2010 Jun Speaking Notes - Presentation to Alberta Legislative Assembly Standing Committee on the Economy - Minimum Wage
As most of you know, the AFL is Alberta's largest labour organization, representing 29 unions in the public and private sectors with a collective membership of about 140,000 Albertans.
On behalf of that membership I'd like to thank you for this opportunity to present to this committee on the important question of how to set Alberta's minimum wage.
I've often been described in the media as one of the government's most vocal and persistent critics.
I'm the first to admit there's a lot of truth in that label.
On behalf of my members, I've raised concerns about this government's approach to workplace health and safety; its approach to labour law; its approach to temporary foreign workers; and its approach to development in the oil sands... among many other things.
So you can imagine my surprise when, two years ago, I found myself in agreement with a major decision made by the Premier and his then Minister of Employment, Hector Goudreau.
And I didn't just agree...I actually wanted to shout my enthusiastic support from the roof tops.
The decision I'm referring to, of course, was the decision to increase the minimum wage - and even more importantly - to explicitly tie future increases to changes in the average weekly wage index.
At the time, the premier and the minister basically said that whenever other Albertans got a raise, the lowest paid Albertans should get a raise too.
It was the same logic - and the same mechanism - that the government used to determine pay increases for MLAs.
I had a few quibbles. I thought the starting base wage should be set a little higher. And I thought the Alberta Consumer Price Index might have provided a more appropriate benchmark.
But, on balance, I felt the government had done the right thing for the right reasons. It was a simple system; a transparent system; a predictable system; and a fair system. It was, I would argue, an example of public policy at its thoughtful best.
I'm a strong believer in giving credit where credit is due, so I wasn't shy about praising the government. I did it in writing; I did it press releases and I said it to anyone who would listen.
Whole-heartedly supporting the Alberta government on a major policy issue was uncharted territory for me - but honestly, it felt good.
Unfortunately, today find myself in more familiar territory.
We're here because the new Minister of Employment, Thomas Lukazuk, has called for a review of Alberta's Minimum Wage policy and has suspended the small increase that was supposed to be given to minimum wage workers this spring.
To say that I'm disappointed by this turn of events would be an understatement.
When the Minister made his announcement about the freeze and the review, he said he was doing so because many employers had told him that an increases in the minimum wage, however small, would lead to significant job loss.
That's really why we're here today - because business owners - especially business owner in the service sector - played the jobs card ... and they did it during a recession.
To be fair, anyone sitting in the Employment Minister's chair, has to take concerns about job loss seriously - especially at a time when the number of unemployed is increasing.
But if you're a business or a business lobby group that is asking the government to take money out of the pockets of our poorest citizens, then the onus is on you to back up your arguments with facts, not fear.
Anecdotes aren't evidence and rhetoric is not reality.
But that's what this review is based on: unsubstantiated anecdotes; overheated rhetoric; and thinly disguised self interest.
I say all of this because when it comes to the argument that is at the core of this debate - the argument that even a small increase in the minimum wage would kill jobs - there is no evidence.
In fact, what the evidence shows is exactly the opposite. What the evidence shows is that employment in the low-wage service sector has actually INCREASED in Alberta whenever we've increased the minimum wage.
The Alberta Federation of Labour has conducted an five-year analysis of the occupations most likely to pay minimum or low wages - occupations in retail sales, cashiers and clerks, food and beverage service workers, and those employed in travel and accommodation.
Since 2005, Alberta has made four upward adjustments in the minimum wage...and every time the number of Albertans working in low wage jobs went up.
In 2005, the minimum wage was boosted from $5.90 to $7.00/hour. One year after the increase, there were 26,700 more Albertans working in the food and beverage, service, and travel/accommodation industries.
In September 2007, the Alberta government boosted the minimum wage from $7.00 to $8.00/hour. In April 2008, they increased it again to $8.40/hour. In the 8-month interval between these increases - and just as the global credit crisis was beginning to shake business and consumer confidence - the number of Albertans working in the food and beverage, retail, and travel/accommodation industries grew from a total of 342,800 to 363,300 employees.
