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Baristas unite: The future of the coffee economy

Are service-sector jobs the new ticket to the middle class?


 

Jake Curtis / Getty Images

Just Us Coffee Roasters Co-op in Nova Scotia isn’t the kind of business that seems ripe for an employee revolt. The worker-owned co-operative serves up fair-trade organic coffee, pays above minimum wage and offers employees perks such as health benefits, profit-sharing and money to buy shoes.

Yet earlier this year, the company found itself at the centre of a growing protest movement among baristas in Halifax. In April, workers at the Just Us on Spring Garden Road complained that managers were denying them 30-minute breaks and that two employees had been fired for trying to start a union drive, sparking a wave of demonstrations. Workers at the store recently voted to join the Service Employees International Union, prompting workers at two Second Cup shops in Halifax to launch their own union drive this month, saying they want more control over scheduling and how to divvy up their tips.

While unionized coffee shops are rare, similar protests are playing out far beyond Halifax, as workers are faced with an economic recovery marked by the growth of low-wage service jobs and the continued hollowing out of traditional middle-class manufacturing positions. Last week, thousands of workers at fast food and retail chains in seven U.S. cities walked off the job, demanding their wages be doubled, to $15 an hour.

The nationwide strike came as President Barack Obama visited an Amazon fulfillment centre in Tennessee last week to tout his proposed middle-class job-creation programs. The visit, coinciding with Amazon’s announcement that it would hire 5,000 new warehouse workers, sparked a fierce outcry among independent booksellers who complain that Amazon is precisely the kind of company that has contributed to the decline of the middle class by employing poorly paid workers under punishing conditions in order to slash costs.

In Canada, as in the U.S., politicians have been quick to point to the hundreds of thousands of new jobs created since the recession as proof of a strong economy. But of the 463,000 new jobs created between January 2011 and February of this year, nearly a quarter of them were in accommodation and food service, according to a Statistics Canada study. Food-service jobs grew by 11 per cent over the past two years, compared to overall job growth across the economy of just 2.7 per cent. Meanwhile, the country has continued to shed manufacturing jobs, losing 52,000 workers in the past two years, while the retail sector remains Canada’s biggest employer.

It is into this environment that more young workers are graduating from college and university, armed with huge student debts and few professional job prospects. In the time it has taken for the economy to add roughly half a million new jobs, another 434,000 new grads have entered the workforce. And it seems all but certain that many will end up working in low-paying service jobs with few benefits. That shift—more educated workers coupled with more low-skilled, low-pay work—is having a dramatic impact on an industry whose workforce was traditionally made up of teenagers and workers with little education. Where once the biggest headache for retailers was high turnover, today those companies are increasingly facing push-back from a workforce demanding more from their jobs: more money and more hours, but also more say over their working conditions as they try to carve out a path into the middle class.

Roughly two-thirds of the 75 employees of Just Us are full-time, a noticeable change from even three or four years ago, says company co-founder Debra Moore. Last year, Moore surveyed employees on whether they wanted to scrap their health benefits in exchange for higher hourly wages. The response was a resounding “no,” as workers said they needed the benefits because they were settling down and starting families.

“We’re not part-time transient positions anymore,” says Shay Enxuga, 23, one of the baristas who organized the Just Us union drive. Last year, facing the prospect of racking up $30,000 in student loans and watching friends graduate without jobs, Enxuga dropped out of Dalhousie University to work full-time as a barista. “We have a whole generation of youth who are entering the workforce and are finding themselves working service jobs,” he says. “So I think the model of what it means to work in the service industry has to change.”

Proponents of the idea that service jobs can become the new ticket to the middle class point to sweeping changes in the manufacturing sector in the early 20th century that helped transform factory work from dangerous low-pay jobs into secure careers that could support a family. From 1914, when Henry Ford declared he would pay his employees what was then an exorbitant sum of $5 a day in order to reduce turnover and boost demand for his cars, governments saw higher wages and greater workplace regulation as the start of a virtuous economic cycle. But whether the service industry can follow the same model is far from certain.

Moore says the dispute over working conditions at Just Us was driven by the fact that the company was coming off a particularly bad year. “I don’t think there’s any magic answers that I can see,” she says. “The way our retail world is set up and what people are prepared to pay, it’s a challenge.”

