Tuesday, September 22, 2015

Low-wage work in Alberta

My colleague Jason Foster wrote an interesting piece for Vue Weekly about the likely impact of Alberta’s plan to increase the minimum wage to $15 over the next few years.

This announcement--which was part of the New Democrat's election platform--has caused the usual “the end is nigh” response from business lobby groups:
The arguments dominating the headlines centre around job loss: the Canadian Federation of Independent Business (CFIB) claims the increase will cause a loss of 50 290 to 183 300 jobs in Alberta. This number is simply too large to be credible: at the upper end, they are suggesting that one in every 12 jobs in Alberta would disappear if the minimum wage increased.
After debunking this myth, Jason goes on to look a bit more deeply into the effect of low minimum wages:
We are told that wages are a measure of a job’s worth and required skill set. If that were always true, I suspect child care workers would be making significantly more than they do. The reality is that low-wage employment—encouraged by low minimum wages—is a subsidy for employers to keep the cost of business low. It is driven in part by consumers’ desire for low prices, but it also helps keep marginal enterprises afloat that might otherwise fail.
Shortly thereafter, Public Interest Alberta released some new stats about low-wage work in Alberta based on StatCan data. This data indicates that 18.9% of Alberta earn below $15 an hour and 6.1% earn between $9.20 and $11.20. Most of these workers (62.3%) are women and 78.8% are over age 20. The short of it is that low-wage work is not concentrated among teens and also disproportionately affects women.

-- Bob Barnetson

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