Pros and cons of the minimum wage hike

By Laura Bohnert

On October 1, 2015, Alberta’s minimum wage increased to $11.20/hr. and, despite the current economic situation, Alberta’s government remains committed to the plan to boost that wage to $15/hr. by the end of this term.

The wage increase is intended to give Alberta’s lower-income earners the ability to support their families and, while the plan is generating quite a bit of controversy, it is important to note the statistics in order to determine just how much of the population could be helped.

According to 2015/2016 statistics, approximately 59,000 Albertans currently earn a minimum wage. The majority of those earners (61 per cent) are female, less than half of them (43 per cent) work full-time, and nearly 77 per cent have permanent jobs.

And. here are a few more statistics for you: more than 300,000 Albertans currently earn $15/hr. or less, and more than 50 per cent of those earners are the heads of their households. Further, more than 33,000 of those earners are single earners with children.

The wage increase presents a number of risks including the concern that an increase in minimum wage will cause workers to lose mobility preventing workers from using minimum wage positions as stepping stones to better paying jobs—although, as the cost of living continues to rise, it seems unlikely that this will continue to be a problem for long and, to point back to earlier statistics, 77 per cent of the current minimum wage positions are permanent positions anyway.

The most obvious risk to the minimum wage increase is a loss of employment among low-skilled workers. If businesses are feeling financial strain as a result of being required to pay employees more, then the first employees to experience that cut in hours—or job losses entirely—will be the minimum wage earners who have less experience.

That said, it is important to note where the concerns regarding the minimum wage hike are coming from. On one hand, they are coming from the concerned citizens who already earn more than a minimum wage and are concerned that their pay will thus no longer reflect their advanced experience—experience which has been garnered after having had the opportunity to work for years in their field, and earn a living wage during that time. But, shouldn’t we, as fellow workers, offer consolidation instead of disapproval? Shouldn’t we be united as a workforce to ensure that no-one is getting underpaid? Isn’t that the best way to ensure our own paychecks? Not to mention, Alberta just experienced major layoffs and job cuts—wouldn’t it be nice to know that if tomorrow you are out of work, you could at least earn a living wage working at a minimum wage job until things pick up?

Concern is also largely being put forth by business owners, viably by small business owners who are worried about having to put prices up in order to be able to afford to keep their workers but, also, by large corporations—those who have heretofore had the most influence—who are worried that a minimum wage increase could put a damper on the relatively astronomical profit margins that they have maintained by undercutting employee hours so they don’t have to pay their employees full-time benefits (Walmart, Chapters, etc. I’m looking at you). This is who the pay increase is for, for workers who are working multiple part-time jobs due to a current shortage of full-time positions, or a current unwillingness of corporations to hire full-time workers.

And, of course, underlining all of this is an economy that is producing far more educated and trained people than there are currently jobs for.  Ensuring a minimum wage that is actually liveable provides an opportunity for those individuals to earn a subsistence that can feed back into the economy—these, after all, are the majority of your clients now, business owners, and if they earn more for jobs they are working hard at, too, then maybe they won’t be so opposed to paying you more for your services.

Maybe providing the majority of Alberta’s residents with paychecks that actually cover their living expenses is a good way to enable them to pay for the extra products and services that will actually contribute to putting money back into Alberta’s economy instead of adding to its overall debt.