Calgary

Calgary economist calls minimum wage hike 'modest change' affecting few workers

A Calgary-based economist says raising the minimum wage isn't going to have a major impact on Alberta's economy despite rhetoric to the contrary after Thursday’s announcement it was proceeding.

Move has been called too much at the wrong time by industry groups, lobbyists and Wildrose party

Trevor Tombe says the effects on the economy will be modest 0:47

A Calgary-based economist says raising the minimum wage isn't going to have a major impact on Alberta's economy despite rhetoric to the contrary after Thursday's announcement it was proceeding.

The move has been called too much at the wrong time by industry groups, lobbyists and the Wildrose party.

Trevor Tombe, an assistant professor of economics at the University of Calgary, says the reaction is a bit overblown.

"It shouldn't be thought of any kind of magic bullet to alleviate all inequality and poverty concerns. It shouldn't be thought of as something that's going to devastate Alberta's economy," Tombe said.

"The truth is very much between those two extremes. It's a modest change that affects a relatively small number of workers."

A Calgary economist says the graduated increase in Alberta's minimum wage will have modest effects on the economy as a whole. (Andrew Brown/CBC)

The increase is graduated. Currently it is $11.20 for most employees and $10.70 for workers who serve alcohol.

By Oct. 1, 2016, the rate increases to $12.20 an hour and the server rate is eliminated.

It increases to $13.60 on Oct. 1, 2017, and hits $15 by Oct. 1, 2018.

Modest change to economy

Tombe says it will affect some workers possibly leading to layoffs, but they will be modest.

"It provides higher wages, so higher incomes to people who have low wages and therefore low incomes," he said.

"But there are also off-setting effects to consider. So there might be job losses particularly for young workers, teenagers in particular and lower skilled workers potentially as well."

Wildrose leader Brian Jean said the increase comes at the worst time for the Alberta economy when thousands are losing their jobs.

According to Statistics Canada, the net Alberta job loss in May was 24,000 jobs.

"Combined with a series of other tax increases, this aggressive timeline comes at the wrong time as our economy continues to suffer," Jean said in a news release.

Interim Progressive Conservative leader Ric McIver called on the NDP to "hit the brakes" on the increases.

With files from Michelle Bellefontaine

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