Incoming Alberta premier’s $15 minimum wage pledge could set example for other provinces: economist

The Alberta NDP is sticking with an election promise to increase the province’s minimum wage, and the idea’s received a bevy of mixed reactions.

But the plan stated in NDP leader Rachel Notley’s election campaign — which over the course of three years would raise wages in Alberta from $10.20 to $15 per hour — is a positive step and done right will show other provinces that a higher minimum wage won’t cause the sky to fall, says economist Sheila Block.

“I think if we can see that kind of minimum wage increase in Alberta, then we could absolutely see it in other provinces,” Block, a senior economist with the Canadian Centre for Policy Alternatives, told Yahoo Canada News.

“It’s really an important step forward in terms of decreasing inequality in Canada…a great way to decrease inequality is to raise people up who are at the bottom,” Block said. “That’s what an increase like that to the minimum wage would do.”

Notley’s cabinet, which will be sworn in on Sunday, is expected to discuss in more detail how the government will make Alberta’s minimum wage, currently the lowest in the country, the highest provincial wage in Canada.

Not everyone is happy withe NDP’s plan. Earlier this week the Canadian Federation of Independent Businesses raised concerns with what some of the effects of a higher minimum wage could be.

Amber Ruddy, senior policy analyst with the CFIB, spoke to a number of media outlets and noted that most people earning minimum wage are in entry level positions.

“If the idea is that perhaps some people are stuck there, maybe we should be focusing on training them up and giving them more skills so they can get out of those situations, instead of forcing everyone across the board to pay a $15 minimum wage,” Ruddy told an Edmonton radio station.

Ruddy also suggested the wage increase would force small businesses in the province to cut back on creating jobs, and cut back on hours employees can work.

But Block wants to put the CFIB’s concerns to bed. She said there’s a stereotypical idea of who tends to earn minimum wage: teenagers in entry level jobs working to try and buy the latest smartphone.

“What we know from the data is that is not the case,” Block said “Somewhere between 40 and 60 per cent [of workers earning minimum wage] are adults who are working to support themselves and their families.”

Block added that academic literature overwhelmingly shows raising the minimum wage also has no conclusive negative effect on employment.

“Low wage workers spend a larger proportion of their income than higher earners, and that’s because they can’t afford to save, and they’re also more likely to spend it locally,” Block said.

“So that will have a bit of a positive impact,” she added. “We know that there aren’t the huge negative employment effects that the CFIB raises as concerns.”