Economic boom times have not led to rising standards of living for most Albertans, says report

EDMONTON - What do ordinary Albertans have to show for a decade of unprecedented growth and prosperity in their province? As it turns out, very little.

In a new research report released today - entitled Running to Stand Still - the Alberta Federation of Labour shows that Albertans have not seen their standard of living increase as a result of the so-called "Alberta Advantage."

"Our economy has been growing faster than any other province, our unemployment rates are low and we have the highest levels of productivity in the country," says AFL research officer Tom Fuller.

"But this has not translated into improved wages for working Albertans. In fact, once you adjust for inflation, wages in the province have remained stagnant. All the other economic indicators point up - but the one that matters most to people has remained stuck in the mud."

According to standard economic theory, real wages and the overall standard of living should increase as growth and productivity rise. That hasn't happened in Alberta over the past decade, and in his report, Fuller lays the blame squarely at the feet of the current Conservative government.

In particular, the report argues that government policies such as Alberta's low minimum wage, low welfare rates and cuts to seniors programs have acted as a significant drag on wages. Fuller also points out that Alberta's restrictive labour laws have acted to reduce wages by making it harder for workers to join unions.

"Union contracts are the tractor that pulls wages up, both in the unionized sector and the non-unionized sector," says Fuller. "By restricting the rights of people to join unions, the government is basically guaranteeing that wages will be lower for most people."

The problem of stagnant wages is compounded, the AFL report says, by other government policies that have dramatically driven up the costs of utilities, auto insurance and college and university tuition.

Taken together, the report concludes that the Alberta government's approach to things like welfare, deregulation and labour standards add up to a conscious and deliberately implemented low wage policy.

"The government doesn't use the phrase, and they certainly wouldn't brag about it during an election campaign, but what we're really talking about here is a low wage strategy. That's the reality of the Alberta Advantage," says Fuller. "And in a province as wealthy as our, that's simply not justifiable."

For more information contact:

Tom Fuller, AFL Research  @ 780-483-3021

Les Steel, AFL President   @ 780-483-3021 or 780-499-4135

Gil McGowan, AFL Communications @ 780-483-3021 or 780-910-1173


Alberta's Booming Economy

  • Among Canada's ten provinces, Alberta has enjoyed the highest rates of growth in provincial GDP for nine of the past ten years.
  • Natural gas prices have jumped from an average of $1.66 per 1000 cubic feet in 1993 to more than $6 in 2003. This has fueled growth in both the provincial economy and revenues for the provincial government.
  • Alberta's labour productivity is the highest in the country. Total value added per worker hour was 109 % of the national average in 2001.

The Truth About Wages

  • Most economic indicators have been pointing up, with one notable exception: wages. After adjusting for inflation, average wages in Alberta have stagnated over the past decade. Measured in 2001 constant dollars, the average weekly wage in Alberta in 1993 was $676.79. In 2003, it was $676.14.
  • Standard economic theory suggests that wages should go up as labour productivity increases. Alberta has led the country in productivity gains for more than a decade. But this has not translated into a higher standard of living.

Added Burdens for Working Families

  • As if stagnant wages weren't enough to worry about, working Albertans have also been hit hard by the government policies in areas like utility deregulation, auto insurance and college and university tuition.
  • Before deregulation, Albertans paid among the lowest utilities rates in the country. Now they pay the highest. Albertans are also paying substantially more for auto insurance than provinces with public systems.
  • Between 1992-2002, Alberta had the highest increase in university tuition fees (161%) among all provinces, and the second highest increase in college tuition fees (293%).
  • As a result of these increases, the number of young Albertans getting an advanced education is dropping. Alberta has slipped to seventh among all provinces when it comes to the percentage of our young people attending post-secondary institutions.

Elements of Alberta's Low-wage Strategy

  • At $5.90 per hour, Alberta has the lowest minimum wage in the country. It is about 90 cents an hour below the national average.
  • Alberta treats its citizens on welfare more harshly than do other provinces. We rank last when it comes to the annual welfare benefits paid to single parents with one child ($11,634).
  • Seniors benefits worth about $563 million a year in 2002 dollars have been cut by the Klein government since 1992. This has forced many seniors back into the workforce - often the low-wage workforce.
  • Alberta has the lowest rate of unionization in the country (about 25 percent versus a national average of about 33 percent). But surveys show Albertans are no less willing to join unions that workers in other provinces. The difference? Alberta's restrictive labour laws.
  • Alberta labour laws are carefully drafted to hamstring unions and limit their ability to organize and effectively represent workers. For example, unlike other provinces, the Alberta Labour Relations Code, does not provide serious penalties for employers who refuse to bargain with duly elected union locals. It also gives Alberta employers much more latitude to pressure and intimidate employees during union membership drives.

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