Labour laws also haven’t kept pace with the dramatic shift toward a service-based economy, says York University labour and employment law expert David Doorey. Where once unions could sign up hundreds of workers just by standing outside the doors of a factory, they’re now chasing part-time employees with erratic schedules. And while a strike at a single auto plant employing thousands of workers could bring a company to its knees, a café can likely weather an extended walkout by bringing in a few extra managers to work overtime.

If service jobs are to become the new middle-class employment, it will mean paying our workers more, says Richard Florida, an urban scholar and head of the Martin Prosperity Institute at the University of Toronto. That might mean indexing minimum wage to the local cost of living so that expensive cities like Vancouver and Toronto pay higher minimum wages than cities like St. John’s or Winnipeg. (Minimum wages vary by province, but run from $9.75 in Alberta to $10.30 in Nova Scotia.) But that will also mean paying more for our burgers and fries. While consumers may have once been willing to shell out more for high-cost manufacturing goods to help support a middle class, it’s less clear they’ll want to pay more for their coffee and groceries. “Who’s more important,” says Florida, “the person who makes your car, your TV and your washing machine? Or the person who takes care of your kids, your parents, your house and prepares your food?”

Changes are already under way in the beverage industry, where consumers have proven they are willing to pay a premium for products such as fair-trade coffee and artisanal cocktails, spawning demand for latte artists and mixologists. Experienced baristas can command as much as $17 an hour in some cities (the equivalent of roughly $33,000 a year), says Vida Radovanovic, who runs a barista training school and espresso bar in Toronto. “My sales go up when that person is behind the bar,” she says.

Boosting service wages doesn’t necessarily mean we’ll be paying dramatically more for products, either. According to a letter sent to the U.S. Congress last month, signed by more than 100 American economists, raising the federal minimum wage from $7.25 to $10.50 would increase the price of a Big Mac by 10 cents.

Such thinking has its fair share of critics, who argue that a better way to drive economic growth is to invest more in education so that today’s fast-food workers can become tomorrow’s entrepreneurs and skilled workers in advanced manufacturing rather than slinging burgers at McDonald’s for more money. “The future for American blue-collar workers is to build better solar panels, more reliable electric-car batteries and to construct bullet trains,” writes Danny Leipziger, a Georgetown University professor and former World Bank director.

Those jobs are also needed, says Florida, but they won’t be enough to stem the flow of workers into service jobs, he adds. For every new manufacturing job, we create 12 new service jobs, he estimates. “If we don’t turn service jobs into good jobs, we won’t have good jobs,” he says. “If we want a middle class, all of us are going to have to pitch in to figure it out.”


 

Baristas unite: The future of the coffee economy

  1. ‘Like many other First World nations, the Canadian economy is dominated by the service industry, which employs about three-quarters of the country’s workforce.’

    http://en.wikipedia.org/wiki/Canada#Economy

    This is doctors, lawyers, teachers, bankers…..

    Baristas need more education to get ahead. ‘Demanding’ more money won’t work.

    • Agreed, go get the job you want instead of trying to change the job you have into the job you want.

      • Political Junkie, you really think that the world would be a better place if workers never fought to improve their working conditions and just quit, or accepted whatever their employers offered, with no resistance pr push back, ever? Wow. Learn your history. Every law we have in Canada that protects workers is a result of workers doing exactly what you say they should never do.

        • There’s no greater incentive to improve one’s lot in life when you finally wake up to the fact that you’re just not going to make a decent wage at what you’re currently doing now. Those people who take this lesson to heart will be the entrepreneurs of tomorrow and are hopefully in a better position to treat their workers well. Then its a whole new ballgame. Learning how to deal with employees.

          • What about the people who do not have an academic mind, what is it that you expect from them?

          • metropika
            Sorry; what I meant to say was, what is it that should be expected of them?

          • You have a moral responsibility to make something of your life. Those people who want to be successful will find a way regardless of the obstacles in their way. There’s a story about an old Italian bricklayer who immigrated to the US in the 1950’s with just $20 in his pocket and made a million dollars from the construction industry. And he managed to do this in spite of his own admission that he had no formal education to speak of.

          • Some of the best paid people are in sales. You need to be extroverted and driven to succeed.

        • No, I believe the world would be a better place if individuals negotiated with their employers based on their own personal merit and value to the company to improve their working conditions.