Finally, in April 2009, the minimum wage increased again - from $8.40 to $8.80 per hour.
Around this time overall unemployment in Alberta had increased from 6% in April 2009 to 7.4% in May 2010. If increases in the minimum wage really killed jobs, you'd think surely at this time, when other jobs were being shed, this would happen. But it didn't.
- Employment in food and beverage service, retail sales, and travel/accommodations actually grew in the year since the last minimum wage increase.
- Albertans employed in retail sales as clerks and cashiers grew from 129,600 in April 2009 to 142,400 individuals in May 2010
- Albertans working in food and beverage service went from 64,700 in April 2009 to 68,700 in May 2010
- Albertans working in travel and accommodation services grew from 185,800 in April 2009 to 188,400 individuals in May 2010.
So why have all the conservative predictions about job loss related to minimum wage turned out to be empty phantoms. Partly because they we motivated more by the self-interested desire by some employers to keep wages low. But more importantly, those predictions were wrong because they were based on economic models as opposed to empirical evidence.
Models only work if the assumptions that they're based on a true ... that's why they're dangerous tools to rely on for policy making. Empirical evidence, on the other hand, is by definition true ... it's reality. And reality, not ideologically driven conjecture, should be the basis of all public policy - especially those policies that affect our most vulnerable citizens.
What the empirical evidence from right here in Alberta shows is that there is no substance to the argument that modest, predictable increases in the minimum wage kill jobs. It's a myth, plain an simply.
Unfortunately, it's not the only myth that has been clouding the debate on minimum wage.
For example, there's the minimum wage is a living wage. It's not.
An Albertan earning the minimum wage of $8.80/hour, working 40 hours per week and 50 weeks per year earns $17,600 per year before taxes, which is $4,533 below the before-tax Low-Income Cut-Off for an individual living in a city, better known as the poverty line.
If one is the head of a lone-parent family with two children in Edmonton or Calgary, a full-time hourly wage of $10/hour - the wage earned by 6.9% of working Albertans - still sees that family earning $13,133 per year less than the before-tax Low-Income Cut-Off.
Another myth has to do with the number of Albertans who struggle with low wages. Some people in government and business fond of reminding Albertans that very few workers earn minimum wage - as if this is a justification for keeping the minimum wage far below any accepted measure of poverty.
While it is true that only 1.4% of Alberta workers earn the bare minimum, fully 6.9% of the Alberta workforce earns less than $10/hour and 13.7% earned less than $12/hour, a wage that still constitutes a life of poverty.
The minimum wage is a floor. If the floor is too low, all workers at the lower end of the income ladder suffer... they're dragged down. That's why the minimum wage matters, even if only a small number of workers actually earn that wage.
Another myth is that low-wage earners are predominantly high school students living with their parents, who only work to pay for the latest video game or new cell phone.
This stereotype is an insult to the tens of thousands of Albertans - predominantly women - who are working for low wages in order to put food on the table.
59% of low-wage earners (less than $10/hour) are over 20, and 42% are over 25.
In other words, 42% of low-wage earners are likely to have family responsibilities.
The final myth that I want to address is the myth that Alberta is doing enough for its poor, especially its working poor.
In his letter of invitation for groups to present to this review, Minister of Employment and Immigration Thomas Lukaszuk urged the Standing Committee on the Economy to examine practices in other jurisdictions.
Minimum wage standards are part of an overall strategy to combat poverty and ensure economic security for all Albertans.
However, Alberta is in a minority of provinces without some form of anti-poverty strategy. For example:
- New Brunswick, Nova Scotia, Ontario and Manitoba all have comprehensive anti-poverty strategies, and part of the strategy in all of these provinces is ensuring the minimum wage keeps pace with the economy.
- 6 out of 10 provinces have provincial child benefits similar to the federal Child Tax Benefit, which supplement incomes for families headed by low-wage earners. Alberta is in the minority of provinces without a provincial child benefit.
So what conclusions can be drawn from all of this?
