Login / RegisterShachi Kurl: Family Day holiday will cost small business dearly in B.C.
I confess: I am a terrible auntie.
A close friend had a baby six whole weeks ago—and I still haven't found the time to go see the child.
No wonder then, that as we collectively struggle for an elusive work-life balance, the prospect of more time off is manna to hungry souls.
Premier Christy Clark knows this, and knows politically, she's on the side of the angels by introducing a new statutory holiday for British Columbia in the throne speech: Family Day.
The idea having even earned a serious thumbs-up from archrival and Opposition Leader Adrian Dix, I realize the optics and positioning of saying anything other than "yea, Family Day!" are tricky. But I am willing to be painted as a black-hearted harpie, if it allows me to explain why this move may be smarter politics than policy.
The popular appeal of another holiday is undeniable. Also undeniable: the costs to employers and taxpayers.
We asked, and the province can't or won't say how much more we'll all pay for increased public sector labour costs on Family Day (nurses, first responders, and other essential service workers will all be eligible for hefty holiday pay).
But we have done the math on behalf of our 10,000 small business members in B.C., and estimate that Family Day will cost small business owners $1,135 each, in labour costs alone.
How did we get to that number?
Earlier this year, we went to Statistics Canada, and found B.C.'s average hourly wage in 2009, the most recent figure available at the time. We assumed employees working a statutory holiday are working eight hours. And we calculated labour costs based on a small business with an average of five employees. We chose five because, according to the most recent Small Business Profile published by the provincial government, 82 percent of small businesses in this province are micro-businesses.
That $1,135 doesn't factor in energy and utility costs, or the potential for lost sales.
There may be some sectors who won't be hit so hard. Restaurants, for example, may see an uptick as everyone goes for brunch.
But most small business owners—family people themselves—will face some difficult Family Day choices: close, and risk losing irritated customers. Open, and pay time and a half plus an average day's pay to their staff, or, try to mind the shop on their own, forced to put earning their daily bread ahead of spending time with their own loved ones.
Why are we getting this holiday anyway? Notwithstanding the feel-good factor (which, I grant, is powerful) it is worth noting that with Family Day, B.C. would theoretically tie for first in Canada in terms of statutory holidays, while ranking seventh in the country on productivity, according to the B.C. Progress Board. Is this really the time for us to be taking our foot off the productivity gas pedal?
And will this holiday really be as fantastic as it sounds? Consider the Ontario model, where the introduction of Family Day in 2007 didn't necessarily mean an extra day off. That's because employers there can swap the day for any other non-statutory holiday that employees are entitled to. The result? Some workers may have to choose one holiday over the other. Nor do federal employees in Ontario get a paid Family Day.
There is no doubt that we benefit from having a bit of a rest and a catch up with our near and dear.
But ask yourself, who really benefits the most from this announcement? It's the B.C. government—which gets credit of giving you a present, while quietly slipping all of us the receipt.
Kind of like a husband sending his wife flowers and charging the in-laws credit card—every year.
That scenario doesn't necessarily make for happier families.
And it won't fix my bad-auntie behaviour. I'll have to do that on my own.
Shachi Kurl is the director of provincial affairs for B.C. and Yukon with the Canadian Federation of Independent Business.
While as a small business, I can sympathize and empathize with the writers comments, for many small businesses, excepting for perhaps service oriented business like restaurants, corner store or customs brokers there is no real requirement for them to open on a holiday. What they really need to ensure, and I know many will object is to let their customers know in advance that they will not be open as they will be spending time with their families and certainly encourage their customers to enjoy the same. It is a tough decision for family operated businesses and I know that many will think they need to open but in reality they need to do a cost analysis of how much business they can expect to receive on a holiday versus the cost to open. I suspect that their customers, especially if they are serving them well will not think less of them nor likely will they move their business elsewhere. I know for ourselves as a small family business we likely will not be able to take the day as a fair number of our clients are in the US so unless our holiday is in sync with a US holiday at the same time we have to work.
As I said, it will be it is a tough decision and one that each small business will have to make based on their experience and general market conditions at that time of the year as it relates to their situation.
Using the methodological explanations provided here, and lacking the actual report, there are already serious problems from an economic and accounting assumptions perspective.
A prime example is using the average wage in BC as a proxy for small business is a distorting assumption.
There is a strong positive correlation between capital invested and compensation for workers. Small business is not generally capital intensive and hence wages earned by workers in small business environments will reflect this. It is not reasonable to include the wages of large scale industrial workers (forestry, construction) in the mix with the server at a local restaurant to determine a proxy for an average ?
This approach also includes the wages of those in the public sector (doctors, nurses, police, fireman) as well as those in many management positions. Tell me, how small business organizations employ workers to perform public services or middle managers with six figure incomes ?
By using average wage rates for BC in their calcuations, the CFIB quite seriously over estimates the "costs" that they will incur in terms of wages. Since they were "at" Statscan anyways, they should have done their research and determined wage rates for catergories of business (yes, that data exists) before making up their own economic proxy on the basis of assumptions.
Whether done with intent or not, it is low quality work which is rather self serving in its nature.
"And it won't fix my bad-auntie behaviour. I'll have to do that on my own."
Your not only a bad aunt, your a bad human being and a disgrace to your former profession.
Don't go away mad Shachi, just go away.......
http://www40.statcan.gc.ca/l01/cst01/labr83k-eng.htm
This links to the data table for average weekly earnings by province, by enterprise size.
As can be seen by the table, in BC, the average weekly earnings for a worker in an enterprise of 5-19 employees is $ 706.
This is a far cry from the $ 1,135 average BC weekly earnings, for all workers in all enterprises and sectors, that the CFIB took from StatsCan.
Specifically, its a 61% overstatment of average weekly labour costs for an enterprise of 5-19 workers ($ (1,135-706)/706). Since the intial weekly earnings are overstated by 61%, this also means that the per tax financial impact per worker, as calculated by the CFIB, is overstated by 61%.
The question for Ms. Karl and the CFIB is quite simple.
Why did you not use the existing Statscan data for average earnings by worker by province by enterprise size when that data clearly exists and doesnt result in an ad hoc "back of the envelope" calculation, a calculation that overstates the pre tax financial impact per worker by 61% (429/706) ?
Is it simply lazy research, or self serving financial alchemy ?
I call BS.
The real problem is that the 99% have to work too much for too little money, while the 1% compensate themselves obscenely for too little work. The 1% stand on the shoulders of the builders of this country who did all the heavy lifting and made all the sacrifices in the first place.
Family Day, and most stat holidays, don't need to exist in the first place. Our elected officials take the corporate party line that our society can't afford a 4-day week and more air-tight social services, when we clearly can if voters had the guts to demand the rich pay their fair share and stop whimpering when corporate Canada barks.