          A natural flow of people from low demand fields to high demand fields raises the standard of living of everyone. In addition removing people from low demand fields stops them from becoming even lower demand fields.

      • Yeah, people waste a lot of time on stuff like this instead of getting on with their lives elsewhere.

        These jobs should be left to the students, the elderly looking for a social life, and immigrants starting out.

    • Phil and Sebastian Coffee Roasters…..two young Calgary engineers who became multi-millionaire baristas.

    • They don’t need more education, they have too much, they need different education. There are so many people graduating from useless degrees that don’t create any skill set. Your political science degree, humanities degree, women studies degree, it’s just 4 years of nonsense in a lot of cases. You graduate qualified to run the world, but president of the United States can be hard to get. The other main thing you get is a sense of entitlement from 4 years of education in a setting very sympathetic to Marx. We have good paying jobs available in the trades for anyone smart enough to forgo a BA and roll up their sleeves. These people need to create more value, the best way to increase your pay is to increase your productivity.

      • There is no such thing as ‘too much’ education.

        Kindly stop with the nonsense that everyone has to be a plumber, and no one should study anything else useful like the humanities.

        Had you done so, you wouldn’t confuse Marx with everything else.

        • The problem is not too much or too little education. It’s the lack of collaboration between schools, employers, and governments. That and skyrocketing tuition fees.

          If we had better collaboration, we could reduce the oversupply in certain fields such as teachers and boost employment in areas where workers shortages are present. It’s time for a national post-secondary education strategy in Canada.

          • The Soviets tried collaboration like that but it didn’t work. Put a lot of square pegs in round holes.

            Lots of things are efficient on paper, but don’t work in real life.

            You’re not going to get teachers to go work in the Alberta tarsands.

            The problem in this particular article is people trying to make a career out of what is just a job.

          • I have a cousin who drives a very large truck in the tarsands. She works 1/2 time and makes $150K a year. I’ll bet many teachers would take that job.

          • Some might, most wouldn’t.

            If you want to teach, you don’t want to be a truckdriver.

          • There aren’t any teaching jobs to be had in Alberta.

          • Then move.

          • Let’s see….get paid $30K to teach 30 kids or $150K to drive a truck 1/2 time…..hmmmm…..and you don’t have to move….and no education required.

          • Most people think about more than money.

            Unless you are in emergency survival conditions, people want some meaning in their lives

          • Teachers are among the most maligned and disrespected professions there is. No one is grateful for their sacrifice. All they see is that they get the summer off.
            Further, the governments don’t want to pay them worth crap and there are too many of them.
            They are laying off nurses now as well.
            You can have a rich life full of ‘meaning’ outside of your work. You can do all kinds of volunteering and you can take courses to better yourself. Plus, when you make decent wages, you can afford to travel and be generous to charities.

          • Nothing to do with the topic here….and teachers are well paid.

          • Elementary teachers in Ontario make close to six figures. This I know for a fact. So much for getting paid crap.

            New grads make at least half that their first full time year.

          • Yes, Emily told me that. Quebec new grads make $38.710. However, it doesn’t matter because there ARE NO JOBS. Ontario teaching school just halved its enrollment. There are a whole lot of teachers that are not ready to retire and they are graduating young people who can’t get a job. It is no different in Ontario than it is in Alberta.

          • Alberta teachers make up to $100K. And $150K driving half time seems odd.

          • Teachers in Ont don’t work for 30K either!

          • We are talking about a new grad.

          • You might be, no one else is.

          • Well in Alberta they hire the new grads for one year and then let them go before they have their permanent license so that foot in the door is actually a foot in the butt.

          • Flash….Alberta is not the world.

          • Yes but you said “no teacher is going to work in the Alberta tarsands.” Surely even you can’t be surprised when someone who lives in the province enlightens you with regard to the employment realities for Alberta teachers in Alberta schools versus what they might find in the tarsands.
            I never said Alberta was the world but then it isn’t me who brings it up in almost every thread. That would be you, Emily.

          • a) this article is about baristas pay

            b) you are the only one discussing teachers pay

            c) and not all teachers get the lousy pay they do in Alberta.

