Sept. 29, 2017 "Higher minimum wage alone won't reduce poverty in Alberta": Today I found this article by Greg Clark in the Edmonton Journal:
It will come as no surprise when I say Alberta politics is sharply divided. Nowhere does this seem to be more evident than the minimum-wage debate. Depending on which side you take, you’re either with small business or you care about people just struggling to get by.
What if you care about both?
This issue captures the problem with politics today; one side wins, and the other side loses.
I think there’s a better way.
Tackling poverty is the right problem, but minimum wage alone is the wrong tool. There’s growing evidence sharply higher minimum wages hurt more than they help, which is why I called for the NDP to pause minimum wage after the next increase on Oct. 1 and study the impacts of the 30-per-cent increase to date.
At $13.60, Alberta’s minimum wage will be the highest in Canada. At the same time, pausing the increases at this point allows the NDP to say they’ve helped people at the lower end of the income scale, but also to take the time to evaluate the impact on small business, the not-for-profit sector and the workers themselves.
If people are losing their jobs to automation or more skilled workers at higher minimum wages, are things better or worse?
We’ve already seen the impact of higher labour costs (and the many other costs the NDP have imposed) on small business. If you’ve eaten out lately you’ll notice that restaurant prices seem higher; they are. Prices in Alberta have risen at twice the rate of overall food costs, and the spike in minimum wage could spell the end of many small businesses struggling to stay afloat. That means fewer jobs, not more.
To date, the NDP have rolled out a haphazard series of programs to address various aspects of poverty. Some of them I think are effective (the Alberta Child Benefit comes to mind) because they’re income-tested and targeted at the people who really need help.
One of the criticisms of sharply higher minimum wages is that they’re a blunt instrument. The 15-year-old living at home working a part-time job hoping to earn some spending money and learn what it means to hold down a job doesn’t need the same supports as a single parent trying to feed kids and keep a roof over their head.
The government’s own data shows that only 10 per cent of people earning minimum wage are single parents supporting a family.
Simply put, most people earning minimum wage aren’t poor. The goal should be to use the best policy tools to help those who are.
Unfortunately, there’s growing evidence that both of these groups could be hurt by the NDP’s very rapid increase to minimum wage (which goes from $12.20 today to $15 in October 2018). The C.D. Howe Institute suggests up to 25,000 jobs would be lost in Alberta, and a similar study by the Ontario legislature’s independent Financial Accountability Office showed that province could lose 50,000 jobs or more.
So what’s the answer?
Surprisingly, the NDP still don’t have a provincial poverty-reduction strategy. Although some cities in Alberta have developed their own poverty plans, a provincial plan would link these efforts and ensure programs are coordinated, efficient and effective.
It should look at improved
educational opportunities,
food security,
mental health,
financial literacy,
housing,
early childhood education
and targeted income supports,
all of which are proven to better address poverty than a minimum wage alone.
The goal of government shouldn’t be to find political wedge issues, it should be to give people the right tools to raise themselves out of poverty wherever possible.
And to ensure those whose circumstances prevent them from doing so are looked after.
If poverty reduction is the goal, and it certainly should be, rapid increases to minimum wage won’t get us there. We need a better plan.
Greg Clark is leader of the Alberta Party.
Sept. 27, 2017 "Minimum wage hike could cost 25,000 jobs: study": Today I found this article by Gordon Kent in the Edmonton Journal:
The NDP plan to boost the province’s minimum wage to $15 an hour next year could lead to the loss of 25,000 jobs, according to new study by a University of Alberta economist.
The hourly minimum wage is set to rise to $13.60 Sunday from $12.20 before reaching the final figure Oct. 1, 2018, but in a commentary published by the C.D. Howe Institute, Joseph Marchand said these moves could hurt low-wage staff by reducing employment.
“I worked a ton of jobs before I went to college. I think that experience helped me,” he said in an interview Tuesday.
“If we keep on raising the minimum wage, and not having a minimum wage specifically for young workers, then those jobs won’t exist.”
The minimum wage was $10.20 an hour in 2015.
Several other North American jurisdictions, including Ontario, New York and California, have made the $15 per hour minimum wage a goal, but Alberta is achieving it more quickly than elsewhere.
Marchand found that from April 2015, just before the NDP was elected, to April 2017, the number of employed Albertans aged 15 to 24 dropped by 27,700, although he said most of that decrease was probably the result of the crash in oil prices.
Although he would like the upcoming wage hikes postponed until the economy improves — or at least introduced first in Edmonton and Calgary, which can more easily absorb the effects, and later spread to smaller centres — he said the current policy is set in stone.
“Let’s hope for the next energy boom … Any kind of stimulation in labour demand in the province will either mitigate those losses, or make them completely go away. The economy will hopefully bail us out.”
The Alberta Party wants the province to keep the minimum wage at $13.60 while the government creates a comprehensive poverty reduction strategy, while United Conservative Party MLA Prab Gill called for a delay in this weekend’s wage increase so the employment impact can be examined.
“We want our workers to have a good life, especially entry-level positions … The notion is this (higher minimum) is going to improve poverty and everything, but the report suggests it’s not going to,” Gill said.
“If this increase is going to give us a 25,000 job loss, we should go back to the drawing board. It’s going to hurt those people unintentionally.”
But Labour Minister Christina Gray said in an emailed statement the province has an “unwavering” commitment to reach a $15-an-hour minimum wage by 2018, adding that everyone who works hard in Alberta should be able to feed themselves and their families.
“I’ve heard from too many people over the last two years who’ve shared with me their struggles of having to work multiple, full-time minimum-wage jobs and still have difficulties making ends meet,” her statement said.
“These same workers have shared with me that these small increases to minimum wage are having a significant positive impact on their lives and are making things just a little easier for their families at the end of the month.”
Joel French, executive director of Public Interest Alberta, said North American research on the employment impact of raising minimum wages is divided, with much of it showing there’s no effect.
“What is undeniable is that more money in the pockets of low-wage earners actually leads to higher consumer spending … We know that is a very positive thing,” he said.
“We also know these low-wage workers who are getting pay increases are the ones who need it the most.”
French would like Alberta’s minimum rate boosted faster, saying the living wage in big centres such as Edmonton, Calgary and Fort McMurray is more than $15 an hour, although it’s lower in Lethbridge and Medicine Hat.
“It still puts money in the pockets of people who most need it.”
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