Province’s minimum wage again the lowest in Canada
Edmonton - Alberta has reclaimed the dubious distinction of having the worst minimum wage in the country.
On Saturday, Dec. 1, the minimum wage in Saskatchewan was increased from $9.50 to $10. This leaves Alberta as the province with the lowest-paid workers in the country. It was a title the province had relinquished for only three short months after Alberta increased its minimum wage in September from $9.40 to $9.75.
“It shows how out-of-line this province is with the rest of the country,” Alberta Federation of Labour president Gil McGowan said. “During the three months that Alberta didn’t have the lowest, we had the second-lowest minimum wage.”
Workers in British Columbia, Manitoba and Ontario can all expect a minimum of $10.25 per hour. Throughout the Maritime Provinces, workers will see $10.00 per hour on their paycheques. In Nunavut, the minimum wage is $11.00. About 26,000 Alberta workers earn the minimum wage of $9.75.
“We have the strongest economy, and the greatest demand for workers in Canada. As a province we can afford to pay workers fairly, but we aren’t.” McGowan said. “Why is it that the province that has the greatest wealth is the stingiest with some of its most disadvantaged citizens?”
Since 2011, Alberta’s minimum wage has tied to an average of changes to Alberta’s annual average weekly earnings and changes to the Consumer Price Index in Alberta. Changes to minimum wage occur September 1 of each year and are announced with three months’ notice.
“Indexing the minimum wage to inflation makes sense,” McGowan said. “But it does no good to make cost-of-living adjustments if you’re starting from a wage that is simply too low. A terrible wage that keeps up with inflation will remain a terrible wage.”
Some workers in Alberta – those who serve alcohol and may have their income supplemented by tips – are subject to an even lower minimum wage of $9.05 an hour. Some restaurants have taken advantage of this system to pay their serving staff the reduced rate even if they almost never serve alcohol, and absolutely never get tips.
“This separate minimum wage, which was introduced last year, is a loophole that some employers are exploiting,” McGowan said. “There are workers in Alberta paid almost a full dollar less per hour than any other workers in Canada. The Premier needs to address this problem.”
Gil McGowan, President, Alberta Federation of Labour at 780-218-9888 (cell)
Olav Rokne, AFL Communications Director at 780-289-6528 (cell) or via email [email protected].
Swiss Chalet case shows how employers can use weak laws to rip-off workers
EDMONTON – Alberta's poorly written minimum wage laws are subject to abuse, says Nancy Furlong, Secretary Treasurer of the Alberta Federation of Labour, and Doug O'Halloran, President of the United Food and Commercial Workers, Local 401 (UFCW 401).
"Employers are taking advantage of weak two-tiered minimum wage laws to rip off the lowest-paid workers in Alberta," says Furlong. "A case before the Alberta Labour Relations Board (ALRB) shows how unscrupulous employers can classify minimum-wage earners as 'liquor servers,' even though they rarely if ever serve booze, in order to pay them the lower of the two minimum wages."
The case, brought to the ALRB by UFCW 401 on behalf of workers at the West End Swiss Chalet in Edmonton, centres around the employer's attempt to pay workers the liquor servers' minimum wage of $9.05 an hour, rather than the general minimum wage of $9.40 an hour (will increase to $9.75 on September 1), though they rarely, if ever, serve alcohol. The $9.75 minimum wage allows for the 'occasional' service of liquor, which is precisely the situation of the workers at Swiss Chalet.
"Servers at Swiss Chalet serve chicken and ribs, not martinis and scotch," says Doug O'Halloran, President of UFCW 401. "But the employer is demanding that they accept the lower wage, the one for workers who frequently serve booze. The employer is prepared to lockout these workers in order to get his way and pay them a lower minimum wage than they're entitled."
"There are nearly 26,000 Alberta workers earning minimum wage and only a small minority – like the workers at this Swiss Chalet - have the protection of a union," says O'Halloran. "If one dodgy employer has figured out a way to screw these workers out of $0.35 an hour, you can bet that there are dozens, maybe even hundreds, of other employers doing the same thing."
"There should be one wage for all minimum wage earners in Alberta, one that allows them to earn enough to stay out of poverty," says Furlong. "An all-party committee of the Legislature in 2010 also recommended that there be one wage for all minimum-wage earners, but the government caved to the restaurant lobby and ignored that advice."
