Living wage higher than minimum wage: Alberta Living Wage Network

Click to play video: 'More Alberta businesses sign on to ensuring a ‘living wage’'
More Alberta businesses sign on to ensuring a ‘living wage’
A growing number of Alberta businesses are committed to providing their employees with a “living wage”. Tomasia DaSilva looks at what that means for workers and their paystubs. – Feb 15, 2022

The living wage needed to achieve a modest standard of living in Alberta is higher than the minimum wage, a new report suggests.

A living wage is a regional calculation that looks at the amount of money that a family of four (two adults working full-time with two children), and a single-parent family with one child and a single individual living alone need to earn to achieve a modest standard of living. This includes rent, transit, food, education and child care.

In a news release on Monday, the Alberta Living Wage Network said the living wage in Calgary is now $22.40 an hour, a 20.43 per cent increase from $18.60 in 2021.

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In Edmonton, the living wage is now $21.40 an hour, an 18.23 per cent increase from $18.10 last year.

Canmore’s and Fort McMurray’s living wages are $32.75 and $22.50 an hour, respectively.

Lethbridge’s living wage is now $20.30 an hour.

In comparison, the minimum wage in Alberta is $15 an hour.

“Alberta was the only province to not raise its minimum wage this year, so that gap is getting bigger and bigger,” said Meaghon Reid, executive director at Vibrant Communities Calgary.

“We see this when we go to the grocery store, and that bag of groceries costs us way more than it did last year and particularly the year before. Inflation has really put a lot of pressure on how far a dollar goes in our community and wages have not gone up relative to inflation.”

Click to play video: 'Food price increases forcing some Canadians to make tough choices'
Food price increases forcing some Canadians to make tough choices

Reid also said living wages rose this year because the government isn’t putting out policies that will help with affordability.

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“The living wage in Calgary was at $18.60 last year, which is lower than the year prior because the government put in some benefits around the child tax credit. That’s an example where governments can put in policies to make life more affordable for Albertans,” Reid said.

“This year, we haven’t seen some of the same policies that have really alleviated the pressure on people and their wallets.”

Raising minimum wage in Alberta won’t harm economy

Albertans, however, should not be expecting a minimum wage increase anytime soon.

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When asked if a minimum wage increase would be considered by the UCP, former premier Jason Kenney said that increasing employees’ pay would be too hard on businesses trying to recover from the pandemic.

Joseph Marchand, economics professor at the University of Alberta, agreed.

This is because minimum wages have increased above the equilibrium level, which leads to unemployment. There is also an excess labour supply from workers wanting to work at that wage and less employers are prepared to hire at that higher wage.

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Click to play video: 'Impact of a minimum wage increase being tied to inflation in Alberta'
Impact of a minimum wage increase being tied to inflation in Alberta

“Edmonton and Calgary have higher price levels and that’s why when you raise the minimum wage nothing happens to employment because you don’t have that bind on the wage level,” Marchand said.

“In the other regions, you’ll see a job loss because the price levels aren’t as high.”

Marchand also disagreed with the argument that raising the minimum wage will lead to inflation.

“When the NDP government raised the minimum wage by 47 per cent, it did not increase prices. There was no inflation. Inflation during one of those years between 2015 and 2018 was actually zero,” Marchand said.

“Now inflation is an issue again but it’s not going to be the minimum wage that drives it.”

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Regional minimum wage increase may be a solution

Bradley Lafortune, executive director of Public Interest Alberta, said it is very common to see differences in living and minimum wages.

According to Lafortune, the minimum wage should be a living wage for working Albertans.

“The current minimum wage is simply not enough for many Albertans who are working minimum wage jobs,” he said.

“There needs to be a provincial conversation led by the government with employers, advocates, workers and a broad cross-section of stakeholders to talk about what the minimum wage should be.

“One of the common misconceptions is it’s mostly younger people or people who are working part-time who don’t need to support themselves or people in entry-level positions, but it’s mostly women who are making minimum wage and many people are supporting families and other responsibilities.”

Click to play video: 'Grocery store staffing shortages'
Grocery store staffing shortages

But Marchand didn’t agree that a provincial minimum wage increase is the way to go. Since the living wage is calculated regionally, he argued that municipalities should have their own minimum wages.

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He referenced the Fight for $15 movement which originated in New York City and spurred other cities and districts in the U.S. to raise their minimum wages.

“There’s really nothing preventing that from happening… The living wages in Edmonton and Calgary can be higher than other economic regions and the rest of the province,” Marchand said.

“Provinces could set different minimum wages across different localities within their own province. It would still be the province dictating localized minimum wages while working with municipalities.”

Labour and immigration critic Christina Gray told 770 CHQR that the NDP is not considering regional minimum wage increases and the province needs to address issues that affect all Albertans.

“The living wage has been an important measure of how expensive life is for a long time… It’s an affordability crisis with the high inflation rate that we’re seeing,” Gray said.

“We need to make sure Alberta families are able to afford to go to the grocery store and put food on the table for their families.”

770 CHQR reached out to Premier Danielle Smith’s office for comment on the report. On Monday night, the premier’s press secretary Becca Polak issued a statement which can be viewed below in its entirety:

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“Affordability is top of mind for all Albertans. That’s why we’re taking steps to address this crisis and find solutions. In all her mandate letter to the Ministers, Premier Smith has asked that they keep the inflation and affordability crisis top of mind. Citing ‘Affordability is the primary challenge facing Albertans today, and as a government we will ensure that Alberta families are able to manage through this storm by taking decisive action in the coming weeks and months.’

Alberta’s government has already taken a number of steps to make life more affordable, including fuel tax pause, over 1.9 million Albertans are receiving monthly electricity rebates, and over 1.6 million Albertans are protected from rising natural gas prices through that rebate.

We know there is more work to do. We are working on a plan that will help save families and businesses money as costs continue to rise.

Alberta is one of the most affordable places in the country to live, work and raise your family. Albertans pay less in overall taxes with no PST, payroll tax or health premium and a low provincial income tax indexed for inflation. At this time the government of Alberta has not looked into raising the minimum wage.”

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