The main conclusion, I think, is that Alberta can and should do better. The other main conclusion is that Alberta can and should base its policy on minimum wage on facts and empirical evidence, not hearsay, rhetoric and self-interested fear-mongering.
And what do the facts tell us?
They tell us that too many working Albertans are suffering with low wages.
They tell us that regular, predictable increases to the minimum wage would help those struggling Albertans.
And they tell us that increases in the minimum wage have not in the pass and will not likely in the future result in the loss of jobs.
The bottom line for us is that Alberta can afford to be a leader in fighting poverty - and any serious strategy to fighting poverty has to include a regularly indexed minimum wage that is at least close to being 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. The current minimum wage doesn't do that - and without a system for guaranteeing regular increases, the situation will only get worse as the value of the minimum wage is eroded by inflation.
The Alberta Federation of Labour applauded the government's 2007 decision to tie increases in the minimum wage to the average weekly earnings index.
We recommend that the government return immediately to following its own policy, and boost the minimum wage immediately to $9.05, as it was supposed to happen earlier this year.
In addition, as the economy recovers, the government should consider a one-time boost to the minimum wage in the months ahead.
As we have seen, thousands of Albertans earn less than $10/hour, and many of them are likely to have family responsibilities.
Boosting the minimum wage to $10/hour in the months ahead is unlikely to have any effect on the economy besides giving low-income families a little more breathing room.
Putting more money in the hands of hard-working, low-income people, according to every economic analysis available, actually provides a boost to the economy in times of recession.
As I've said, this is a government that did the right thing for the right reasons on minimum wage. Please do the right thing again. Thank you.
Gil McGowan, President
Alberta Federation of Labour
June 23, 2010
The minister cited the decision as instrumental in insuring the recovery and competitiveness of small businesses as the province bounces back from the recesssion.
"It wasn't a given that minimum wage would increase, it was only in the past two years that the government introduced a reasonably fair system of making regular adjustments to minimum wage," said Alberta Federation of Labour President Gil McGowan. "Between the late 80's and late 90's there were long periods of years where minimum wage did not change at all."
McGowan said that during that period, the actual purchasing power of the minimum wage dropped by as much as 60 percent in light of inflation rates.
"We feel we've taken a huge step backward," said McGowan. "It's only recently they did what they should have done 30 years ago by introducing a system to index the minimum wage, and we're incredibly disappointed they are dropping the system barely a year after it was introduced."
The provincial government only started linking the minimum wage increases to the Alberta weekly earning index in June 2007, leading to an increase from $8.00 to $8.40 in April 2008, and to the current 8.80 in April of last year. The minimum wage in Alberta ranks sixth in the country.
"Indexing minimum wage was applauded by the vast majority of Albertans," said McGowan. "The inevitable result is that the value of the minimum wage will erode as inflation continues it's upward march."
McGowan said the real worry is the economic and social impacts the decision will have on the provinces lowest paid workers.
"Without a system for adjustments the minimum wage went from being a subsistence wage to being a real poverty wage when there were no increases," said McGowan. "Our most vulnerable workers will pay the price."
McGowan said if they had stood by the weekly indexing system, the minimum wage would have risen only 12 cents in 2010--an amount he said would have little impact on small businesses.
"I find it hard to believe such a small increase would have had any significant impact on employment," said McGowan. "I don't believe for a minute that this freeze will create jobs or maintain jobs, all it will do is pick the pockets of our vulnerable workers.
McGowan said studies indicate modest increases in minimum wage don't result in job losses during recessions, in fact, wage increases can have the opposite effect.
"Increasing the minimum wage modestly can actually create more jobs because low wage workers tend to spend all their money in local communities instead of saving or investing it, or buying luxury imported goods," said McGowan. "The wages paid to the lowest workers tends to be recycled in their community."
Whitecourt Star, Tues Mar 2 2010
Byline: Mike Constable
The province announced today its decision to keep minimum wage at $8.80 an hour throughout the year.
