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Alberta's NDP government moves too cautiously, but in the right direction, on raising the minimum wage

Lori Sigurdson

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They may be moving too slowly and they may not plan to move far enough, but the announcement by Alberta's New Democratic Party Government that they would raise the province's minimum wage this fall by $1 an hour was a small step in the right direction.

Jobs, Skills, Training and Labour Minister Lori Sigurdson said in a news release yesterday the general minimum wage, currently and embarrassingly tied with Saskatchewan's as the country's lowest, would rise to $11.20 an hour on October 1. The minimum wage for liquor servers would rise at the same time to $10.70 from $9.20 per hour, "in the first of two steps to eliminate the differential rate altogether in 2016."

Not immediately eliminating the offensive and exploitive differential minimum wage for liquor servers -- apparently the brainchild of Thomas Lukaszuk, Alison Redford's deputy premier and labour minister -- displays a degree of tactical timidity not necessary for a government with a strong mandate to fix such legacies of 44 years of Tory misrule.

Still, the government of Premier Rachel Notley has made a commitment to consult with stakeholders, which is a reasonable enough approach, although there can be too much of a good thing in circumstances like these. In this case, alas, it is unlikely the cutthroat fast-food employers who are the principal beneficiaries of poverty-level minimum wages will pay much attention to arguments about either fairness or basic economics.

Indeed, judging from the brouhaha among many of the usual suspects, they will do whatever they can to delay movement of the $15-per-hour minimum wage the NDP has promised to have in place by 2018.

As has been argued previously in this space, to be a living wage, the minimum wage in Alberta probably really needs to be set at about $20, but it is unrealistic to expect the NDP to go there for the time being.

As it is, most opponents on the right have been screaming mightily that having something approaching a living wage for a minimum wage will unleash in an economic apocalypse that will reduce Alberta to Greece-like penury in a matter of hours. For reasons previously discussed, this is not a very likely prospect.

Media coverage yesterday concentrated on a survey, seemingly designed to elicit negative responses to the government's minimum wage plan, circulated to members by the Alberta Chambers of Commerce and released just in time for the announcement.

Not surprisingly, ACC President and CEO Ken Kobly warned the policy could result in reductions in employment opportunities -- an outcome that is unlikely in response to a minimum wage increase, although quite possible in Alberta for global economic reasons beyond the provincial government's short-term political control.

"The recurring theme that we're hearing from our members is that they'll raise prices wherever they possibly can," Kobly warned, leaving cynical observers of business to wonder… what else is new?

The ACC, like similar groups, suggests addressing the question of poverty through tax policy -- quite openly advocating spreading the cost to everyone, not just low-wage employers. Of course, were that to happen, many of the same actors would soon be protesting that taxes are increasing too quickly. The ACC also wants us to believe a higher minimum wage would be bad because it would push many recipients into a higher tax bracket.

Still, in fairness, the ACC's presentation to the government on the minimum wage was more balanced than of the fear mongering promoted by the more hysterical branches of the Canadian Outrage Industry, like the fine "fellows" as the Fraser Institute and its ilk.

The ACC calls for delays and more study, as well as the taxation option, rather predicting immediate fiscal apocalypse if the NDP fails to transform itself at once into a Conservative party. This may be a reflection of the membership of local Chambers of Commerce in Alberta communities, where many citizens want to give the Notley Government a chance to succeed.

Indeed, the 158 pages of comments submitted by individual members posted by the ACC contains some of the disdain for working people, especially youth, we have come to expect from some employers, but also plenty of support for a higher minimum wage.

In fact, for every Chamber member complaining that raising the minimum wage "will only increase exponentially the entitlement mentality of the youth of this province" someone else seemed to be saying it's "a good idea, it provides more income for those people that need it and will increase the income available to spend in our community" or "we support the policy shift fully."

Research by the OECD shows that the effect of minimum wage increases on adult employment is very small, and they tend to be positive for low-wage workers even if their hours are reduced as a result, as economist Andrew Jackson has reported.

Moreover, as argued on the weekend by the Alberta Federation of Labour -- which, if you think about it, has no dog in this fight, seeing as its members typically get paid well above minimum wage -- low-wage employees tend to spend their money close to home on local businesses.

And there's nothing "unprecedented" about the increase planned in Alberta, the AFL pointed out. "Ontario raised its minimum wage by 65 per cent over a shorter period in the 1970s, and the sky didn't fall… Just as importantly, the effective increase faced by most low-wage employers is much smaller than 50 per cent, because so few of them pay the current minimum of $10.20."

Opponents of the NDP are trying to portray the promises it is keeping as a dangerous social and economic experiment. In reality, under Social Credit and Conservative governments, we've been engaged in a dangerous social and economic experiment for the past 80 years, with very little but failure to show for it.

The surprising support for a meaningful increase in the minimum wage -- apparently even among many members of the Alberta Chambers of Commerce -- suggests the NDP is on the right track, economically and politically.

This post also appears on David Climenhaga's blog, AlbertaPolitics.ca.

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