Ralph Klein has gone and it is time to retire Ralph's World. Thanks to all of you who have supported this venture by contributing material and through your comments. It has been fun.

Should we get another blog underway? Let me know your thoughts by e-mailing me at johnnyslow@gmail.com.

John Slow
January 1, 2007

Wednesday, January 21, 2004

Minimum Wage Workers Shut Out of The Alberta Advantage 

Dear Premier Klein,

With your recent announcement that our province was in a net debt-free position and with Statistics Canada reporting that, as of March 31, 2003, Alberta was the only province in Canada in a net-worth per capita financial position of $2,942, how can your government justify refusing to increase the minimum wage, one of the lowest at $5.90 an hour, which rate has been in effect since October 1, 1999? Factoring in the erosion of this minimum rate in the past four years, the purchasing power of this rate has dropped at least 15%.

The Alberta Advantage enjoyed by the business community indeed can support a reasonable minimum wage so workers would not have to rely on a government-supported dole for financial assistance to even maintain a basic minimum standard of living.

The Organization for Economic Co-operation and Development, of which Canada is a member, has shown in its studies and research that minimum wages at reasonable levels counter poverty and inequity with little impact on adult employment. The Scandinavian countries and the Netherlands also have shown that higher minimum wages did not cost the poor their jobs and that it was possible to have both high employment and a high wage floor enjoyed by workers, thus eliminating the need for government support programs to assist such workers and their families.

In September of 1999, the Canadian Centre For Policy Alternatives of
Vancouver B.C. conducted a study and I would like to share some of its findings with you and your caucus members, Mr. Premier, involving the minimum wage question in B.C., Ontario, Quebec and Alberta. You can read this report online by clicking here.

1. Minimum wage workers are primarily adults and women.
A popular misconception is that the majority of minimum wage workers are teenagers living at home in middle class families. This was found not to be the case as 61% were found to be adults, 19 years of age or over, and 64% were women. Minimum wage work is also an important income for many students seeking to finance post-secondary education. The vast majority of teenage minimum-wage workers, over half of the young minimum-wage workers, and 12% of adult minimum wage workers were full time students at some time during the year.

2. Minimum Wage Disproportionately Benefits Low-Income Families.
The evidence clearly showed that minimum wage earners were disproportionately represented among families with low-incomes. Thus, increases in the minimum wage will disproportionately benefit low-income families.

3. Real Minimum Wages Have Fallen.
The real value of minimum wages (after inflation) in the four provinces studied has fallen dramatically from its peak in the mid-1970s. Minimum wage increases in the l1990s in British Columbia, Ontario and Quebec have provided some restoration to the purchasing power of the minimum wage, while Alberta remains far behind the other provinces.

4. Increasing the Minimum Wage Has Only a Marginal Effect on Employment.
In-depth analysis clearly disputes that minimum wages are a major "killer of jobs". Over the past two decades, large increases in the minimum wages where they occurred have been followed by both increases and decreases in employment, demonstrating that other trends in the economy influence employment levels to a much greater extent than do minimum wages. Studies looking at employment effect of minimum changes typically find very small negative or even positive impacts. Economics regression analysis conducted by The Canadian Centre for Policy Alternatives in full, found that a 10% increase in the minimum wage produces declines in the employment -to-population ratio in the range of 0 to 2 percent depending on the age and gender group. This is generally interpreted as a very small disemployment factor (and does not necessarily imply actual layoffs).

5. Increasing the Minimum Wage Increases the Total Wages of Low-income Workers.
Even in taking into account "worse case scenarios" disemployment effects, an increase in the minimum wage generates an increase in the total money (the wage bill) going to low-wage workers (and this holds true for all age and gender groups). Even given the conservative assumptions, increasing the minimum wage from $6 to $7 an hour was estimated to generate an estimate 7% increase in total wages of low-wage earners.

6. Minimum Wages Should be set at the Poverty Level.
The minimum wage is an important tool in raising the floor for low-income workers. Together with other policy instruments (such as Employment Insurance, child tax benefits, social assistance and job creation initiatives) increasing the minimum wage will help in the battle against poverty and excessive inequality that exists today.

Mr. Premier, your government needs clear criteria in setting the minimum wage, so that both workers and businesses know the rules and can plan increases. The minimum wage should be high enough in our province to ensure that individuals working full time not find themselves in poverty. Legislation should also be enacted so that the minimum wage would be indexed to prevent further erosion by inflation.

It is interesting to note that strong support from mayors, councilors and aldermen attending the annual convention of The Alberta Urban Municipalities Association last fall resulted in a resolution being passed encouraging your government to increase the minimum wage with consideration in the $6.95 an hour level. This support from elected officials from our cities and towns representing over 85% of Alberta's population in whose jurisdictions over 85% of Alberta's businesses operate, should be justification in itself for your government to not only increase the minimum wage to a reasonable level but to also legislate indexing to keep pace with inflationary rises in our province.

Raising the minimum wage to a reasonable level would 'make work pay' and also leave more government resources to allow for more generous income supports for lower-income families with children, persons with disabilities and so on.

Mr. Premier, will your government take the necessary steps to correct this inequity affecting low-income Albertans who should also be able to realize a reasonable standard of living which most other Albertans enjoy under the Alberta Advantage?

Mr. Premier, this letter, along with your response will be published on the Ralph's World website. I trust you will indicate your government's intent to correct this inequitable situation. It will be appreciated and looked for by those affected and concerned Albertans.

Michael Marlowe

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