Even for Worker Co-ops, Paying a Living Wage Is a Complex Issue — Kenzie Love

Like all businesses, worker co-ops are obligated to pay their workers a minimum wage. As recent studies have shown, however, paying the bare minimum is no longer sufficient to cover even basic expenses such as rent in many cities across Canada. Hence the concept of the “living wage”, a figure which theoretically covers the actual cost of living in a given community by factoring in not just rental expenses but also the cost of food, transportation, and other necessities.

Because the cost of living varies according to location, family makeup, and other factors, there’s no single way of calculating what a living wage is. The Ontario Living Wage Network, for example, uses the National Living Wage Framework developed by the Canadian Centre for Policy Alternatives to calculate the figures for communities across the province. For a fee, the Network will certify employers who meet its guidelines as living wage employers, including worker co-ops.

While worker co-ops can’t automatically afford to pay a living wage, their inclination to do so is not, or at least should not, be at issue. Sonja Novkovic of Saint Mary’s University finds it hard to conceive of a worker co-op that wouldn’t seek to pay a living wage, in contrast to conventional businesses whose main aim is maximizing profits for investors.

I think they’re more inclined to want to pay a living wage and not question whether that is a good idea or not,” she says. “I cannot see how a worker cooperative where workers are making decisions would ever not pay a living wage if they can afford it.”

Indeed, if some worker co-ops pay less than a living wage it is generally because paying higher wages would threaten the viability of the co-op.  In those cases, it is fair to say that the members hope to eventually pay at least living wages, as their co-op evolves. 

Belonging to a worker co-op would seem to offer an advantage in this respect for food and beverage servers, who generally earn well below a living wage. But the experience of two Ontario brewpubs shows the question of whether worker co-ops can “afford” to pay these workers a living wage is more complex than it might appear at first glance.

The desire to pay a living wage was a key motivator for the Kitchener, Ontario brewery Together We’re Bitter. Even before opening in 2016, TWB’s founders knew this would be a priority.

“It was part of our foundation,” says co-founder Alex Szaflarska. “We knew that as a worker co-op, we wanted to put worker interests and needs at the core of our operations and prioritize that when it came to our business planning and our strategic planning and everything like that.”

TWB achieved this milestone in early 2020 and has maintained its certification from the Ontario Living Wage Network ever since. 

“During an uncertain time and with a lot of pressure, we continued to make this a priority and we’re able to make it happen,” says Szaflarska. “So that’s something that I’m really proud of because it took a lot of planning and a lot of work.”

Complicating the living wage issue for TWB was its choice at the outset not to accept tips from customers, a decision it made for both practical and ideological reasons. 

“The practice of tipping is often tied to and entrenched in systems of racism, sexism, and classism that already exist in society and that’s reflected in tipping,” Szaflarska says.

“We know it’s still part of society and it’s part of the way that this sector operates,” she adds. “We don’t want to be judging other businesses who make these tough decisions in a different way. But this is what felt right for us.”

Fellow brewpub London Brewing, in contrast, continues to allow for tipping. Emma Maganja says that because the Ontario Living Wage Network’s guidelines don’t allow for participating businesses to include tipping in their living wage calculations, the brewery decided not to continue its certification with them. She adds, however, that when tips are included all of London Brewing’s members and workers earn a living wage, although the Co-op shares TWB’s concerns about tipping as a practice.

“Philosophically we’d love to get rid of (tipping),” she says. “The problem is at this point practically when we really get down to what it would look like to pay everybody what they are accustomed to making, it would either increase our prices so much that we’d end up losing business and it would result in reduced hours and not building our team up anymore or it would result in everybody taking home significantly less money. So I think what we have done to this point, even though it’s not the most aligned with where we’d like to be, has made the most sense for our employees and our customers.”

Thus while TWB’s experience shows paying servers a living wage that doesn’t include tips is possible, the case of London Brewing suggests it isn’t easy. Broader economic and social changes are clearly necessary so that paying all workers a living wage is a given, rather than an exception.

Photo by Victor Ballesteros on Unsplash