“Discriminating on the basis of age is inherently unfair. Perhaps, a better way would be to look at the productivity of the employee.”
Alberta’s minimum wage now leads the West
Alberta took its first step toward a $15 minimum wage by 2018 when it raised the rate by a dollar to $11.20 in October 2015. That makes the province’s rate the highest in the West, and among the highest overall in Canada. Saskatchewan and Manitoba also raised their minimum wages in 2015, to $10.50 and $11, respectively. B.C.’s minimum wage earners receive $10.45 an hour.
Roughly 38,600 Albertans – 2.2 per cent of employees – earn minimum wage, the lowest percentage in Canada. However, close to 370,000 people earn $15 per hour or less and they too will be looking for an increase. Another important way to look at how Alberta compares to other provinces is the ratio of minimum wage to the average hourly wage. According to our analysis, Alberta’s minimum wage has historically been lower than the other western provinces. With the Oct. 1 increase, that ratio is the highest it’s ever been at 39 per cent, but still lower than the rest of the West.
It’ll likely get more difficult from here
Some business groups have protested the Alberta government’s move to start hiking the minimum wage toward its eventual goal of $15 an hour, saying the plan was rushed, ill-conceived and will have a huge impact on their bottom line. The initial $1 raise in October was welcomed by employees, while businesses seemed to absorb the costs without undue pain. However, the move to $15 an hour by 2018 equals close to a 50 per cent increase over three years, so the next increases may not be swallowed as easily. The province conceded “significant job loss is one realistic possibility” from the wage hike, according to an internal memo obtained by the Canadian Federation of Independent Business through a freedom of information request. Meanwhile, businesses in tourist towns Banff and Lake Louise are asking the government to put the increases on hold in response to the dramatic economic downturn in Alberta from low oil prices.
A spokesman for Premier Rachel Notley, meanwhile, said while the government intends to move ahead with its minimum wage changes, given the continued economic slump in Alberta, it will review the data before making final decisions.
Teenagers may bear the brunt
Another concern voiced by businesses is that as wages start climbing higher and employers look for ways to absorb the extra costs, younger staff may feel the most pain. Often, when minimum wages increase, the number of young teens being hired decreases. Teenagers on their first jobs still have plenty to learn about the basics of work, such as punctuality, teamwork, and pleasant customer service. A 20-year-old who has been on the job longer and already mastered those early skills and is willing to work at $15/hour, meanwhile, is almost certain to get a leg up when it comes to hiring.
A better way toward a true ‘living wage’
Britain recently imposed a system incorporating both “minimum” and “living wages,” based on age. Starting in April 2016, people under 25 will receive minimum wages, while those 25 and over must be paid at least the new living wage. Minimum wages range from £3.87 ($8) for people under 18, up to £6.70 for people over 21. That means workers 25 and older will earn at least a living wage of £7.20 an hour, a figure that will rise to more than £9 by 2020.
Discriminating on the basis of age is inherently unfair. Perhaps, a better way would be to look at the productivity of the employee. Because new, untrained employees are less productive, some employers in Britain say that they would rather pay less to people who are in training. Alberta should look at allowing employers who have training programs for young workers, or others just entering the workforce, to pay trainees less than the higher minimum wage until they complete their training.