Alberta’s Minimum Wage will go up to $15 in 2018. But what effect will this have?
By Dhan P.
Under the Alberta NDP’s 2015 election campaign, they promised to raise the minimum wage. In October of the next three years, the minimum wage will rise. But some are opposed to the change, and some are for it. But what are the facts?
Alberta’s NDP government has officially passed legislation that will raise the minimum wage from the current $11.20/hr to $12.20/hr as of October 1st, 2016. The legislation will also raise the wage to $13.60 in October 2017, and to $15.00 in October 2018. In addition, October first will also eliminate the wage gap between liquor servers and regular minimum wage employees. When the change comes into force, Alberta’s minimum wage will be the highest of all the provinces, and only under Nunavut’s wage ($13.00/hr) and the Northwest Territories ($12.50/hr). These changes can only be reversed by the Premier Notley’s cabinet or by a future government. The government estimates that there are approximately 300,000 Albertans who earn less than $15 an hour.
Critics of the changes say that this is too much too quickly, and that this could cripple businesses that have slumped due to the economy. Proponents say that this will provide a much needed boost to lower income earners. But what will actually happen to the economy?
According to the Canadian Bureau of Independent Business (CFIB), the minimum wage hike could cost the province 50,000 jobs. However, it isn’t so black and white. According to the U.S. Department of Labour (DoL), a raise in the minimum wage has a small stimulative effect on the economy, due to increased spending. In addition, the DoL says that an increase in minimum wage has “Little or no negative effect on the employment of minimum-wage workers, even during times of weakness in the labor market.”
But what will happen? According to Craig Alexander, senior vice-president and chief economist with the Conference Board of Canada, in The Globe and Mail, “While there is a negative employment effect, that effect is probably limited.” So there will be some job losses, but the increase may provide a boost to the economy. The optimist’s projections are a small but significant boost to the flagging economy, with a minimal effect on employment, while the pessimist says that what effect there is on the economy will be more than nullified by the employment losses from the hike. The outcome is likely in between these two.
However, the change is virtually guaranteed to go through, job losses or not. So buckle up and let’s see what happens in 2018. For more information about the minimum wage, and what effect it has visit: www.dol.gov/featured/minimum-wage/mythbuster, and for the CFIB’s statement, visit: www.cfib-fcei.ca/english/article/7309–15-min-wage-in-ab.html