We recently learned that the NDP has begun gradual increases to the province’s minimum wage.
The first increase will happen this October when minimum wages will rise $1 to $11.20. They will top out at $15 an hour by 2018. On top of the raising of the minimum wage, the separate wage for those who serve liquor will also rise from $9.20 to $10.70 in October, with the differential being eliminated entirely by 2016.
This was one of Premier Rachel Notley’s campaign promises and she was quick to make good on her word.
So what does this all mean? Over the last week since the announcement, we have heard both positive and negative feedback from citizens and business owners.
Of course on the positive side, it makes life a little better for those who are making minimum wage.
The Parkland Institute has said the raising of the minimum wage will have little to no impact on the employment rate – which we have seen as a concern in recent headlines across the province. As well, they have said raising the minimum wage means more money will be circulating in the economy and lower earners will have more spending power. It can also lead to less employee turnover and more stabilized workplaces.
On the negative side, many believe the rise in wages will be passed onto consumers as businesses, in particular small businesses, will need to increase the prices of their product to compensate for the increase in wages.
As well, the Alberta Chamber of Commerce released a statement indicating the Canadian Federal Government will be among the biggest beneficiaries with the minimum wage hike.
The Alberta Chamber of Commerce also said while businesses will be required to pay out an additional $9,600 per year to workers who currently make minimum wage, increases to federal taxation and the reduction in the amount paid out through programs such as the GST Credit, Canadian Child Tax Benefit and the Working Income Tax Benefit would result in substantially less than $9,600 going into the pockets of low-income earners.
Really how this all will play out is yet to be seen.
Of course it is nice to see in general the minimum wage being raised. Alberta is one of the most expensive provinces to live in and it is hard to imagine trying to support oneself or a even family on $10.20 an hour. It is virtually impossible.
Currently Alberta’s minimum wage is the lowest in Canada but that will change come October when it will be the third highest in the country.
There are about two million workers in Alberta and about 38,600 Albertans were earning minimum wage from April of last year to March of this year.
Nearly 36% of those are between 15-19 years of age. Just over 15% are between the ages of 20-24 and 11.8% are 55 years old and over. Of those minimum wage earners, 62% are female. As well, 67% say their jobs are permanent which is concerning.
Hopefully come 2018, business will have adjusted to the increase in wages and the outcome won’t be as catastrophic as some say.