On April 1, Alberta’s minimum wage increased from $8 to $8.40 per hour. In June 2007 the Alberta government announced the increase to minimum wage would be based on the average weekly wage index. The index is based on Statistics Canada’s annual survey of employment, payroll and hours.
Ponoka-Lacombe MLA Ray Prins thinks that the increase is a positive move.
“I think it is a good move. It is keeping up with the general inflation with rates over the province. We have tied it to the average weekly wage index so this is a good move for people on minimum wage,” said Prins. “All jobs have a value according to supply and demand and the minimum wage is basically a starting wage for young people or low skill people or part-time jobs.”
Michelle Stirling, job search advisor for Ponoka Employment Services, a sub-contractor to Alberta employment and immigration thought it was a step forward. However, she thinks that the cost of living in most centres is much higher than this incremental raise.
“For the employer any change in the wage ratio has an impact on their margins so even though employees would like and need a higher raise employers always have to struggle with the consequences, especially smaller business,” said Stirling.
With the current increase Alberta’s minimum wage remains the highest in Canada after taxes. Before taxes, Alberta will have the third highest minimum wage among provinces behind Ontario ($8.75) and Manitoba ($8.50).
“I’d say most people are paying above that anyway it is such a volatile economy right now. I suspect we are going to see rises in things such as food with the rising prices of oil world wide,” said Stirling. “So these types of increases will always be a bit behind because they are legislated and there is a whole process involved with a wage change and it takes time.”
The Canadian Federation of Independent Business Alberta director Danielle Smith had a few problems with the increase. She thought that there was a lack of consultation with businesses and that businesses were not given enough time to adjust to the new announcement. In June 2007, the increase was announced, it increased from $7 to $8 on Sept. 1, 2007 and went from $8 to $8.40 on April 1, which was announced on March 18.
Prins said that in the future the notice will not be a problem.
“Industry now knows that minimum wage will be connected to the average minimum wage index and from time to time there may be an increase, if this goes down the minimum wage will not go down,” said Prins.
Smith says that most of the employers have had to increase wages and that very few people are currently making minimum wage. Those who are making minimum wage are in the hospitality industry and low skill workers. She also feels that the new increase will have a large impact on all employers.
“When minimum wage goes up it causes wage inflation because somebody who is currently making $8.40 an hour they now want an increase as well,” said Smith. “There are lots of occupations where they try to keep a certain differential, you can see this bump up a wage scale of a variety of contracts. It has a much broader effect on the overall cost of the salaries that are being paid to workers.” The CFIB’s annual Help Wanted report showed that 6.3 per cent of jobs in Alberta firms went unfilled for at least four months in 2007, the same as in 2006. They estimate that is the equivalent of 54,000 jobs.
Prins hopes that the wage increase will help the work shortage.
“In general it is a move in the right direction for people on minimum wage. The whole shortage of labour in Alberta is a problem for employers right across the board hopefully this will help a little bit to attract some workers into the work force.”
The Alberta Federation of Labour approved of the increase but president Gil McGowan said it was not enough.
“We estimate that a living wage right now in the province would have to be at least $10 per hour. What the government needs is a minimum wage that actually reflects the high cost of living in Alberta,” said McGowan in a press release. “A minimum wage, after all should prevent full-time workers from living below the poverty line.”
The 2007 Alberta Wage and Salary Survey was commissioned by the governments of Alberta and Canada to provide information on wages and salaries for full and part-time employers by occupation, region and industry. Nearly 3,000 employers participated in the survey covering more than 400 different occupations and representing almost 200,000 full and part-time employees.
The survey found that Alberta’s average wage rate was $23.90 per hour. Cashiers in Alberta were on average making $9.63, administrative clerks made $19.23, oil and gas workers $30.12 and managers in health care made $34.49.
In the Red Deer region food and beverage servers made $8.59 compared to the provincial average of $8.78. Truck drivers in the Red Deer region made $18.91 compared to the provincial average of $24.71. Accountants in the Red Deer region made $41.85 compared to the provincial average of $25.66.