Alberta’s hourly minimum wage is currently set at $11.20. As of Oct. 1, 2016, the province’s general minimum wage will rise $1.00 to $12.20 per hour.
Also in October, Alberta will eliminate the separate minimum wage for workers who serve liquor. Most provinces do not have different minimums for liquor servers or other categories or workers (like youth).
Minimum wage will rise a further $1.40, to $13.60 per hour, on Oct. 1, 2017, and by $1.40, to $15 per hour, on Oct. 1, 2018.
Alberta has the highest average and median wages in the country (by a very significant margin).
The average hourly wage in Alberta was $30.10 in April 2016. The Alberta median was almost exactly the same as the median – an even $30.
As a proportion of its median wage, Alberta still has the lowest minimum wage in the country – even after factoring-in last year’s jump from $10.20 to $11.20.
Alberta’s current minimum wage is equivalent to only 37 per cent of the median wage for prime-age workers (aged 25-54). This contrasts sharply with other provinces (where the minimum is usually 45 and 50 percent of the average wage) and Alberta itself in the 60s and 70s (when the minimum wage was about 50 per cent of the average wage).
The Alberta Federation of Labour feels strongly that people working full-time hours should earn enough to ensure that they and their families can live above the poverty line. How much would a person have to earn in order to achieve that goal?
According to research conducted by Vibrant Communities Calgary and the Edmonton Social Planning Council, a person working 35 hours a week for 52 weeks per year would need to earn $18.15/hour in Calgary and $17.36/hour in Edmonton in order to avoid poverty. For a person working 40 hours a week for 52 weeks per year, that figure would be closer to $15/hour.
Based on these calculations, it’s clear that the current minimum wage of $11.20 is not even close to being a living wage. The results of this gap between the current minimum wage and a real living wage can be seen in the growing number of people who have been forced to use food banks over the past decade.
In Alberta, reliance on food banks increased 23.4% from 2014 to 2015 and 82.8% since 2008. Just over 41 per cent of all food bank users are children and one third of households using food banks were led by people with jobs – the highest rate of “working poverty” in the country. Too many parents are making poverty level wages, even though they are working hard to provide for their families.
Aren’t low-wage employers just trying to keep their doors open and create opportunities for workers?
That’s what they want people to believe.
But the track record of some of these employers and lobbyists suggests they’re much more interested in keeping wages low than in creating or maintaining jobs.
These are the same guys who always say the sky is falling whenever any provincial government even whispers about increasing the minimum wage. And, in many cases, they’re the same people who made extensive use of the Temporary Foreign Worker Program (TFWP) to displace Canadians and keep wages artificially low.
After years of focusing on self interest, why should we believe they’re suddenly concerned about the public interest?
What about all the training opportunities for young people that employers say will be lost if the minimum wage is increased to $15.
This is a laughable argument. The vast majority of Albertans working for less than $15 an hour work in the hospitality and retail sectors. These sectors are notorious for offering very limited training opportunities, along with low wages. As a result, there’s not a whole lot to lose.
Higher minimum wages would obviously be good for individual low-wage workers, but what about the broader economy?
A higher minimum wage can actually be good for individual businesses and the broader economy. Higher wages reduce turnover which increases productivity – both of which can reduce costs and increase profits for businesses. At the same time, higher wages help boost the purchasing power of low-wage workers, who are much more likely to spend all of their money locally than wealthy people. This is why many economists and groups like the International Monetary Fund (IMF) have concluded that increased minimum wages are actually more likely to boost economic growth than reduce it.
How helpful are statistics about current minimum wage workers when it comes to the discussion about the provincial governments plan to move the minimum to $15?
Critics of the current government’s plan to increase the minimum wage in stages to $15 by 2018 often argue that increases aren’t really needed because so few Albertans actually earn the minimum wage. While it’s true that only 3 percent of Alberta workers are paid the current minimum of $11.20, these arguments completely miss the point.