"Now the chickens have come home to roost. Employers in the restaurant industry are using the government's shoddy laws and lax enforcement to swindle the lowest-paid workers in the province."
Douglas O'Halloran, President, UFCW 401, 403-861-2000
Nancy Furlong, AFL Secretary Treasurer, 780-720-8945
Advocates of a living wage hit downtown streets Tuesday to hand out $9.40 bills to raise awareness that Alberta's minimum wage, now the lowest in the country, is not enough.
"We're just trying to raise awareness on the fact that the new minimum wage is not a living wage, it's not enough for people to get by on," said Lorinda Peel, Lethbridge community mobilizer for Public Interest Alberta.
"The bills are basically just to get the word out. What we want people to do is hand them out as tips to servers or people in the serving industry that are making minimum wage, people who hopefully would speak up and speak out against it."
She said the idea is to circulate the bills around the city so more people are aware of who the minimum wage affects.
"It's not just teenagers, there's a lot of people - 17.8 per cent of people in Lethbridge are working for less than $12 an hour, and it's a huge range of people that fit into that category. You've got single mothers, people in their 40s, 50s, teenagers, students going to university and college, it affects a lot of people," Peel said, adding the ultimate goal is to get the minimum wage increased to a more livable wage of $12 an hour.
"Right now Alberta has the lowest minimum wage across Canada, so we'd like to see a review of that. Working for less than $12 an hour with the cost of living these days is just not feasible."
Shannon Phillips, policy analyst for the Alberta Federation of Labour and chair of the Womanspace Resource Centre, said having the lowest minimum wage in Canada reinforces the "growing gap between rich and poor."
"In Alberta, we are a very wealthy place, but we are not doing well in terms of the growing in equality and the growing gap between rich and poor. We've seen this play out on an international stage, we're seeing it also playing out right here at home," she said. "The fact is that we can do better here in Alberta."
She noted those working in restaurants and bars making a minimum $9.05 an hour, and expected to cover the difference with tips, are especially hit hard.
"This differential wage assumes that everyone who is working in the service industry is making some kind of wild amount of tips, which we know from the research it's not true . . . and those kinds of jobs do not come with benefits, they don't come with even EI because EI is based on your minimum wage, it's not based on tips, they don't come with any other of the job protection that higher wage earners get."
Phillips added Alberta does not have any laws regarding tips and gratuities.
"Here we have a minimum wage that is dependent on the existence of tips, but not one law around how employers deal with tips," she pointed out. "So we know from experience, and it's perfectly legal, for employers to take tips, to take tips for a tip out to other staff, or just to take them outright, and so if you have that situation then this law is just ripe for abuse."
More information on the $9.40 bills and living wage can be found at www.facebook.com/NotaLivingWage or www.pialberta.org
Lethbridge Herald, Wed Nov 2 2011
Byline: Jamie Woodford
In one fell swoop, the Alberta government has managed to ensure the perpetuity of both future minimum wage increases and the controversy over the minimum wage itself.
After freezing the wage last year, Employment Minister Thomas Lukaszuk was under mounting pressure to increase it this year.
Last year, the government argued that given the impact of the recession, an increase in the minimum wage would threaten jobs and the viability of small businesses. However, the minister suggested he'd consider an increase once the economy had recovered.
Well, advocates of a wage increase got their wish, but they are not exactly celebrating. The minimum wage is indeed going up, but in the process, two tiers of minimum wage are being created.
Alberta's minimum wage will go from $8.80 an hour to $9.40, effective Sept. 1. However, it will rise to just $9.05 for those who work as servers in licensed establishments. Eventually, there will be a permanent one-dollar discrepancy between the two tiers.
It makes the landscape more muddled, but also helps to reveal some plain truths about the minimum wage.
The province quite rightly points out that servers, for whom a large portion of their income is derived from tips, are not exactly minimum wage earners. Such workers represent a significant proportion of those earning minimum wage in Alberta. How exactly does raising their wage in any way address poverty?
Employers who do pay minimum wage might have some tough decisions to make. If they intend to absorb the cost, that could mean fewer positions, fewer hours of work and scaled-back benefits or training. Higher prices would be the other choice — bad news for low-income earners.
