnumber the "winners", and vote for often radical changes in the status quo.

(robots will make it even more

Here in BC we followed suit with plans to raise the wage from $11 to $15 in a few years. That's a big jump to make.

I occasionally hire tempt construction labourers who currently make $15/hr. It will be interesting to see how much their rate will increase when they could be making that as a barista or flipping burgers. I'm sure customers won't mind me charging an unskilled broom pusher out at nearly $30/hr just to cover their costs...

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Long Chile was a silly place.

You make a good point. Do I take the easy (mentally and/or physically) job paying $15 hourly or the harder (likewise) one paying the same, ceteris paribus?

Not all (or even most) workers will be able to enjoy this sort of pleasant conundrum, of course. But I've read other studies that indicate some workers will take an easier job even if it pays a little less than a job that may be a bit more taxing but which also pays a bit more. They assess the trade-offs, typically, and find a way to make the lower-paying job work, if it means they won't have to labor as hard in that job as they would in the higher-paying (not greatly higher-paying, though) job. Typically, they give rationales like "Quality of work life" (or simply "Quality of life"), "Better work-life balance" and so forth to justify taking the lower-paying job.

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"Politics is just show business for ugly people."

Well, in fairness, being a construction labourer is a terrible job. Unless you're a young buck gaining experience before an apprenticeship, if you've been a labourer for more then a couple years something has most likely gone terribly, terribly wrong in your life. If I were going to struggle in a job that doesn't quite make ends meet, I'd probably opt for something more akin to Burger flipper or coffee slinger, or at least something that doesn't destroy your body like construction work does. I doubt that extra $1.5/hr the labourer is making will help him afford back surgery ;-).

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Long Chile was a silly place.

I've never understood this argument about the "pure free market". It's analogous to arguing that we've never had a world completely devoid of human suffering so why try to eliminate slavery? (for instance). First, I never mentioned anything about a "pure free market". What I did mention was that minimum wage distorted the market. Then I told you what the distortions were -- less jobs and higher service prices for services the poorest tend to use. If you don't want to address those points, then fine, but please, no more "pure free market" talk. It's irrelevant.

I don't want to increase work incentives beyond what they already are. That's not what I said. What I said is that I don't want marginal tax rates on labor to discourage work


I don't think this is necessarily true. I think high levels of human suffering are inherently unstable. Often those two things have gone hand in hand, but they don't have to.