Economists dispute report suggesting Alberta minimum wage hike will cost 25K jobs

Will Alberta lose 25,000 jobs as a result of a $15 an hour minimum wage hike? Some argue the numbers don’t add up.

Alberta economist and University of Alberta associate professor of economics Joseph Marchand recently published a report with the C.D. Howe Institute. According to his research, Alberta’s move to raise the minimum wage to $15 an hour by 2018 could lead to the loss of roughly 25,000 jobs.

“That’s a lot of jobs,” Marchand said. “If you look at individuals geographically between the 15 to 24 age group, they’ve already lost 27,000 jobs over the last two years since the policy was implemented.”

But others are debunking the numbers in the report titled Thinking about Minimum Wage Increases in Alberta: Theoretically, Empirically, and Regionally. 

“While I’d say the 25,000 job loss number is modest and not completely without merit,” said Trevor Tombe, “I think based on the evidence that they used, that number would be about 15,000.”

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READ MORE: Reality check: Is a $15 minimum wage bad for the economy?

Tombe, also an associate professor of economics but at the University of Calgary, came up with the 15,000 number by factoring in inflation, which he said accounted for 5,000 jobs. He also said when you factor in how many minimum wage jobs are held by teens, not by workers in the 20 to 24 age group, the number goes down by another 5,000.

Global News reached out again to Marchand, who is sticking by his numbers, adding others are missing the real point of the study.

“It could be roughly 15,000, 20,000, 25,000, etc. The point is that it is not likely to be a gain in jobs on one end or 100,000 job loss on the other end.”

In response, Tombe said he’s not missing any point, simply correcting the 25,000 estimate, again based on the evidence used.

Whatever the numbers, many agree businesses are going to face some tough choices, which include increasing prices, cutting jobs, or cutting back hours.

Marchand is proposing the $15 an hour pay bump be delayed until the Alberta economy improves, adding the magnitude and timing of the wage hikes don’t make sense.

 “I think both of these are rather drastic –  large increases in a short time span and in a bad economy.”

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Alberta’s minimum wage will go up to $13.60 on Sunday, Oct. 1.

The proposed $15 minimum wage will go into effect in October 2018.