Low-income workers take a hit for business

EDMONTON - When Fazal Hussein found out that Alberta's minimum wage was frozen Friday, he thought: "Great. Food stamps, here I come."

The 19-year-old clothing retailer wants to get his own place and go back to school, and the government's announcement put those dreams even further out of reach.

"Usually when minimum wage goes up, I'd get a raise," he said. "You can't be independent without a dependable wage."

Employment minister Thomas Lukaszuk said the province froze the minimum wage at $8.80 in an effort to keep people employed and small businesses competitive, but critics say the government is picking the pockets of Alberta's most vulnerable workers.

Lukaszuk said the move is necessary to help address Alberta's unemployment rate, which stands at 6.6 per cent.

"When the economy is so fragile -- especially for those entry-level workers -- the last thing I want to do is create a situation where more of them would be laid off because of an increase to the minimum wage."

He also announced plans to ask an all-party committee to review the whole concept of minimum wage.

"If there are innovative ways that will work better for low-income Albertans, then that is something I would like to adopt," he said. Possibilities include variable minimum wages based on industry, he said. The committee will begin work in the coming weeks.

Richard Truscott, Alberta director of the Canadian Federation of Independent Business, applauded the move, saying the current policy clearly needs to be changed.

"We were very concerned last year when they increased the minimum wage right smack in the middle of a serious recession -- the timing couldn't have been worse for small businesses," he said.

Since 2007, the minimum wage in Alberta has been tied to the province's average weekly earnings index, and has risen steadily from $8.00 in September 2007 to $8.80 in April 2009.

Edmonton Social Planning Council research director John Kolkman said the move is a "real step backward" for the province.

"Three years ago the provincial government made a good decision -- to take the politics out of the minimum wage by tying it to changes in the average monthly earnings of Albertans. That was a fair way to do it."

He said the announcement is particularly troubling, since his calculations suggest the existing policy would have put the latest increase at 1.4 per cent, boosting the hourly wage just 12 cents, to $8.92.

Alberta Federation of Labour president Gil McGowan said unhitching minimum wage from an index means the wage will erode under the pressure of inflation, moving from a subsistence wage to a poverty wage like it did in the 1980s and 1990s.

"They're essentially picking the pockets of our most vulnerable workers, making it much more difficult for people who are already struggling to make ends meet," he said. "It's heartless, plain and simple, and if the minister thinks this freeze will create any jobs, he's dreaming in technicolour."

Alberta's minimum wage ranks sixth in Canada behind Ontario, Newfoundland, Saskatchewan, Quebec and Manitoba, all of which have hourly minimum wages over $9.00.

Half of all minimum wage earners work in the food services, accommodation and retail industries, and two in three are women. Natalie Zychniewicz embodies the statistics. The 21-year-old also works selling clothes at the mall and said she would need to make at least two or three dollars more an hour to make it on her own.

"If I wasn't living with my folks I definitely couldn't be working for minimum wage," she said. "I would definitely like to have a little bit more money to spend."

Vancouver Sun, Sun Feb 6 2010
Byline: Karen Kleiss

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