Monday, July 14, 2014

Giving Credit Where It Is Due

Over the years on this blog, I have been deeply and justifiably critical of the excesses of unfettered capitalism. Degradation of the environment, activities contributing to widescale climate change, and exploitation of labour have been some common targets. Yet every so often, something comes along to show that not all businesses are based on such a rapacious and monolithic model.

In yesterday's business section, The Star reported on a number of enterprises that puncture the myth that paying ones's employees more than the minimum wage is a shortcut to bankruptcy, a favoured assertion of the right.

One of those enterprises is Coffee Pubs,

where the starting wage is 50 cents higher than Ontario’s $11 an hour minimum wage. Full-time staff can start earning an ownership share in the company after six months of service. The business has also expanded to include bartending and catering services. It has 16 employees; workers start at $11.50 an hour and qualify for medical and dental benefits after three months. Managers earn about $30,000, and the Cluleys, the husband and wife owners, say they pay themselves slightly more.

A small company with only two location, Coffee Pubs's decision to depart from the conventional pay model is a bold one, given that employee remuneration in a small operation is a much greater factor in overall costs than in large enterprises.

So why did they do it? Both serendipity and social conscience seem to have played roles.

Their first site, at Bloor and Bathurst in Toronto, is leased from The Centre for Social Innovation, which offers rents geared to revenue. Their second venue is at Artscape Youngplace, a collaborative public space in a former elementary school that’s home to artists’ studios, galleries and an Ontario Early Years Centre.

The Cluleys say that their advantage comes from the strong relationships they’ve forged with local vendors, tenants and walk-in customers from the surrounding neighbourhood. They estimate they have about 100 to 150 customers each day and about half of them work in the building.

The other part of the equation is their philosophy:

“We could use cheaper ingredients and pay the staff less and make more money. We know that this way isn’t going to get us wealthy but we believe in the model,” Erin said.

“We believe if we are patient, we can make a big difference. We want to show there’s another way to run a business that’s not just profit for its own sake.”

The article includes reference and links to other organizations promoting similar values, but on a larger scale, such as B Corporation and Wagemark Foundation.

Like industry leaders including WestJet and Costco, more and companies are discovering that treating employees with dignity, respect and decent wages has tangible benefits:

They argue firms that create high-quality, well-paying jobs and treat their workers better will have a more loyal and engaged workforce, leading to better bottom lines, and better end results for everyone.

We can only hope that this model, which in many ways is the antithesis of the rapacious and unfettered capitalist one widely practised today, ultimately becomes the norm. We, of course, can do our own part by patronizing such enterprises and spreading the word about them with any means we have at our disposal.


  1. Founder of the Ford company had similar philosophy. He paid his employees well so that they could afford his product. That is why his company was so successful. That part modern capitalists forget.

    1. Capitalism today seems to have drifted far from Ford's vision, hasn't it, LD?

  2. Hi Lorne. I suspect it isn't so much the small entrepreneur/managerial class but the investor/finacier/rentier class that fuels wage suppression. Those focused on maximized return on investment are typically short-term oriented, adept at moving their money from one opportunity to the next, extracting maximum return even at the cost of undermining the business. Our failure to push back forcefully against vulture capitalism merely ensures its perpetuation.

    "At many stages in the advance of humanity, this conflict between the men who possess more than they have earned and the men who have earned more than they possess is the central condition of progress. In our day it appears as the struggle of freemen to gain and hold the right of self-government as against the special interests, who twist the methods of free government into machinery for defeating the popular will. At every stage, and under all circumstances, the essence of the struggle is to equalize opportunity, destroy privilege, and give to the life and citizenship of every individual the highest possible value both to himself and to the commonwealth.

    "We grudge no man a fortune in civil life if it is honorably obtained and well used. It is not even enough that it should have been gained without doing damage to the community. We should permit it to be gained only so long as the gaining represents benefit to the community. This, I know, implies a policy of a far more active governmental interference with social and economic conditions in this country than we have yet had, but I think we have got to face the fact that such an increase in governmental control is now necessary."

  3. Teddy Roosevelt's words are as relevant today as when he first spoke them, Mound. Unfortunately, we live in an age where any talk of the common good when it comes to capitalism is anathema and synonymous with sedition, a view that is vigorously promoted by the handmaidens of the corporate agenda, the mainstream media.

  4. Interestingly enough, Lorne, I stumbled across a Republican governor preaching the gospel of 'the commons' in, of all places, Kansas where Roosevelt delivered his Square Deal speech. The commons being referred to is the rapidly draining Ogallala aquifer vital to agriculture in the eight states that make up America's breadbasket.

    NBC News is running a series of reports, The Last Drop: America's Breadbasket faces Dire Water Crisis. As the aquifer drains a group of Kansas farmers are going all progressive on us. They've entered into a binding agreement among themselves to limit their water use to 55" total over the next 5-years. That's still far in excess of the Ogalla's recharge rate but it would barely be enough to irrigate corn fields for just two years. So they're looking at having to change crops and land use in order that there'll be something for their children to farm when they come of age.

    Kansas, of course, was the birthplace of the progressive movement of the early 20th century. More recently it went hard right. Perhaps climate change will trigger the rebith of American progressivism in its very heartland. Here's a link to the first episode.

    1. Thanks for the information and the link, Mound. I shall check it our.