Here in Alberta, however, most low-skill jobs already pay above the minimum. That's what really matters — not what the minimum wage is, but how relevant it is.
It's true, for example, that Alberta will soon have Canada's lowest minimum wage. What's far more telling, though, is that only 1.4 per cent of workers in Alberta actually earn minimum wage.
When you factor in those earning tips, as well as students living at home, workers who take a second job for extra income, and those for whom their spouses are the primary household income earners, there are not many people left who represent the sort of minimum wage earner portrayed by labour groups.
A 2009 paper in the journal Canadian Public Policy pointed out that more than 80 per cent of low-wage earners are not members of poor households and that more than 75 per cent of poor households do not have a member who is a low-wage earner. The paper concluded, then, that planned increases in Ontario's minimum wage would "lead to virtually no reduction in . . . poverty."
However, groups such as the Alberta Federation of Labour want the government to go much further. The group is pushing for a so-called living wage of $12.20 per hour.
While such an hourly wage might look more attractive when viewed in isolation, the effects of such a policy would far outweigh any benefit.
In 2002, the Quebec government conducted an extensive review of the minimum wage. The report drew heavily on the work of economist Pierre Fortin, who concludes that a minimum wage falling between 45 and 50 per cent of the average income represents an increasing danger to employment.
Alberta's average hourly wage is $25.02, so the living wage puts us right in the danger category. In other words, the sort of policy that harms those it is intended to help.
For those who believe government's role is to directly assist those in poverty, there are a plethora of other ways by which to assist such individuals.
For others — a 17-year-old living at home, for example — there is great benefit in simply having a job. Not just in terms of having an income, but in the valuable work experience earned. Higher minimum wages mean fewer such jobs, and therefore, fewer such opportunities.
Given the far worse options being proposed by others, the Alberta government's muddled approach may be the least detrimental.
The Rob Breakenridge Show airs weeknights from 9-11 p.m. on AM770 CHQR. [email protected]
Calgary Herald, Mon Jun 6 2011
Byline: Rob Breakenridge
EDMONTON - Alberta is raising its minimum wage, but too late for students working summer jobs who will be returning to school this fall.
The general minimum wage will rise 60 cents to $9.40 per hour on Sept. 1. But workers who serve alcohol will only get a 25 cent per hour raise.
Employment Minister Thomas Lukaszuk said the government wanted to ensure the raises are reasonable to employers and employees.
"We want to maintain the important balance between attracting people into entry-level positions and helping their employers remain competitive," he said Wednesday.
"Having a different minimum wage for liquor servers recognizes that these individuals earn a significant part of their incomes from tips."
The changes are expected to affect about 20,000 workers in Alberta.
The Alberta Federation of Labour has been calling on the government to raise the minimum to $12.20 to ensure people are earning a living wage.
"We believe that anyone who works full time, full year in our province should earn a wage that allows them to stay out of poverty," said Gil McGowan, president of the federation.
Alberta's new minimum wage rate is in the middle of the pack compared with other provinces and territories. Right now Alberta has the second lowest rate after British Columbia.
Global Regina, Thurs Jun 2 2011
Minimum-wage raise welcomed, but program seriously flawed, says AFL: Further delay in implementing raises is ‘mean spirited,’ says Gil McGowan
Today's announcement that minimum-wage levels in the province are going up has been welcomed by the Alberta Federation of Labour (AFL), but the labour organization has serious concerns over details of the new policy.
"This raise has to be seen in context," says McGowan, president of the AFL, which represents 145,000 workers. "This is not a great leap forward. If the government had stuck with its old policy of annual raises, workers would already be getting more than the $9.40 per hour it is setting as the new general rate. Those getting the new second-tier of $9.05 per hour are falling further behind."
He described the introduction of a two-tier system, with liquor servers earning less than other workers, as "unfair and almost impossible to administer."
"The minister says liquor servers get tips, so don't deserve the same wage as other workers," says McGowan. "But what about workers who serve liquor but don't get tips? What about workers who get tips but don't serve liquor, like servers in unlicensed restaurants, or estheticians?"
McGowan also criticized the decision to delay applying the new rates until September 1st, meaning students working summer jobs won't benefit. "We have waited more than two years for a raise. Imposing another three-month delay is simply mean-spirited."
