Coffee profits are grounds for a raise

On Wednesday, the company released its annual results, testimony to the countercyclical resilience of Canadian coffee drinkers. Same-store sales grew 5 per cent in Canada. Net income more than doubled, to $624-million. In fact, thanks to Canadians’ unquenchable thirst, Timmies is boosting its dividend a third, and buying back $445-million of its own shares. These are sure signs that a company has more cash than it knows what to do with.

The Globe and Mail
February 24, 2011

Coffee profits are grounds for a raise
Jim Stanford

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Talk about a recession-proof industry. Canadians love their double-doubles. But an economic downturn gives us more time (and more motivation) to suck back the java.

In this country, of course, Tim Hortons is the king of coffee. On Wednesday, the company released its annual results, testimony to the countercyclical resilience of Canadian coffee drinkers. Same-store sales grew 5 per cent in Canada. Net income more than doubled, to $624-million. In fact, thanks to Canadians’ unquenchable thirst, Timmies is boosting its dividend a third, and buying back $445-million of its own shares. These are sure signs that a company has more cash than it knows what to do with.

While analysts drool over the cold profits, I prefer to pay my dividend to the people who brew my hot coffee. The wait staff at Tim Hortons (and every other coffee shop in the land) play an essential economic, and dare I say psychological, role in our society.

There’s a stereotype that fast-food work is low-skill and undemanding. That’s nonsense. It takes practice and constant mental concentration to track, sequence and prepare orders. It’s dangerous, too: Scalds, burns and cuts are par for the course. There’s even a hefty dose of what sociologists call “emotional labour”: providing an appreciated friendly human interaction along with the beverage. A typical CEO wouldn’t last a day in this job.

Like most Canadians, I patronize dozens of coffee shops in my travels, and appreciate them all. But some of my favourite Timmies staff really stand out:

  • The mostly Tamil women crowded into a corner of the Esso station near my office. I’ve counted seven during busy hours, in a space not much bigger than my bathroom, weaving amongst each other in a respectful but efficient ballet.
  • The Caribbean woman who presides like a general over the morning shift at a franchise just off the Queen Elizabeth Way, parlaying customer orders while partaking the daily gossip from dozens of patrons whom she knows by name.
  • The tiny kiosk at Toronto’s Princess Margaret Hospital where there’s always a huge lineup of staff, visitors and even patients but where an efficient tag team of only two workers always serves the brew within a couple of minutes.

Our coffee-shop and fast-food work force is low on prestige, yet provides an essential national service. More than 320,000 Canadians work in what Statistics Canada euphemistically calls “limited-service eating places.” Employment grew right through the recession. Wages average just under $12 an hour. That’s very low but has grown decently in recent years, thanks to higher minimum wages in most provinces.

But the current anti-worker backlash in North American politics may be jeopardizing that progress. For example, just last week, Ontario (which led the way to a $10 minimum wage) decided to freeze the benchmark for a year, bowing to business lobbyists. Will reducing the real purchasing power of our poorest workers revitalize the labour market? Hardly. But it will ensure that Tim Hortons’ supercharged profits get even better next year.

Tim Hortons executives should share the wealth with the workers who created all that value now reflected in the company’s balance sheet. Governments should facilitate the sharing, through stronger minimum wages and labour laws. As for us grateful customers, please say a respectful thank you to the next person who serves your coffee – and drop at least a quarter in the tip jar.

Jim Stanford is an economist with the Canadian Auto Workers union.

http://www.theglobeandmail.com/news/opinions/opinion/coffee-profits-are-grounds-for-a-raise/article1918060/


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