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 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 must earn to achieve a modest standard of living. This includes rent, transport, food, education and childcare.
In a news release Monday, the Alberta Living Wage Network said the living wage in Calgary is now $22.40 an hour, a 20.43 percent 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 and Fort McMurray’s living wage is $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 that didn’t raise its minimum wage this year, so that gap is getting bigger and bigger,” said Meaghon Reid, executive director of Vibrant Communities Calgary.
“We see it when we go to the grocery store, and that bag of groceries costs us much more than last year and especially the year before. Inflation has really put a lot of pressure on how far a dollar goes in our community and wages have not risen relative to inflation.”
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Reid also said the living wage has risen this year because the government is not bringing out policies that will help with affordability.
“The living wage in Calgary was $18.60 last year, which is lower than the year before because the government put in some benefits around the child tax credit. This is an example where governments can introduce policies to make life more affordable for Albertans,” said Reid.
“This year we haven’t seen the same policy that really eased the pressure on people and their wallets.”
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Raising Alberta’s minimum wage will not hurt the economy
However, Albertans should not expect a minimum wage increase anytime soon.
When asked if a minimum wage increase would be considered by the UCP, former premier Jason Kenney said that increasing workers’ pay would be too difficult for businesses trying to recover from the pandemic.
But University of Alberta economics professor Joseph Marchand disagreed.
What impact could a minimum wage increase have in Alberta?
While municipalities with lower price levels face a labor shortage if the minimum wage is increased, more expensive economic regions such as Calgary and Edmonton will not see a change in employment levels.
This is because people from lower-priced economic regions will emigrate to Calgary and Edmonton for better job opportunities, while those already in the cities will stay in their positions or take similar positions closer to them. This means there are fewer open positions and more competition, which benefits employers.
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Impact of an inflation-linked minimum wage increase 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 binding on the wage level,” Marchand said.
“In the other regions, you will see job losses because the price levels are not as high.”
Marchand also disagreed with the argument that raising the minimum wage would lead to inflation.
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“When the NDP government increased the minimum wage by 47 percent, it did not increase prices. There was no inflation. Inflation 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.”
Regional minimum wage increase might 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 do minimum wage work,” he said.
“There should 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 working part-time who don’t need to support themselves or people in entry-level positions, but it’s mostly women earning minimum wage and many people support families and other responsibilities.”
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But Marchand disagreed that a provincial minimum wage increase was the way to go. As the living wage is calculated regionally, he argued that municipalities should be able to dictate their minimum wages.
He referred to the Fight for $15 movement that originated in New York City and urged other cities and districts in the US to raise their minimum wages.
“There’s really nothing preventing that from happening … The living wage in Edmonton and Calgary could be higher than other economic regions and the rest of the province,” Marchand said.
“Provinces can set different minimum wages across different locations in their own province. It will still be the province dictating localized minimum wages while working with municipalities.”
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Labor and immigration critic Christina Gray told 770 CHQR that the NDP is considering local minimum wage increases, but the province must first 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 rate of inflation we’re seeing,” Gray said.
“We need to make sure Alberta families can afford to go to the grocery store and put food on the table for their families.”
770 CHQR has reached out to Premier Danielle Smith’s office for comment on the report. On Monday evening, the Prime Minister’s Press Secretary Becca Polak issued a statement, which can be seen in its entirety below:
“Affordability is the most important thing for all Albertans. That is why we are taking steps to address this crisis and find solutions. In all her mandate letter to the ministers, Prime Minister Smith asked that they keep the inflation and affordability crisis in mind. Referring to ‘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 breaks, more than 1.9 million Albertans receive monthly electricity rebates, and more than 1.6 million Albertans are protected from rising natural gas prices by that rebate.
We know there is more work to do. We are working on a plan that will help families and businesses save 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 point, the Alberta government has not looked at raising the minimum wage.”