"They're essentially taking money out of the pockets of the most vulnerable workers in the province," said Gil McGowan, president of the Alberta Federation of Labour, who called the freeze "mean-spirited" and "short sighted."
He added minimum wage is barely a poverty wage in most of the province, but particularly in places like Fort McMurray where the cost of living is through the roof.
"If they think this move will save or create jobs, they're dreaming in technicolour," McGowan said. "During a recession, it's not minimum wage jobs that are being lost - it's high-paying jobs in the energy sector or the public sector that have been lost. This move won't accomplish the government's stated objective of creating jobs. It will just make it that more difficult for people on the low end of the income ladder to make ends meet."
Not so, argued Barrie Harrison, Employment and Immigration spokesman. When the minimum wage is raised and businesses only have a certain budget to work with, "they may have to layoff some of their staff in order to adhere to the law," he said.
"There are studies that have shown when you raise minimum wage, especially during tough economic conditions, it can cost jobs. We want to make sure as many Albertans as possible, including those on entry level wages, continue to keep working, and at the same time, provide small businesses with this opportunity to remain viable and competitive ... until the economic conditions strengthen."
In announcing the wage freeze, Thomas Lukaszuk, minister of Employment and Immigration, announced he will request an all-party committee review of the current policies.
Fort McMurray Today, Sat Feb 6 2010
Byline: Carol Christian
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
While the Canadian Federation of Independent Business (CFIB) applauds this, the Alberta Federation of Labour (AFL) balked at the move by Employment Minister Thomas Lukaszuk.
Gil McGowan, AFL executive director, said it's a "mean-spirited and heartless move" and it will hurt the lowest earners in Alberta.
Minimum wages in the country range from $8 an hour in British Columbia to $9.50 in Ontario.
Alberta's minimum wage, which is tied to the province's weekly earnings index, increased from $8.40 to $8.80 an hour on April 1, 2009.
McGowan said the freeze will make it more difficult for those at the bottom of the income ladder.
"I would describe this move as heartless and completely unnecessary," said McGowan.
Lukaszuk said the decision will both protect jobs during the recovery from recession and support Alberta's economy.
"In addition to freezing the minimum wage, I will also request an all-party committee review of our current policy, ensuring that our approach is what's best for Albertans," said the minister.
The province said the move won't only ensure Albertans in entry-level positions have jobs, but it will also keep small businesses viable and competitive through global economic recovery.
Richard Truscott, Alberta director of CFIB, said the timing of the freeze is perfect because the global economy is starting to recover but it's still fragile.
"Definitely the small business sector's confidence is growing, but it's still shaky," said Truscott.
"Increasing the minimum wage at this time may have a big impact on the optimism and confidence in small businesses," he said.
McGowan argued that most minimum-wage earners are employed by large restaurant chains and not necessarily by small businesses.
"The province is handing more money to fast-food restaurants and coffee shops by freezing the minimum wage," said McGowan.
The province will announce later details of the minimum wage policy review.
Since 2007, the rate has been upped every year but before that, changes to the wage were irregular.
Calgary Sun, Fri Feb 5 2010
Byline: Renato Gandia
The minimum wage in Alberta is going up on April 1 from $8 per hour to $8.40. The Alberta government has put in place a system where the minimum wage is tied to the "average weekly wage index" from Statistics Canada. Every April 1 the minimum wage will automatically increase to keep pace with other increasing costs and wages in the province.
"Alberta's experiencing a time of great prosperity," said Premier Ed Stelmach in a press release. "Wages have increased about five per cent and we're ensuring minimum wage earners are sharing in this growth."
About 70,000 Albertans or 3.5 per cent of the province's working population are paid at minimum wage. Most Albertans make much more than minimum, with the province's median pay at $20 per hour according to Alberta Employment and Immigration spokesperson Stephanie Francis.
Most minimum wage earners are employed by the food service and hospitality industries according to the Alberta government. In 2006 nearly half of such earners were 15-19 years old.
The Alberta Federation of Labour (AFL) criticizes the wage increase as being too low, recommending a minimum wage of at least $10 per hour. In a press release the AFL said a higher minimum wage would have a "ripple-through effect" that would raise wages throughout the province.