            Annual starting salary for a new teacher at lowest and highest pay rates: $45,709, $55,404

            Salary for a teacher with more than 10 years of service at the lowest and highest pay rates: $76,021, $94,707

            http://www.theglobeandmail.com/news/national/education/anatomy-of-an-ontario-teachers-paycheque/article6015968/

          • Quebec: 38,710 = lowest paid to 75,300 = highest paid. Ontario isn’t the world either. If it were…I would expect that YOU know that your own teachers college is halving the number of students it accepts because there aren’t any teaching jobs in Ontario either (as reported by CBC news on June 5, 2013).

          • Only Albertans think it is….which is why they’re always trying to play catch up.

            Ciao

          • I owe you an apology Emily. It seems Alberta actually “leads the way” in teacher pay. Our starting teachers with a four year degree make $58, 500. However, you only make that money if you get a job and you can’t in Alberta or Ontario or my guess is in many provinces in Canada.

          • Now you’ve brought degree years into it, and not mentioned teacher’s college…ai yi yi….’rolls eyes’

            You are also only discussing jobs in the public system. There are lots of teaching positions open.

            So now you’ve been all around the mulberry bush in response to RZ, who isn’t even here…..Ciao

          • Not everyone has a “teachers college”. In Alberta you get a bachelor of education…four, five or six years and you get paid according to the amount of years of education you have. A teacher with 6 years of education and 15 years experience makes $99K a year. There is no such thing as a “teachers college” in Alberta and my guess is it doesn’t exist in other provinces either. You get your B.ed and you apply to the province for a teaching license.

          • Look up the one for Canada. Ontario is the only province with a teacher’s college. Everybody gets a bachelors of education and applies for a provincial license upon graduation.

          • HI….nobody cares.

            Now do you need a translation for Ciao as well??

          • If I do, I will get it from Paul Wells…..Ciao!

          • That’s nice. Aloha.

          • Teachers are also typically unionized in Canada, have powerful unions and therefore get generous defined benefit pensions, which most of us can only dream of having. I appreciate what they contribute to society (teach part-time myself), but they’re very far from being oppressed or victims or anything like that. Relatively speaking, compared to most of us, they have it pretty good — once they get into the system.

          • Yes….once they get into the system. There aren’t jobs for the number of graduates. Also, teaching 30 grade 2 students is hardly easy work and not many outside of parents appreciate what they (you) do. Go on any online site and check it out.

          • No starting teacher is getting $100K. I am a nurse at the top of the rate of pay (in Alberta) and we make $90K. The teachers making $99K have 15 years of experience and SIX YEARS of university education. The problem still remains that there are no jobs for new grads in Alberta. They are willing to hire them for one year but they cannot hire them for two years because then the teacher has a permanent license and a permanent job according to the union (the ATA) so what they do is keep hiring new grads and letting them go after one year. Then these new grads are stuck because they can’t get another job in the province unless they go into the private education sector which thank goodness is quite popular in Alberta.
            As for my cousin…she has been driving for quite awhile. She works for Syncrude. I believe she works nights and she drives a truck with wheels taller than she is.

      • I understand what you are saying…that an advanced education does not necessarily equip a person to actually perform a job that pays decent money. The other issue is that an advanced education does not necessarily mean a person will be equipped with the common sense required to function in positions of authority.

    • Most of them are over-educated. They don’t need more education. Granted they probably studied the wrong things, because they bought the propaganda sold to them.

      It is just that the financialization economy cooked up by Chrystia Freeland’s Wall Street bankster buddies to enrich themselves (at the expense of everyone else) doesn’t work, except for the banksters.

      • Yes, what they need is exactly that. MORE education.

        Are you not the one claiming to be a PhD?

        Why can’t other people have an education?

        • I like education. The problem is that we tend to mistake schooling for education. Putting yet more marginal students into undergraduate classrooms (or even graduate schools) isn’t education. It’s expensive babysitting.

          Instead of fueling credential inflation, we need to do more to support self-directed learning outside the classroom. People learn best when they are interested, and when there are stakes at play.

          • Well I’ve said for years that our entire educational system needs to be tossed, and an entirely different method of education should be brought in.

            Dealing with the one we currently have though….lots of people have dawdled through school and gone on to great things. In spite of educations best efforts to stifle creative gifted people and turn out clones…many of them have made it. Even through to Nobel prizes.

            But everyone….brilliant or not….needs an education. Needs that general knowledge. Or they simply can’t function in today’s world.