The AFL welcomed the plan to have a system for annual increases to minimum-wage levels, but is worried that the decision to implement these annual raises will be left to the cabinet instead of being applied automatically.
"How can we trust that raises will be implemented fairly when this minister froze the minimum wage for two years in defiance of the government's stated policy?"
The AFL has called for the minimum wage to be given a one-time boost to $12.20 and then increased annually. "We believe that anyone who works full time, full year in our province should earn a wage that allows them to stay out of poverty. Neither of the two new rates is enough to do that," says McGowan. "This higher rate moves Alberta from the second lowest minimum wage in Canada to sixth place – hardly enough to warrant celebration. The lower rate is even closer to the bottom."
McGowan dismissed fears that a larger increase in minimum wage levels would lead to lost jobs. "A five-year analysis by the AFL last year showed that raises in the minimum wage led to more jobs being created in service industries, not less," says McGowan.
Contact: Gil McGowan, president, Alberta Federation of Labour @ 780-218-9888 (cell)
The Alberta Federation of Labour thinks the province's minimum wage is too low, and it wants Alberta Employment and Immigration Minister Thomas Lukaszuk to do something about that before he steps down to seek the Conservative party leadership.
"Lukaszuk's first act when he became minister a year and a half ago was to freeze Alberta's minimum wage," AFL president Gil McGowan said in a news release last week. "At the time, he said he would review the practice of automatically indexing the minimum wage and only consider an increase when the provincial economy returned to health. Well, the review is done and the recession is over. It's time for the minister to live up to the promise he made to Alberta's poorest workers."
Alberta's minimum wage sits at $8.80 per hour, lower than all other Canadian provinces and territories with the exception of British Columbia's $8.75. But with B.C. planning to increase its rate to $9.50 in November, then to $10.25 per hour in May 2012, that will leave Alberta trailing the field unless the minimum wage is raised in this province.
In other provinces, the minimum wage ranges from $9 in Prince Edward Island and the Yukon to $11 in Nunavut and $10.25 in Ontario. Elsewhere on the Prairies, the minimum wage is $9.25 in Saskatchewan and $9.50 in Manitoba.
At $8.80 per hour, full-time hourly minimum-wage workers in Alberta earn $352 a week and approximately $18,304 per year, based on eight-hour days and a 260-day work year, according to the Canadian Minimum Wage website. That would put a single person earning minimum wage in Lethbridge barely above the "low-income cut-off" line of $18,147 per year, as calculated by the Canadian Council on Social Development (2006 figures).
McGowan says with an improved economy and with thousands of high school students set to join the job market for the summer, now is a good time to bump up Alberta's minimum wage.
But there are two sides to that coin. Critics of a higher minimum wage say it leads to job losses. When B.C. announced its plans to hike its minimum wage, a report from the Fraser Institute predicted the increase will result in between 9,000 and 52,000 job cuts.
A report released this year by the Canadian Federation of Independent Business titled "Minimum Wage: Reframing the Debate" noted, "Although governments have implemented minimum wage policies in hopes of reducing poverty and improving the well-being of low-income workers, the overall effectiveness of these policies is debatable."
The report went on to estimate that a 10 per cent increase in the minimum wage across all provinces "costs between 92,300 and 321,300 jobs."
That means while an increase in the minimum wage means more money in the pockets of those at the low end of the wage scale, it also means a number of workers wind up with their income reduced to zero.
Clearly, the issue creates a dilemma. On the surface, it seems a no-brainer that workers deserve a better minimum wage. But it's also true that many small businesses aren't in a position to boost their payroll budget. If payroll goes up, so do other associated costs such as payroll taxes including Canada Pension Plan, Employment Insurance and Workers' Compensation contributions, the CFIB notes in its report.
Consequently, if the minimum wage goes up, something has to give - and that often means people losing their jobs.
So the question boils down to: Is it worth it to raise the minimum wage and improve the lot of some workers while making things worse for others?
There's no easy answer.
Lethbridge Herald Opinion, Thurs May 26 2011
Minmum wage should be raised now, before thousands of high school students get summer jobs, says McGowan
EDMONTON – Before he steps down to pursue the leadership of the PC Party, Employment and Immigration Minister Lukaszuk should make good on the promise he made to raise the minimum wage, says the Alberta Federation of Labour.
