A higher minimum wage could boost the provincial economy according to a study from the 15 is Fair campaign.
Edmonton — A higher minimum wage could boost the provincial economy according to a study from the 15 is Fair campaign.
The new research shows that increased spending in Alberta from a minimum wage increase would amount to a $900 million increase to the provincial economy over three years.
“This is not a radical notion. It’s an argument that many mainstream economists have been making for years,” Alberta Federation of Labour president Gil McGowan said. “Higher minimum wages help the economy grow by putting more money in the pockets of low-wage workers who, in turn, spend that money in the local economy.”
The research paper used analysis methods from the Federal Reserve Bank of Chicago applied to data from Statistics Canada’s Labour Force survey for Alberta. Breaking down the number of workers in Alberta by hourly wages, the report examines how much extra money each group would earn in a given week, and how much extra they would be able to spend.
“When we take into consideration CPP, EI, and federal income taxes, we find that a $1 per hour increase in the minimum wage results in an average increase of about $1,200 per year for more than 158,000 workers in Alberta. Together, this means an increase in household spending of $201 million in the first year [of the government’s plan to increase the minimum wage],” the report notes.
Extending this analysis to further increases to the minimum wage, the report finds that raising the minimum wage over time to $15 by 2018 would continue to stimulate the provincial economy, adding almost a billion dollars of growth to the provincial economy over three years.
The report notes additional benefits of the minimum wage increase could include lower employee turnover, and higher productivity. “We often talk about how to increase the number of ‘good jobs’ in our economy. Good jobs are ones where workers feel respected, where the job is stable, and where employers invest in workers. Too often minimum wage jobs are not good jobs. But Canadian research shows that increasing the minimum wage reduces turnover, creating more stable jobs for workers.”
The full report is available at this link:
Olav Rokne, Communications Director, Alberta Federation of Labour at 780.218.4351 (cell) or via e-mail firstname.lastname@example.org.