If our goal is to ensure that minimum-wage workers are not consigned to lives of poverty, then we should be looking at ALL of the workers who earn less than a living wage, not just those who are making the bare minimum of $11.20.
That means that we should be looking at statistics related to all Albertans who currently earn low-wages (between $11.20 and $15 per hour), not just those who earn the lowest possible wage. This is the group that is struggling to make ends meet; it’s the group that will be directly affected by the move to a $15 minimum; and it’s a MUCH larger group than the group of Albertans earning the exact minimum wage.
There are currently 334,400 Albertans who work for $15 per hour or less. That translates to about 18 per cent of Alberta’s workforce. To put it another way, nearly one in five Albertans work for sub-poverty wages.
As it stands today, 209,000 of the 334,400 Albertans who work for $15 per hour or less are women. That translates to 63 per cent. Overall, one in four women active in the Alberta labour force are paid $15 per hour or less. In contrast, only 13 per cent of men active in the Alberta labour force are paid $15 per hour or less.
Critics of the government’s minimum wage plan often argue that most low-wage workers are kids with no responsibilities. The implicit message is that it’s okay to under-pay and exploit workers if they happen to be young.
This argument would be an offensive enough if it was true – but it’s not. The truth is that 56 per cent (187,000) of Albertans earning less than $15 per hour are over the age of 25. So much for the argument that they’re all a bunch of teenagers!
The same critics who argue that low-wage workers are kids also argue that they’re mostly students. Again, this is an offensive argument. Don’t these guys know how much it costs to get a post-secondary education these days?! And, again, they’ve got their numbers wrong. The truth is that only 78,500 of Alberta’s 334,400 low-wage workers are students. That means that 77 per cent (255,900) of low-wage workers are NOT students. For this group, work is their life, not a side-line pursuit.
What proportion of students and young people active in the Alberta work force earn $15/hour or less?
While the majority of low-wage workers in Alberta are NOT young and NOT students, if you happen to be a young worker or a student who is also holding down a job, you are MUCH more likely to be paid low wages than other Albertans. Thirty-seven per cent of Alberta workers between the ages of 15 and24 earn $15 per hour or less and a whopping 56 per cent of students with jobs fall into the same category.
Of the 334,400 Albertans earning less than $15 per hour, 60,000 (or 18 per cent) have at least one child under the age of 18. For many of these people, low wages are not just a “poverty sentence” for themselves – they’re a sentence for their children and families, as well.
Isn’t it true that the majority of Alberta’s low-wage workers are teenagers or young people with few financial responsibilities?
No. More than 60 per cent of Albertans earning less than $15 an hour are the over the age of 25 and are the heads of households or their spouses. The majority of these workers are women and 33,000 of them are single parents. Even if the low-wage workers in question are young, so what? Just because they’re young doesn’t mean that employers should be allowed to exploit them. And being young doesn’t automatically mean that they don’t have financial responsibilities.
This is an old chestnut trotted out by low-wage employers around the world every time a government contemplates minimum wage increases. It has an air of what late-night TV personality Stephen Colbert calls “truthiness”: it sounds like it could be true, but isn’t. The truth is that there is absolutely no evidence linking minimum wage increases to job losses, even in the sectors most likely to be impacted by the increases.
Here in Alberta, three industries are particularly notable in terms of their over-reliance on low-wage employment: the accommodation and food services sector; the retail trade sector and the agricultural sector. More than two-thirds (67 per cent) of the people working in Alberta’s accommodation and food services sector are paid $15 per hour or less. In the retail trade sector the corresponding figure is 51 per cent; and in the agricultural sector, the figure is 38 per cent. No other sectors in the Alberta economy come close to these sectors when it comes to the low-wages they pay. This helps explain why it is employers from these sectors who have been most vocal in their opposition to a $15 minimum wage. They’ve built their business models on a foundation of poverty wages – and they don’t want anything to change.