Minimum wage hike sees mixed reactions

Time will tell how the province's decision plays out

 

The minimum wage increase has gotten mixed reactions since being first introduced by the NDP last year. Depending who you talk to, some say this is a positive step for Albertans who make minimum wage now, while others say it will hurt business and consumers who will ultimately pay the price for the hike.

Last week, the province mapped out the next steps toward a $15 minimum wage by 2018 following several weeks of consultation. The increases to minimum wage will move nearly 300,000 Albertans closer to earning a living wage for their families and provide certainty to businesses.

Alberta’s general minimum wage will rise $1 to $12.20 per hour and the current liquor server rate will be removed, effective Oct. 1st. Weekly and monthly minimum wages used by certain professions will rise to $486 and $2,316, respectively, at the same time.

Minimum wage will rise a further $1.40, to $13.60 per hour, on Oct. 1st, 2017, and by $1.40, to $15 per hour, on Oct. 1st, 2018. Weekly and monthly rates will rise by equivalent amounts.

Some business owners say the wage increase is a good thing resulting in higher wages, longer staff retention, reduction of training costs, improvement of staff morale which all benefits customers and colleagues.

“Albertans who work full time should be able to live with dignity, and that means being able to afford rent, food and transportation for their families. This plan for Alberta’s minimum wage provides long-term certainty to employers and workers,” said Christina Gray, minister of Alberta Labour.

However, not all opinions are positive. Alberta Liberal Leader David Swann called on the government to listen to the concerns of business owners and recognize that timing and scale of change are important for both business solvency and employment.

Swann said the minimum wage increase comes not only in a serious recession with higher taxes, but also in the wake of an increase in Canadian Pension Plan premiums that was agreed to on June 20th. With many small businesses already struggling with the economic downturn, a dramatic increase in the minimum wage could be the end of a dream for many entrepreneurs, he added.

“Despite all its consultations, this government is clearly not attuned to the needs of business owners,” said Swann. “Either they’re simply refusing to listen to what businesses have to say, or they’re too ideologically driven to acknowledge the timing of their plan needs to be reconsidered; either way, they are not paying attention to the reality of the business climate today.

“I urge the government to take its head out of the sand and recognize the concerns of those that will be negatively affected by their policy,” Swann concluded. “This one-sided, top-down approach to the issue threatens to do more harm than good.”

The Alberta Chambers of Commerce said the announcement is cause for concern.

“We’re disappointed that the impacts to small and medium-sized employers and their employees, in our opinion, have not been considered and we’re worried about the unintended consequences as costs continue to layer on businesses. Quite frankly, we are very concerned for the health of small and medium-sized businesses going forward,” say’s Ken Kobly, ACC President & CEO. “This isn’t about fear-mongering, this is us communicating our members’ experiences and what they see as their options and the challenges for their employees going forward.”

Fourteen months after making an election promise to increase the minimum wage at the current pace, details of what continued increases will mean for minimum wage earners and employers have not been disclosed in relation to the current economic reality the province finds itself in, he said.

“The Government of Alberta has ignored how these increases will affect minimum wage earners and their access to income tested supports such as GST, Canadian Child Tax Benefit and the Working Income Tax Benefit. Ignoring these programs will mean that the Government of Canada will benefit from clawing back a portion of these income-tested benefits.”

Only time with tell how this will affect both business and workers in the long run.