Government spokesperson Francis said the amount of increase was "about keeping the balance between minimum wage earners and employers."
The increase will briefly bring Alberta's minimum wage to the fifth highest in Canada, third among the provinces. Ontario will have the highest minimum wage for adults, which will go up to $8.75 on Mar. 31. That will edge out Nunavut at $8.50. But minors and liquor servers have lower minimums in Ontario.
Other provinces and territories of note:
- Yukon will go up to $8.58 on Apr. 1. Yukon increases its minimum every year to keep pace with the consumer price index from Statistics Canada. This is a different index than what Alberta uses.
- Manitoba will raise its minimum to $8.50 on Apr. 1.
- New Brunswick and Newfoundland and Labrador have equal or lower minimum wages, but both provinces are set to increase them this spring.
- Saskatchewan will raise its minimum to $8.60 on May 1.
- The lowest minimum wage in Canada will be in Prince Edward Island at $7.50.
- The NWT's minimum wage will remain steady at $8.25.
Barb Wyness of the Union of Northern Workers said they have proposed a $10 per hour minimum wage in the NWT, to be recalculated annually to keep pace with StatsCan's standard of living index.
Slave River Journal, Thurs Mar 27 2008
Anyone working for minimum wage will be glad to know they're getting a raise, but employers might find their payroll getting tighter as they have to raise wages across the board.
Although the Alberta government's decision to introduce an automatic increase to the minimum wage in the province was well received by the Alberta Federation of Labour (AFL), the group's president, Gil McGowan, said the minimum wage is still too low.
As of yesterday, the minimum wage rose to $8.40 from $8.00.
"Is it mathematically possible to earn a living in Alberta on that wage?" asked David Swan, member of the Vulcan and District Chamber of Commerce. "If you can't live on it, it's moot."
According to McGowan and the AFL, the minimum wage should be $10 an hour.
"Let's start with a realistic and fair minimum wage -- and then take it from there," he said.
But Alberta boasts one of the highest minimum wages in the country, said Scott Mitchell, owner of Market Street Foods.
"Honestly, I think it's getting a little ridiculous," said William Pilon, manager of the A&W, about the hike. "I have no problem with it, I understand the need with the growing economy, but once a year is enough."
The minimum wage had already increased by one dollar to $8 an hour on Sept. 1, 2007, and re-adjusting wages barely six months later is a pain, Pilon said.
"You're not just adapting for new staff, but for all existing staff," he said.
Just because someone's hourly wage is already more than the minimum wage, doesn't mean they wouldn't also get a raise.
After all, if someone's worked for a long period of time and a new employee comes in earning more, problems can arise.
"We're having a hard enough time finding staff as it is," Pilon told the Advocate last week, at which point he'd received one application in two weeks for a position he'd advertised.
Out of an ideal staff of about 25, Pilon's roster sits at 14, having recently lost some staff, he said.
A&W has been working on a program to bring in foreign workers, which is something Pilon has been looking into.
Being so short of staff puts him in the position where he doesn't have much in the way of other options, even if he would rather hire within the community, he said.
Some employees aren't that impressed by the minimum wage hike; either.
"Basically, nothing is changing, it's just the numbers going up -- but it's a nice thought," said Jayleen Kolody, who's worked at A&W since June.
With the base prices of living constantly rising in Alberta, such as rent, food and gas, the increase to the minimum wage will have a negligible effect, she said.
Agreeing that people should make more with the growing economy and increasing living costs, Pilon said it hurts the employer in the long run.
"It'll probably end up affecting the small business person to the point where they can't employ as many younger staff," said Mitchell.
Vulcan Advocate, Wed Apr 2 2008
Byline: Simon Ducatel
On April 1, Alberta's minimum wage increased from $8 to $8.40 per hour. In June 2007 the Alberta government announced the increase to minimum wage would be based on the average weekly wage index. The index is based on Statistics Canada's annual survey of employment, payroll and hours.