  2. One jar of instant coffee for about $4.00 lasts me three months, And it’s better tasting, and way cheaper, than ANYTHING Starbucks has to offer – except for the Starbucks “experience” of course. That way I don’t need to pay for any exploiter’s (overpriced) 90% profit margin.

    • This comment was deleted.

      • One’s taste is just that: “a matter of taste”. There is no “right” or “wrong” in that category.

        • Very true… but first you have to drink coffee. Heh.

  3. So who decided that service jobs should be minimum wage jobs?
    Nothing happens until somebody sells something. Loyal employees are those whose service is valued and that value is translated into cash.
    You get what you pay for. Any smart employer knows that.

  4. This article appears to be suggesting that the road to the middle class is through unionization. I totally agree.

    • The road to unemployment is through unionization. In North America, outside of protected monopolies, unionization has meant loss of jobs.

      In this type of job, the key to a successful operation is the ability to get rid of people who don’t do the job well. A grouchy server means people will go elsewhere. Someone I know who is in this business treats his employees extraordinarily well, pays very well, and importantly, when someone is not up to the demands of dealing with hundreds of people every day, he encourages them to find other things to do, including paying tuition and moving expenses so they can pursue other opportunities. He can continue to pay his employees well because he maintains a very healthy customer base. A union, as unions are currently structured, would kill the business. Not because of pay, but because some union rep with a standard contract has no idea what makes the business work.

      I am pro union but consider the current unions for the most part in Canada as filled with vacuous twits who could not exist but for the forced extraction of dues from government employees. Being organized by these folks may solve the problem of an obstreperous employer; but at the cost of your employment.

  5. Why is it that improved minimum wage = higher cost to the consumer to conservative economists. It seems the recession has been all about the people in the middle taking a haircut, maybe its time the same thing happens at the top. Mcdonald`s 2012 executive compensation was $67.5 million, up 232% from 2011. If they need to find cost reductions to be able to pay a living wage and still provide a competitively priced product they should start at the top and work from there.

  6. In this debate (about having an economy that works better for a greater number of Canadians) there are many conveniently ignored facts about reality that it makes such a discussion hardly any productive at all.

    Fact #1: unemployed and underemployed Canadians outnumber interesting job openings by a very large margin. There is not room enough in the middle, least of all at the top, to absorb all of us, even if we all had a Business PHD from a world class university + the skill sets required to work on the Alberta Tar Sands production.

    Fact #2: Canadians love their McDonalds, Tim Hortons, Wall Marts… if we all had the education and skill sets required for a well paying job (see above fact #1) who would be left to serve us coffee in the morning?

    Fact #3: Globalization has meant that it’s less expensive to outsource production of goods and all services that doesn’t require a human presence on hand (such as serving a coffee or checking out purchases locally). This phenomena has worked to level wages at the bottom here. The only way to reverse this would be for the world to experience a major energy crises rendering the production of goods more viable on a local level.

    Fact #4: Through no fault of their own, there is a large number of Canadians that do not have the intellectual, physical or whatever capacity to do highly skilled work. We still need way more janitors, cashiers, garbage collectors than we need CEOs.

    Fact #5: Ever since the late 1960’s the economy (at least in Western countries) has been good (if not excellent) for one particular group and their elders. Sorry boomers! If you were born after 1960 you might still be living a good life but you had it harder than your older relatives.

    In the name of equity, and because low paying service jobs are where the growth is (for now anyway, perhaps in the future massive retirements of the babyboom generation will completely change the picture) I support seriously upgrading the minimum salary. On the negative side yes people from the middle class would spend the same but require less goods and services (job loss in those sectors) On the positive side those left to work the previously low paying service jobs would spend more and pay more taxes. It might just equal out? In any case, I would argue that such a move would have a positive effect on a phenomena I despise: growing inequalities in revenues.

  7. I surely hope that an automatic minimum wage raise does not happen unless all wages are tied to said increase. This will do nothing but water down the wages that middle class workers receive thus drawing us closer to being forced out of the middle class. Why shoild i stand on the other side of a McDonalds or Tim hortons counter, knowing that the server on the other side is approachingmy middle class wage level when we are the ones whp have struggled and properly educated ourselves to enter that class. If you have chpsen poorly in regard to your education and training, then you should exercise your option to retrain as many others have. Suck it up princess you produce little of value, so little value is given for it.

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