Alberta addresses the wrong problem
NDP to raise minimum wage to $15 by 2018
If one were to pick a social problem in Alberta in need of fixing, low wages wouldn’t be it.
Even as the province’s jobless rate matches generational records, its unusually lucrative oil-and-gas dependence has traditionally edged everyone’s wages up. The median family income here is more than $100,000 — more than $20,000 ahead of the national figure.
And these wages aren’t confined solely to those shlepping into shiny oil-andgas towers in downtown Calgary, or to workers hauling tonnes of black sand in the north.
Because wages are so high in the black gold market, every other job, whether barista or teacher, needs to pay comparatively more to compete for traditionally scarce talent.
This is beginning to shift, of course, as one would expect given the drop in the price of oil. Even so, wages remain high even as Albertans find themselves suddenly horrified by tales of people lining up at job fairs.
So it’s a bit odd that the province’s NDP government this week confirmed plans to institute a $15 minimum wage by 2018. The hike will be introduced in stages over the next two years. In the midst of a recession, when the declining number of jobs is of greater concern than wages, it’s hard to see the political sense in ensuring Albertans are entitled to the highest minimum wage in the country, especially when such plans will almost certainly be met with some layoffs.
The $15 minimum has been popularized by progressives in the U.S. as a response to dismal wages for food workers in New York. Seattle has since implemented it, and New York and California have passed it into law.
Why the wage must be $15 everywhere, despite the fact that the cost of living var- ies widely by city and state, is never properly explained. Nor why such a wage would be a panacea in a province with a wildly different economy and distinct set of attendant social challenges. There’s nothing magic about the number “15.”
There’s a wealth of theory and research on minimum wages and the consensus among economists is that there is, hypothetically, an ideal one. When calculated as a fraction of a region’s average wage, a particular minimum wage could maximize spending and minimize job losses. How any of that theory will apply in a boom-bust province like Alberta, let alone at this particular moment, is anybody’s guess.
Which brings us to the point: why is the NDP adopting an ideologically driven policy that fails to address any of the problems the province actually has?
Only about two per cent of Albertans — 59,000 — earn the minimum wage, compared with seven per cent nationally.
About 10 per cent of workers here earn less than $15 an hour.
In fact, the average retail wage in the province is $16.09 already.
It’s certainly plausible that the hike will raise a relatively few people out of poverty — at the expense of, potentially, thousands of jobs that sustain those very same people
But it’s also a broad-based hike that doesn’t do much to really help the working poor specifically. All governance is a matter of setting priorities; why should Alberta focus on ensuring teenagers who live at home have more pin money instead of, say, addressing this province’s low educational achievement by encouraging dropouts to attain more credentials during a recession? Why not focus instead on investments in affordable housing or food banks? How about increasing the assured income for the severely handicapped? Why not more jobs training?
Surely there are better ways to target the ill effects of poverty than by adopting the sort of rhetoric chanted on the streets of Seattle and New York.
That is not to say that the minimum wage hike will necessarily be catastrophic; it’s just that it’s difficult to imagine how it’s going to help much, either. And it only reinforces the claim that Premier Rachel Notley is, indeed, indifferent to the plight of business and fatally weak on economic matters.