Ponoka-Lacombe MLA Ray Prins thinks that the increase is a positive move.
"I think it is a good move. It is keeping up with the general inflation with rates over the province. We have tied it to the average weekly wage index so this is a good move for people on minimum wage," said Prins. "All jobs have a value according to supply and demand and the minimum wage is basically a starting wage for young people or low skill people or part-time jobs."
Michelle Stirling, job search advisor for Ponoka Employment Services, a sub-contractor to Alberta employment and immigration thought it was a step forward. However, she thinks that the cost of living in most centres is much higher than this incremental raise.
"For the employer any change in the wage ratio has an impact on their margins so even though employees would like and need a higher raise employers always have to struggle with the consequences, especially smaller business," said Stirling.
With the current increase Alberta's minimum wage remains the highest in Canada after taxes. Before taxes, Alberta will have the third highest minimum wage among provinces behind Ontario ($8.75) and Manitoba ($8.50).
"I'd say most people are paying above that anyway it is such a volatile economy right now. I suspect we are going to see rises in things such as food with the rising prices of oil world wide," said Stirling. "So these types of increases will always be a bit behind because they are legislated and there is a whole process involved with a wage change and it takes time."
The Canadian Federation of Independent Business Alberta director Danielle Smith had a few problems with the increase. She thought that there was a lack of consultation with businesses and that businesses were not given enough time to adjust to the new announcement. In June 2007, the increase was announced, it increased from $7 to $8 on Sept. 1, 2007 and went from $8 to $8.40 on April 1, which was announced on March 18.
Prins said that in the future the notice will not be a problem.
"Industry now knows that minimum wage will be connected to the average minimum wage index and from time to time there may be an increase, if this goes down the minimum wage will not go down," said Prins.
Smith says that most of the employers have had to increase wages and that very few people are currently making minimum wage. Those who are making minimum wage are in the hospitality industry and low skill workers. She also feels that the new increase will have a large impact on all employers.
"When minimum wage goes up it causes wage inflation because somebody who is currently making $8.40 an hour they now want an increase as well," said Smith. "There are lots of occupations where they try to keep a certain differential, you can see this bump up a wage scale of a variety of contracts. It has a much broader effect on the overall cost of the salaries that are being paid to workers." The CFIB's annual Help Wanted report showed that 6.3 per cent of jobs in Alberta firms went unfilled for at least four months in 2007, the same as in 2006. They estimate that is the equivalent of 54,000 jobs.
Prins hopes that the wage increase will help the work shortage.
"In general it is a move in the right direction for people on minimum wage. The whole shortage of labour in Alberta is a problem for employers right across the board hopefully this will help a little bit to attract some workers into the work force."
The Alberta Federation of Labour approved of the increase but president Gil McGowan said it was not enough.
"We estimate that a living wage right now in the province would have to be at least $10 per hour. What the government needs is a minimum wage that actually reflects the high cost of living in Alberta," said McGowan in a press release. "A minimum wage, after all should prevent full-time workers from living below the poverty line."
The 2007 Alberta Wage and Salary Survey was commissioned by the governments of Alberta and Canada to provide information on wages and salaries for full and part-time employers by occupation, region and industry. Nearly 3,000 employers participated in the survey covering more than 400 different occupations and representing almost 200,000 full and part-time employees.
The survey found that Alberta's average wage rate was $23.90 per hour. Cashiers in Alberta were on average making $9.63, administrative clerks made $19.23, oil and gas workers $30.12 and managers in health care made $34.49.
In the Red Deer region food and beverage servers made $8.59 compared to the provincial average of $8.78. Truck drivers in the Red Deer region made $18.91 compared to the provincial average of $24.71. Accountants in the Red Deer region made $41.85 compared to the provincial average of $25.66.
Ponoka News, Wed Apr 2 2008
Byline: Tiffany Williams
When people find out they are going to be making more money, it is usually cause for celebration. The recent increase of Alberta's minimum wage however, has launched a new episode of debate on the fallout of increasing base earnings in the province.
