Minimum wage hike working in Alberta despite gloomy predictions

The minimum wage in Alberta has steadily risen for two and half years.

By October, it will be $15 an hour — almost 50 per cent higher than in 2015 and the highest in Canada.

Of course, just as in Ontario, when the NDP government first announced the staged increases there were a lot of dire predictions about businesses going bankrupt and jobs disappearing because, until that point, Alberta’s minimum wage had been among the lowest in the country.

But so far all those dire predictions haven’t materialized in Alberta.

In fact, the Statistics Canada labour force survey for December notes that Alberta led employment growth in Can- ada with accommodation, food services and natural resources the star performers.

In October, ATB Financial reported that restaurant and bar sales in Alberta had reached an all time high.

It seems all those hotels, restaurants and bars and the people who make them all work are adapting quite well to the hikes in minimum wage.

According to Trevor Tombe, an economist at the University of Calgary, there’s another indicator that increasing the minimum wage didn’t bring about catastrophe.

“Research suggests that minimum wage increases depress employment rates for teenagers and to a lesser extent young adults (20-24),” Tombe wrote in an email.

Labour statistics confirm that age group was hit hard in Alberta when the slumping price of oil brought on a recession. However, in neighbouring Saskatchewan, which also suffered due to low oil prices but didn’t raise its minimum wage, the unemployment rate for this age group is the same as in Alberta.

“Indeed, the two provinces overlap almost perfectly. So, if minimum wage changes had an effect in Alberta, it’s far too small to easily detect in the data,” Tombe added.

Ronnie Milec is head chef at the Ranchman’s Cookhouse and Dancehall, a popular country and western nightclub in Calgary. He’s been working in food services for 15 years and says there are still plenty of jobs available for the taking.

“There’s more competition for the jobs because so many young people switched from working in oil and gas to food services. But from what I see, increasing the minimum wage hasn’t hurt the industry a lot,” he told me.

Robert Vidra is sole owner and CEO of Simply Elegant, a Calgary hospitality firm that specializes in event planning and catering. He supports the government’s decision to raise the minimum wage and says when he started up in 1996 paying his employees above minimum wage was the best business decision he ever made. His minimum wage is now $17 an hour.

“You can create a great team that works together to make the company successful. I believe in providing good service . . . staff retention is key to that,” Vidra told me.

But he sympathizes with smaller businesses where, he says, the owners “have bought themselves a job” and rely on two or three employees to keep it going.

“They all work long, long hours. And an increase in minimum wage could easily put them under because they are ill-prepared to run a business,” Vidra said.

The crux of the problem for the food industry, he continued, is undercharging, often at the expense of workers in order to attract customers.

“Consumers have to pay more, pay for the real value of what they are getting,” Vidra said. I agree completely. If an inexpensive meal in a restaurant can only be provided on the backs of people slaving away in the kitchen for next to nothing, maybe we should consider a restaurant that charges a bit more.

If we really need qualified, caring people to look after our children and our elders, shouldn’t we be prepared to pay them what that is worth to us?

And what about all those women who keep hotel rooms clean and tidy? Are we getting a good room rate because they don’t earn enough to properly support their families?

Besides, if people earn more money, they spend more money and in the end everyone benefits.

The Alberta government took a big risk and faced a lot of determined opposition when it raised the minimum wage.

But so far it’s working well.

If we really need qualified, caring people to look after our children and our elders, shouldn’t we be prepared to pay them what that is worth to us?