Calgary

Alberta's minimum wage earners rejoice over raise, but worry about long-term impacts

The minimum wage goes up a dollar today to $11.20, moving Alberta up from the bottom to the third highest in the country. It's a welcome increase for workers, but some businesses worry whether their bottom line can take it.

Some worry they may be putting their livelihoods out of business

Server Wayne Doucet, left, and restaurateur David Lam see the minimum wage increase from two different sides, although they both worry whether their business can continue to absorb the increases. (Colleen Underwood/CBC)

Wayne Doucet has a lot of reasons to celebrate these days.

He's about to bring his wife over from Vietnam and working at his friend's restaurant, Watercress Express, after an unsuccessful search for work in his plumbing field — and he just got a 70 cents per hour raise.

"It means I get paid more, I can afford things," said Doucet. " During this recession ... I have a job to put food and a roof over my family."

But he hesitates when he talks about how the raise, and other ones on the way as Alberta moves to a $15 minimum wage. Doucet wonders how it will impact his employer.

"I do care for the business because he's my close friend. I want this business to exceed in all means of perspective." 

And, friendship aside, success ensures Doucet still has a job.

Too much, too fast?

At $10.20 per hour, Alberta was tied with Saskatchewan for the lowest minimum wage in the country. Now that it's been bumped up to $11.20 per hour, it's the third highest. 

But it doesn't stop there. Rachel Notley's NDP Government plans to raise it to $15 per hour over the next three years. 

And its that long-term hike that has small businesses concerned, according to Amber Ruddy with the Canadian Federation of Independent Business (CFIB).

"Business owners have been telling us it could result in them closing their doors, or it could result in the reduction of current staffing levels. The consequences are quite severe," said Ruddy.

The CFIB wants province to monitor the effect of this initial increase before it announces anymore. It would also like to see the increases phased in over a longer period of time.

Business can absorb the shock

On the flip side, the Calgary District Labour Council applauds the provincial government because it brings Alberta closer to a living wage model.

Spokesperson Alex Shevalier says he looks to what happened in British Columbia when it raised its minimum wage from $8 to $10.25 per hour a few years ago as proof it won't put people out of business or lead to huge job losses.

"The CFIB predicted that B.C. would lose up to 800,000 jobs by increasing minimum wage 27 per cent, but in fact the opposite thing happened."

He says the unemployment rate dropped slightly. 

"I think businesses are able to absorb the shock because its gradual and slow," said Shevalier. "They'll simply either reorganize or increase price to deal with that pressure."

Consumers will pay

That's exactly what the owner of Watercress Express plans to do.

"Well I guess I have to bring up the price more, right?" said David Lam.

But he says that's not the easiest thing to do when he's already fighting for customers in a competitive industry and a slowed economy.

With the minimum wage expected to continue to climb, he wonders just how much his customers will be willing to absorb.

"That's what I am afraid of too," said Lam.

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