Minimum Wage Hike Another Blow to Alberta Economy

Calgary – The Alberta government’s reckless plan to increase the minimum wage to $15 per hour could cost the economy at least 50,000 jobs, and will force employers to cut back on hours, re-think hiring plans, and will definitely mean less opportunity for young Albertans. As Alberta and four other provinces prepare to hike minimum wage tomorrow, new data from the Canadian Federation of Independent Business (CFIB) provides fresh insight into the misguided $15 scheme and minimum wage policies in general.

Alberta’s minimum wage will go up by a dollar to $11.20 per hour, on its way to $15 per hour by 2018. Other provinces, including Ontario, Manitoba, Saskatchewan and Newfoundland and Labrador, also have wage increases going into effect tomorrow. Almost ninety per cent of Alberta’s small businesses already pay above the minimum wage, however sectors like retail and hospitality, with razor-thin profit margins, will be hit hard by the hike.

“We have a struggling economy, a weak dollar and business confidence at an all-time low, yet the Alberta government continues to ignore the economic realities,” said Richard Truscott, CFIB vice-president for Alberta. “There are better ways to help low-income Albertans. The government should explore other avenues – like reducing taxes on low-income workers and helping them upgrade their skills – before they price employees out of jobs, and entrepreneurs out of business.”

Three papers released by CFIB correct a number of myths about minimum wage, including the mistaken perception that minimum wage earners are stuck in dead-end jobs. “A minimum wage job isn’t a life sentence,” added Truscott. “It’s a stepping stone – often the first one – in a career. Half of minimum wage earners are under 25 years old with many still living at home, and 47 per cent have been in the job for less than a year.”

The myth-busting also extends to employers. Despite some suggesting employers are wealthy and can afford to pay more, Statistics Canada data shows that for every Canadian employer that earns more than $250,000, there are five who earn less than $40,000 – less than the average teacher’s salary.

“We’re not talking about billion-dollar multi-nationals that can absorb the cost. This is about your local hardware store and your favourite restaurant,” said Amber Ruddy, CFIB director of provincial affairs for Alberta. “This is about your florist your local grocer and your hair dresser. These are the kinds of people who will be hurt by a $15 minimum wage.”

“It’s time the Alberta government start listening to province’s job creators and look for more practical and effective ways to help low-income earners,” said Truscott.

CFIB is Canada’s largest association of small- and medium-sized businesses with 109,000 members across every sector and region.