Alberta's $15 minimum wage: How many will actually get a raise?
Hardly anyone in Alberta earns minimum wage now, but that will change
Alberta is the home of high wages as residents earn around 25 per cent more than the average Canadian. Even among young people, between the ages of 15 and 24, the average wage is $18 per hour.
The province is also home to the second lowest minimum wage in the country at $10.20 per hour.
However, hardly anyone earns that amount in Alberta. As of last year, less than two per cent of the population made the minimum wage, as compared to seven per cent nationally.
Teenagers are the most exposed.- author David Green
That's about to change though as Rachel Notley's NDP government moves ahead with its plan to bring the minimum wage up to $15 per hour in the space of three years. Small business are upset and economists are curious about just what will happen to the labour market with this experiment.
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"It's something that I don't know the answer to," said David Green, an economist with the University of British Columbia and author of the book The Case for Raising the Minimum Wage. "There is no research that I know of on the employment effects of staging a minimum wage change in faster or slower."
10% earn $10-$15 per hour
According to numbers from Statistics Canada, roughly 10.5 per cent of Albertans make between $10 and $15 per hour. If you add it to the two per cent who earn the minimum, we're talking nearly 300,000 Albertans who will see their wages go up.
But not all of those will see a $5 per hour increase, only around 40,000 earn $10.20 an hour. The other 250,000 earn somewhere between $10 and $15 per hour. The impact on Alberta is smaller than it would be on other provinces with more low wage earners.
Of course, no one disputes that some of those people will lose their jobs.
The Canadian Federation of Independent Business suggests that between 53,500 and 195,000 Albertans will lose their jobs, but Green says the numbers aren't clear.
Teenagers most at risk of losing their jobs
"It matters a lot based on the age structure," said Green. "For teenagers, the standard estimate is that if you increase the minimum wage by 10 per cent, employment will decrease by 2.5 per cent."
Around 35 per cent of minimum wage earners in Alberta are under the age of 19. Many of those have not finished high school yet and are working in food service or retail.
Green says older workers are not as vulnerable.
"Teenagers are the most exposed, and also don't forget they're often in jobs that aren't given a lot of responsibility. They're the most disposable."
Of course that data is based on a 10 per cent increase in the minimum wage, not a 50 per cent increase. No one is sure how that will unfold.
"Most people think if they did it tomorrow, say if they walked in and said 'as of today, the minimum wage is $15,' there would be a bunch of layoffs right out of the gate," said Green. "And then readjustment back toward employment rate back where you started. But if you stage it in over time, does it change the total impact on the employment rate?"
Green says to expect some layoffs, but also more demand for other types of workers as companies adjust. He also says that businesses will tend to make investments to automate some jobs and raise prices.
"There's no free lunch," said Green. "Someone has to pay these extra costs somewhere."