Alberta’s minimum wage will become the highest in Canada Sunday. It goes up to $13.60 an hour on October 1st, as part of the provincial government’s three year plan to reach a $15 an hour minimum wage by 2018.
On Friday, Labour Minister Christina Gray argued the move was necessary to avoid some Albertans having to choose between feeding their family and paying their bills.
“Nearly 300,000 Albertans currently earn less than $15 per hour. Most of these Albertans are women, one in three have a young family, some are single parents, over half work full time, and the vast majority are in permanent positions and all of them are deserving of a living wage.”
Gray argues that in addition to increasing the annual gross income for full-time minimum wage earners from $25,376 to $28,288, the province’s economy will also benefit.
“Because when low-wage Albertans have more money, they spend it on their basic needs. They spend it on housing, transportation, school supplies, clothing, and groceries. This increased spending power in turn supports our economic recovery.”
While the minimum wage increase has been applauded by some, others are critical. A report by the C.D. Howe Institute concluded the move could potentially lead to the loss of roughly 25,000 jobs. Associate professor of economics for the University of Alberta says a similar number of people have already lost their jobs since the policy was put in place two years ago.
“Given the boom and bust nature of the regional economy, Alberta should have timed its minimum wage increases with upward movements in energy prices, and/or followed through with its initial job creation tax credit or some other instrument allowing for greater economic flexibility. Instead, by ignoring economic conditions, the province mistakenly prioritized higher wages during a time when employment was a problem.”
Meanwhile, the Alberta Federation of Labour agrees with the NDP that a $15 minimum wage is good for the province. In a release, president Gil McGowan says there’s evidence it can achieve higher wages and higher employment at the same time.
“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,”he explains. “When you look at the meta-analysis of studies done that look at 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.”
Currently, the minimum wage in Alberta is $12.20 an hour. The next jump will be to $15 on October 1, 2018.