TRYING ON A NEW MINIMUM WAGE
What will Alberta’s 10% pay raise look like on the front lines?
Carly Miller has her dream job at The Bridal House, working with lace and soft fabrics, fetching veils and helping brides and bridesmaids during their dress fittings.
On Oct. 1, Miller gets a $1-perhour raise as the NDP government takes its first step to boost the minimum wage to $15 by 2018.
Associations representing businesses and restaurants are wary and anxious about the move, sug- gesting businesses might reduce employee hours or hire fewer young people as the rate ramps up. They, along with the Wildrose party, say there are better ways to provide living wages. Yet economists and empirical studies are divided on the effects such a move brings: job losses or a boost to pocket books? Fewer opportunities or better standards of living?
Sure, this first jump is relatively small, raising the bar to $11.20 from the basic $10.20 minimum wage. Liquor servers and waiters, who also earn tips, will be paid $10.50 per hour, up from $9.20 as the government aligns the two pay schemes.
But while annual hikes to minimum wage have been the norm in Alberta, Thursday’s jump of approximately 10 per cent is substantially higher than the 2.5-per-cent increase in 2014. The move also catapults Alberta from being the province with the lowest minimum wage (alongside Saskatchewan) to one of the highest. By 2018, Alberta will become the first province in Canada to offer $15 an hour, among a handful of North American jurisdictions to commit to that amount.
The politics don’t concern Miller, who works six hours every Saturday at The Bridal House, and another six hours during the week at Winners, where she organizes shoes and stock shelves. The 18-year-old has intellectual and developmental delays and needs rote work with some oversight, but loves fashion and complimenting people on their outfits.
The extra $12 a week — $48 per month — might sound piddling to some, but has real value. She’ll be able to see more movies, treat more friends to coffee. The extra cash will also help Miller pay for taxi rides from work to the gym in November, when she’ll no longer be able to walk because of balance concerns.
“It makes me confident,” Miller said of her raise. “I feel confident and very proud of my work. … No one judges me. No one looks at me in a different way.” Her mother, Renee Miller, agrees. “I think that’s important to Carly’s self-esteem and her selfefficacy,” Renee Miller said, noting her daughter has blossomed socially by working in sales. “Carly is fortunate because our family is financially stable, but for those people with intellectual delays who are receiving funding from AISH (Assured Income for the Severely Handicapped), I can’t imagine how difficult it must be to maintain an acceptable standard of living on minimum wage.”
Yet Renee Miller worries the $15 minimum-wage promise could have repercussions for her daughter. Laid-off workers could flood the market.
“There are so many more people that have higher skill sets than someone like Carly that, in the future, the doors may not be so open to her,” Renee Miller said. At the same time, “it’s important that that population is not dismissed.”
Ken Kobly, executive director of Alberta Chambers of Commerce, agrees such jobs are valuable, but he’s heard one business owner near tears, fearful she won’t be able to hire many people with disabilities at $15 an hour. Kobly said he suspects more fast-food and big-box stores will move toward self-service options, limiting entry-level jobs for young teens.
“There is a misconception out there that folks who own their own small business are just rolling in the dough,” Kobly said. But businesses are being hit with higher food prices and other rising costs.
“Business recognizes that it is a societal issue to raise people out of poverty. But does that fall squarely or totally on the backs of business?”
Joseph Marchand, a University of Alberta economics professor, said according to conventional economic theory, the Oct. 1 wage increase will lower the employment rate by two per cent.
“(But) a lot of empirical studies have refuted that and said that there would be no negative employment effect and maybe even a small positive employment effect,” Marchand said. Economists fall 50-50 on either side of the argument. Even Marchand, who studies boom and bust cycles, is divided.
“I think I’m optimistic in terms of a third energy boom, but I’m pessimistic that there’s going to be no employment impact or a positive employment impact. I think we should assume there’s at least a small negative impact,” Marchand said. He advised government to move slowly while oil and gas prices are down, then jump to $15 when prices recover.
But Shane Loiselle, part-owner of Daravara pub and restaurant on 124th Street, supports upping the pay of five or six servers out of 20 employees who currently receive the lowest rate. Other jurisdictions have done it, Loiselle said, and the sky hasn’t fallen.
“I think it’s a good thing for Alberta. I think it’s a good thing for employees,” Loiselle said. “From a business point of view, if I’m running my business properly and my margins are in place, if I approach this properly with small incremental increases, typically it shouldn’t really be felt.”
He’s raised some menu prices by a dime or 25 cents and few patrons have noticed.
“I’m all for progression and progressive employee standards,” said Loiselle, who hires a lot of musicians, artists and students. “When you say $1 extra per hour, it sounds pretty minute, but if you’re working 30 hours a week and 48 weeks a year, it’s a fair amount of money.”