“Small price to pay for big benefits,” concludes AFL study
Edmonton - A new study based on Statistics’ Canada Labour Force Survey provides fresh evidence that Alberta’s move to a $15 minimum wage is both good for working Albertans and good for the economy.
“The minimum wage debate has been dominated by groups parroting the same old tired arguments about catastrophic job losses and economic collapse,” said Gil McGowan, President of the Alberta Federation of Labour, “but those arguments simply lack evidence.”
The report finds that Alberta had 323,000 workers earning $15 per hour and below before the minimum wage increase, accounting for 17% of those classified as employees. Nearly two thirds of these workers were women, and 78% were over 20 years old.
The paper also shows that to increase the minimum wage to $15 per hour will mean only 0.6% in additional direct wage costs to employers. The study also found little evidence of significant wage bumping, meaning that wage increases will be concentrated solely for the lowest wage earners who need a boost. The study shows these costs will be low for businesses, but will make a large impact on the lives of low-wage earners.
The report concludes that given the estimated small 0.6% added direct wage costs and limited wage bumping, raising the minimum wage to $15 per hour will not create the pandemonium of massive job losses, rampant inflationary pressures, or other upheavals in the economy that right-wing reactionaries have claimed. The new minimum wage will move Alberta’s minimum wage workers closer towards Alberta’s average and median wages, catching up to international standards.
“Increasing the minimum wage to a point where people working full-time hours can afford to live above the poverty line will be a boost for Alberta’s economy. Because low-income workers are the likeliest to need the money, they are the likeliest to spend it,” said McGowan. “When you look at studies on the effect of minimum wage increases on employment, time and time again, you see that none of the catastrophic employment impacts predicted have come to pass.”
Raising minimum wages are associated with a number of positive impacts, both for workers and the economy. Workers at the lowest end of the wage scale will see their wages rise by 10.3% or $1.40 per hour above the current minimum wage.
“For 30 years the minimum wage has barely kept pace with inflation, meaning that many low wage workers have witnessed a stagnant or declining wage – this despite Alberta experiencing the highest wages in Canada, in some of the highest cost of living areas,” said McGowan. “For the over 300,000 Albertans getting a raise, this represents a real improvement in their lives.”
This report can be found online using this link Establishing the Facts on Alberta’s New Minimum Wage.
Director of Communications
Alberta Federation of Labour