“Lukaszuk’s first act when he became minister a year and a half ago was to freeze Alberta’s minimum wage,” say AFL president Gil McGowan. “At the time, he said he would review the practice of automatically indexing the minimum wage and only consider an increase when the provincial economy returned to health. Well, the review is done and the recession is over. It’s time for the Minister to live up to the promise he made to Alberta’s poorest workers.”
At $8.80 per hour Alberta, Canada’s wealthiest province, has the second lowest minimum wage in the country – after B.C. But B.C. premier Christy Clark recently announced that the minimum wage in B.C. will be increased to $10.25 per hour in May 2012.
McGowan says the time is right for Lukaszuk to increase Alberta’s minimum wage because the K-12 school year is almost over.
“Thousands of high school students will soon be applying for jobs and many of those jobs will pay minimum wage or close to it. Before Lukaszuk himself considers applying for a new job, that of premier, he should raise the minimum wage and help out those students,” says McGowan.
McGowan says both of Lukaszuk’s conditions for increasing the minimum wage have been met.
First, the Alberta economy has clearly returned to good health. Investment is up and unemployment is down. Retail sales are up nearly 6 per cent from last year. And the province’s average weekly earnings rose by nearly 7 per cent and are the highest in the country.
“Clearly, we can afford to give Albertans earning minimum wage a raise,” says McGowan.
Lukaszuk’s second condition was that a review be conducted of Alberta’s system for indexing and increasing the minimum wage. This was done last summer and fall by a special all-party committee of the Legislature. In December, the committee recommended that the minimum wage immediately be increased to $9.05 and that a system for regular cost-of-living increases be implemented.
“Despite the committee’s recommendations, the silence from the Minister on this issue has been deafening,” says McGowan.
Other jobs that will be left undone if Lukaszuk resigns include: making change to improve workplace health and safety; extending basic rights to agricultural workers; and fixing the Temporary Foreign Worker program (which Lukaszuk has admitted himself is dysfunctional).
“If Lukaszuk wants to be taken seriously as a leadership candidate, you’d think he’d want to finish at least some of this work before giving up the reins at the Employment and Immigration department,” says McGowan. “Increasing the minimum wage would be a good place to start and an important legacy to leave.”
The AFL is Alberta’s largest labour organization, representing 145,000 unionized Alberta workers.
Media Contact: Gil McGowan, president, Alberta Federation of Labour @ 780-218-9888
You know you're getting older when you can recall the minimum wage for Ontario in 1976 was $2.15. But the cost of living back when Disco was the music of choice at a bar on a Saturday night was considerably lower than what Albertans are paid today.
And to think this province's workers continue to endure unnecessary hardship and poverty thanks to a two-year delay in increasing the minimum wage by the Alberta government.
Alberta Federation of Labour president Gil McGowan notes this province's minimum wage has been stuck at $8.80 per hour since April 2009. Meanwhile, your grocery costs and the cost to fill a gas tank have gone up considerly more than wages.
What's unacceptable, says McGowan, is the government more than a year ago needlessly cancelling a scheduled increase to the minimum-wage level.
Last fall, the Alberta legislature standing committee on the economy recommended an immediate increase to $9.05 per hour. The Minister of Employment and Immigration has ignored that recommendation.
"This is inexcusable," says McGowan.
Yes it is, but will the province adopt the $9.05 minimum-wage level and restore annual increases to the minimum wage, based on the average weekly earnings index?
McGowan would like to see the government make a one-time bump to the minimum wage to $12.20 as the province's economy stabilizes, so low-income earners can make a living wage. Makes sense to have full-time workers in this province being able to earn a wage that allows them to stay out of poverty. The current minimum wage does not do that.
There must also be a system in place that guarantees regular increases to prevent the minimum level from being eroded by inflation. The current minimum wage leaves a full-time worker at an income of $4,000 per year below the low-income cutoff, otherwise known as the poverty line.
Alberta can afford to do better when you compare the minimum wages from the rest of Canada, with BC the lowest at $8 — in Australia it's $20 — Newfoundland $10, Nunavut $11, Quebec $9.50, Ontario $10.25, Saskatchewan $9.25 or Nova Scotia $9.65.
Hanna Herald, Mar 25 2011