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Contrary to what the political right says, these increases will benefit the whole province

The Alberta government recently announced their schedule of minimum wage increases for the next three years. The New Democrat platform in the last provincial election included a promise to increase the provincial minimum wage to $15 per hour by 2018. Last week’s announcement accomplishes just that, with scheduled increases of $1 on October 1, 2016, a further increase of $1.40 on October 1, 2017, and another $1.40 on October 1, 2018. The province also announced the elimination of the two-tier minimum wage whereby workers who serve alcohol had a lower minimum wage than anyone else.

The push toward a $15 minimum wage is not exclusive to Alberta, as many jurisdictions across North America will be moving in that direction over the course of the next couple of years. The premise is simple: anyone who is working full-time should be able to afford the necessities of life—shelter, food, clothing—with their earnings. Sadly, in Alberta, that has not been the case for some time now: over the past few years, cities across the province have reported a significant—and growing—gap between the provincial minimum wage and what would be considered a living wage. The result has been growing numbers of full-time workers being forced to access food banks and work significantly more than full time to pay for rent and utilities. Alberta has the dubious distinction of having both the highest and fastest growing rates of income inequality in the country.

The response to the government’s announcement by the province’s radical right and the business lobby was predictable. The Canadian Taxpayers’ Federation (CTF), the Canadian Federation of Independent Business (CFIB), the Wildrose Party and Restaurants Canada all chimed in with similar-sounding assertions: now is not the time for an increase (although none said when a good time would be); the move will cost thousands of jobs and force businesses to close; and a minimum-wage increase would further deepen the current economic slump.

The problem with all those assertions is that the bulk of the research that has been done on the subject does not support any of them. In fact, the research shows the opposite: increasing the minimum wage will have negligible to no impact at all on jobs, the economy, prices or the success rate of small businesses. If there is an impact on jobs, it will be small and focused almost exclusively on teenagers and particularly low-skilled workers. It will not, by any stretch of the imagination, bring the entire economy to a screeching halt.

As spokespersons for the CTF and the CFIB tossed around words like “irresponsible” and “ideological” to describe the government’s move, they never once stopped to explain how a minimum wage that prioritizes business profit margins at the expense of people’s ability to access the necessities of life is responsible. It is also almost comical to hear these groups describe the government as ideological while failing to acknowledge that wage suppression is at the very core of the ultra-right wing neoliberal doctrine they espouse, and which is echoed loudly by the likes of the Fraser Institute and Frontier Centre for Public Policy, and whose promotion is handsomely funded by the likes of the Koch brothers and Canada’s corporate elite.

To accuse what is ultimately a centrist government of being ideological—while acting as foot soldiers for the low-wage, low-tax, anti-government, pro-privatization mantra of the extreme right—is absurd and highlights the degree to which these groups should not be taken seriously.

Ultimately, a $15 minimum wage will make a significant difference for the almost 300 000 Albertans currently earning less than that. And when you factor in the reality that low-wage earners tend to spend 100 percent of their paycheques, putting more money into these people’s hands will directly translate to more money being spent in the local shops and businesses where they live—which can’t help but be good for the economy.

In fact, when you consider that a living wage in places like Edmonton, Calgary and Grande Prairie would currently be more than $15 an hour, a strong argument could be made that the government did not go far enough in their announcement—but that is an argument for another day. For now, let’s celebrate that the government has fulfilled this promise and that our entire province will benefit from it. V

Ricardo Acuña is the executive director of the Parkland Institute, a non-partisan, public policy research institute housed at the University of Alberta. The views and opinions expressed are his own and do not necessarily reflect those of the Institute.

3 Comments

  • Ricardo Acuña is the executive director of the Parkland Institute, a non-partisan, public policy research institute housed at the University of Alberta. The views and opinions expressed are his own and do not necessarily reflect those of the Institute.

    Seems pretty partisan to me.. I think its almost universally known now that a $15 minimum wage isn’t sustainable in Alberta let alone Ontario.. This whole plan is insanity.

    Alberta and Ontario will be subsidizing California in a few years..

    I think we have bigger problems!

  • Hey I’m a small business owner in Alberta guess what 15$ minimum wage means to me, it means that after running my numbers I know that instead of hiring 2 extra staff for summer next year I will only hire 1. And that is a FACT. Labour is steadily approaching my number 1 expense and one of the few expenses that I have any control over. In the long run its not going to bankrupt my business you are right but I will absolutely not hire as many people as I used to. maybe that’s just me but limiting rising expenses when profit margins are remaining stagnant sounds like business 101 to me.

  • If you are unable to make a go of it paying your employees a fair and decent wage then perhaps you need to be an employee instead of an employer. Be creative in your business. Find ways to expand and grow without riding on the backs of your workers. Pay fair and you might get more productive workers. Happy and healthy staff are known to bring more to the workplace. I’m sure , as business people, you prepare for the unexpected. You have contingency funds, right? If you don’t have some sort of cushion, then perhaps you shouldn’t have gotten into the small business game. Governments change their policies often and business must be flexible. Never spread yourself too thin. One never knows what is around the corner. Business 101, eh? In this case the government is rolling out their plan over years, not months. People say the timing is wrong. I can guarantee you that all the opponents of this would never think it is good at any time, even during boom times. Too many minimum wage earners are on social assistance paid for, in part, by tax payers. Perhaps if these people were paid a proper wage by their employers the tax payer would need to shoulder less of the burden in social programming. People complain that the cost of goods and services will increase. That’s crap for the most part but some businesses will try to pass the added expense onto the consumer. For sure. But we will see who is truly competitive and worthy to be in business. What we might see is a shift in competition. The playing field might become smaller as some won’t be able to hack the new reality but ultimately communities will still require the same services and goods and overall employment won’t suffer from higher wages. Workers will just move from one employer to another. It’s interesting how in Alberta people weren’t complaining about the high pay oil industry workers were getting. Why, I wonder? Perhaps it was because of the extra cash being put into the hands of workers that actually helped large and small businesses alike. Business 101, eh?

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