By Collin Gallant on September 29, 2018.
One quarter of workers in Medicine Hat will get a raise Monday when the minimum wage rises to $15, but a right-of-centre think tank and local anti-poverty group dispute how effective the increase will be.
Business owners as well are saying the move is too much, too fast, and could backfire in the way of higher prices or hours cut, while advocacy groups and the provincial government say higher wages will improve workers’ lives.
This month, the Chamber of Commerce released its position that a final jump in the New Democratic government’s planned minimum wage increases should be cancelled, with the rate then tied to inflation.
That opinion was co-authored by Thrive Southeastern Alberta, a group that aims to alleviate poverty through better co-ordination between government and charities.
Its executive director said Friday that a variety of factors, such as housing, transportation and food costs, are included in so-called living wage calculation.
“Thrive has never been against minimum wage increases but we’d rather advocate to a more robust response to poverty,” said the group’s executive director Karen Danielson on Friday.
“With wages going up, we have to think about the other parts … we have to really make sure we’re looking at all the factors.”
Alberta’s labour ministry states about 300,000 workers in the province, 11 per cent of the workforce, earn less than $15, and 75 per cent are older than 20.
Minister Christina Grey said in a statement Friday that the move will certainly improve the lives of low-income Albertans and “make life more affordable for women, single parents, families and everyone who has been working a full-time job or more but is still struggling to put food on the table and pay their rent.”
An extra dollar in hourly wages is worth about $2,000 per year to a full-time worker, but the same amount is added costs to employers.
Albert Cramer, is the president of Big Marble Farms, and a board member with Redhat Co-op, and says those organizations will be faced with much higher wage costs.
“Time will tell, but I don’t know if we can (raise prices),” said Cramer, saying the local produce sector competes with growers in Ontario and British Columbia, where minimum wage is lower.
“I’m not advocating against anyone making more money … but we’ll be the highest minimum wage in the country.
“We need to compete against the rest of Canada, that’s the reality of it.”
Ontario Premier Doug Ford said this week his government would halt a planned increase to $15 on Jan. 1 promised by the previous Liberal government. The legal minimum wage rate rose from $11.60 to $14 per hour last January.
In British Columbia, New Democrat Premier Joe Horgan announced last winter the rate would rise to $12.65 in June 2018, and eventually to $15.20 in 2021.
The Saskatchewan minimum wage will rise 10-cents to $11.06 on Oct. 1.
Monday’s $1.40 per hour increase in Alberta brings it to $15, compared to $10.20 in early 2015.
That’s too swift, according to a study from the right-leaning Fraser Institute, stating such increases are too blunt to help lower income families and claiming they isn’t supported by demographic data.
Specific to those earning the current minimum wage, half were under 20 year old, most living with parents, and one quarter of all such workers had spouses that worked full time to augment income.
“This is not an effective strategy,” the study concludes. “(It) poorly targets those in need … (and) produces unintended consequences that harm young and inexperienced workers.”
It also states recent increases to Canada Workers Benefit and the Alberta government’s 2015 expansion of the province’s Family Employment Tax Credit program were more targeted.
That study mostly looks at the demographics of those earning exactly the minimum wage, while the head of the left-leaning advocacy group Public Interest Alberta says all those who earn less than $15 should be considered.
Joel French, PIA’s chair, says 4,700 Hatters earn exactly minimum wage, but 7,800 local workers earn less than $15 per hour. That equates to 25 per cent of the Medicine Hat workforce.
He said if regional differences were factored in, the minimum wage should be much higher.
“Cost of living is a factor, but when it comes to a provincial minimum wage, $15 an hour in most communities is right around that level,” he told the News on Sept. 16.
“Where the problems come with cost of living is actually in the cities of Calgary and Edmonton and some northern communities where the cost of living it considerably higher and the living wage level can be significantly above minimum wage.”