While the Alberta Federation of Labour (AFL) was pleased with the recent minimum wage hike, they claim it still isn't enough to match the cost of living. "The province's senior labour central contends that the increase is too small because the base rate is too low." On April 1 of 2008, the minimum wage will increase from the current $8 an hour standard to $8.40.
The AFL's position is that while they welcome any increase in the minimum wage, the recent hike just isn't enough. AFL President Gil McGowan says, "We estimate that a living wage right now in the province would have to be at least $10 per hour. So the government-mandated increase to $8.40 per hour as of April 1 this year is actually very disappointing."
In 2007, average weekly earnings increased 5 per cent, so minimum wage will increase 5 per cent from $8.00 to $8.40 per hour. "The problem with linking minimum wage increases to the growth in average weekly earnings is that it assumes that the phenomenal growth taking place in some municipalities and industry sectors is happening everywhere," said the Canadian Federation of Independent Businesses, which contends that the increase will hurt small business owners. "This change could have a severely negative impact on employers in certain regions and industry sectors that are not experiencing a sharp increase in economic growth, particularly smaller municipalities and the restaurant and tourism industry."
In a resource-based economy like Alberta's, where the economy continually fluctuates, therecould easily be a situation where entry-level labour is priced too high. That could in the long run decrease the number of jobs, especially for entry-level workers.
British Columbia addressed this problem by creating a lower minimum wage for entry level workers, which is basically a "training wage" that allows business owners to compensate for the investment required to train new employees. Quebec and Nova Scotia have similar alternatives.
As of January 1, 2008, Alberta ranked near the middle of Canadian provinces in minimum wage, even though Alberta does have the lowest income taxes of any Canadian province. Ontario's minimum wage is scheduled to exceed $10 in 2009, and even with the increase, Alberta will still be below the minimum wage standards in Nunavut, Manitoba and the Yukon.
According to the Consumer Price Index (CPI) survey, in 2007 Calgary and Edmonton had the highest costs of living of any major Canadian city. That statistic is very surprising, in light of the fact that Calgary and Edmonton were being compared to cities who are generally thought of as having higher costs of living: cities like Toronto, Vancouver, and Ottawa. The CPI statistics are based on the costs of housing, household items, food, transportation, etc. In fact, the index showed that Alberta cities hadmuch higher costs of living than did any of the cities with a higher minimum wage.
Those that oppose minimum wage increases say that it leads to major problems, especially for small business owners. A higher minimum wage, they claim, can lead to higher unemployment, increases in prices to consumers, less recruitment of new employees, and less employee benefits.
The AFL says that right now in Alberta, there are only about 70,000 workers making minimum wage, with many more earning an hourly wage just above the minimum. "What Alberta workers need is a minimum wage that actually reflects the high cost of living in Alberta," said McGowan. "A minimum wage, after all, should prevent full-time workers from living below the poverty line."
That poverty line in the year 2000, for a family of four, was just above $32,000 in the city of Calgary. After the increase in April, making $8.40 an hour, the average worker putting in 40 hours a week with no vacation would gross little over $17,000 annually, before taxes. It should also be noted that Edmonton has recently experienced the highest increase in poverty of any Alberta city.
Premier Stelmach has said that only 3.5 per cent of Albertans earn minimum wage, with most of those being teenagers. However, raising the minimum wage has an impact on all hourly wage earners. Even with a minimum wage increase to $10 an hour, working 40 hours a week with no vacation, the Alberta worker earning minimum wage would barely eclipse the $21,000 annual earnings mark, still well below the year 2000 poverty line.
While it is a relatively low number of workers in the province that currently earn minimum wage, it is apparent that those workers are not able to sustain themselves, and that conclusion is reached using eight-year-old statistics. Since the year 2000, the cost of living has climbed dramatically. While there are consequences for increases in minimum wages, it does go a long way in improving the quality of life for those Albertans presently earning minimum wage who can barely get by, and has recipricol effects on thousands of other workers.
Barrhead Leader, Tues Apr 1 2008
Byline: Andrew Coffey