Increasing provincial minimum wage to $15 provides economic and moral benefits

By Kayle Van’t Klooster, September 11 2018 —

The Alberta New Democratic Party government’s increase to the provincial minimum wage towards a living wage is one of its most ambitious policies. When it was announced, the policy was met with a significant amount of skepticism from detractors claiming it would ruin the economy. Critics were vocal that it would stall economic growth in the province, eliminate jobs and hurt the workers that it was supposed to help.

Now, with the minimum set to hit $15 an hour on Oct. 1, it’s clear these qualms were unfounded. The economies of Alberta and Ontario, two provinces that have begun the process of increasing the minimum wage towards a living wage, have not suffered. In fact, these higher wages helped stimulate parts of the economy.

Since the implementation of a living wage, unemployment in Alberta has trended downward. In fact, since 2016, Statistics Canada has reported a continued increasing trend of full-time employment in the province.

Sectors like the service industry are usually more volatile during economic downturns than other sectors due to a general decrease in willingness to splurge on extraneous expenses, like going out for dinner. However, in 2017, as the minimum wage rose from $12.20 to $13.60 an hour, Alberta’s service sector added 12,400 jobs.

Disposable income is the driving force behind modern economies. Putting more money into the hands of average citizens makes it far more likely that money is reinvested into our economy and used to spur more long-term growth.

Beyond the tangible economic benefits of this policy, striving towards a living wage is also a moral good. Although the clichéd depiction of a minimum-wage worker is less than flattering — teenage, inexperienced part-time workers — that’s not the reality. Seventy-one per cent of minimum wage workers are over the age of 20 and there is a near-perfect split between full-time and part-time workers earning minimum wage. Furthermore, 40.2 per cent of all minimum wage workers are parents. Of those, 13 per cent are either single parents or their family’s sole income earner.

It is vital that the minimum wage ensures that everyone, especially the most vulnerable members of our society, is able to meet their basic needs. If we accept that a minimum wage should be well below a living wage, it creates greater pressure on the welfare state to ensure that these citizens get what they need. We create a situation where someone working full-time is still reliant on social programs to meet their basic needs. This shouldn’t be necessary. In this situation, the state is essentially subsidizing companies that pay their workers so little that they cannot get by. The burden should be on businesses to pay their workers adequately, not on the state to help boost their bottom line.

It comes down to a simple principle: if someone works a full-time job, they ought to be able to meet their basic needs. The argument that minimum-wage workers should simply get a better job is also flawed. Any job that exists in our economy should be held to the same standard. Even if some jobs are less glamorous or require less skill than others, it does not mean that we should allow these workers to live in poverty. A living wage will also make mobility out of these sorts of jobs far easier for workers as it gives greater opportunity to return to school or invest in another form of training.

Our society claims to value good, honest hard work, so why should we accept that a full-time job is not enough to get by?