In October 2017, the Alberta minimum hourly wage increased to $13.60 from $12.20. A year later, in October 2018, Alberta’s New Democrat government has vowed to raise it by another $1.40 to $15 hourly. Some would describe it as a significant increase, while others see it as moving away from a minimum wage towards achieving a living wage for low-income workers. In some regions of Alberta, the living wage is pegged as high as $18 an hour.
The New Democrat government sees it this way: “The living wage is calculated as the hourly rate at which a household can meet its basic needs, once government transfers have been added to the family's income and deductions have been subtracted. The living wage gets families out of severe financial stress by lifting them out of poverty and providing a basic level of economic security.”
The stats tell us about 300,000 people, 15.5 per cent of Alberta workers, earn less than $15 per hour. Of those, the majority, 60 per cent, are female, 40 per cent are parents, 51 per cent work full time and 79 per cent have permanent jobs. Not surprisingly, the majority of these workers, 183,000, work in the retail industry or accommodation and food services.
Reaction by the Alberta business community to this increase was swift and expected last year. With forecasts of layoffs, reduced employee hours, fewer benefits, increased consumer prices, further hindering an economy stagnated by low oil prices – many feared the wolf was at the door. Time will tell if any of these fears will be realized. Economists are certainly of two voices; some believe putting money into the hands of the working poor by establishing a living wage, translates into more money finding its way back into the economy.
Last month’s Labour Force Survey saw Alberta and Quebec at the head of the pack for job growth in the country. Alberta job numbers increased by 26,000, mostly in full-time work. The unemployment rate was down to 6.9 per cent. The employment gains were seen in a number of industries, but were led by accommodation and food services, and by natural resources.
It’s particularly interesting the food services sector in Alberta was one of the leaders in job growth last month, in light of the fact the first minimum wage bump occurred two months earlier. It does give one pause to wonder if the move from a minimum wage to a realistic living wage forecasts doom and gloom in the business sector, as some would have us believe, or is it a realistic cost of doing business in Alberta and in an economy that is showing signs of recovery.
