Vibrant Communities Calgary

re: “Increasing the minimum wage won’t help Alberta’s poor” - The Calgary Herald

In addition to the guests who submitted their own replies to the Herald’s September 10th editorial, VCC sent our own response to the Editor of the Calgary Herald. See the full letter below.

September 12, 2012
Letter to the editor, Calgary Herald
Re: Increasing the minimum wage won’t help Alberta’s poor, Calgary Herald, September 10, 2012

We applaud the editorial board of the Herald for joining the conversation about ending poverty in Alberta. It’s important to note that we are trying to eliminate poverty, not to “ease the plight of the poor” since we think that Alberta can do better than simply trying to make poverty less devastating to families and communities. Second, while the editorial made an attempt at balance on the role that minimum wage plays in poverty, we would like to ensure there is no confusion on a few salient points.

The most recent minimum wage review, held by the Government of Alberta in the spring of 2010, saw a well-funded, well-organized national restaurant and foodservices organization lobby the all-party review committee for a two-tier minimum wage. The committee received 130 form letters from this organization. (It might be interesting to note that the same organization is lobbying in Newfoundland and Labrador as that province undertakes its own minimum wage review this fall.) Meanwhile, at the Calgary consultation in 2010, the overwhelming majority of individuals and organizations were asking for an increase to minimum wage and stated that a two-tier wage was regressive and ill-advised.

The committee’s resulting recommendations to the Minister of Employment and Immigration included an increase to minimum wage and that the province adopt a poverty reduction strategy. The response from the Minister at the time was to institute a two-tiered minimum wage and to ignore the poverty strategy recommendation. Thankfully, nearly two years later we are seeing some movement on the recommendation for a provincial poverty strategy and we can only hope that we will soon see another review of the minimum wage.

The conversation on income and poverty has certainly advanced since the minimum wage review in 2010 – more people are engaging in the debate, including the editorial board, which preceded their editorial with a poll asking if minimum wage in the province is fair. The results came in a resounding “No” at 66% of 773 people who say that we can’t expect people to live at the current minimum wage.

According to the province’s minimum wage profile, more than 50% of minimum wage earners are over the age of 25, about 65% are women, and more than 65% have high school or greater education. Facts do not support misconceptions that people earning minimum wage are all teenagers, uneducated, or aren’t working hard enough. Most minimum wage jobs offer little flexibility, limited vacation, few or no benefits, shift work, and often a fight to get enough hours to cover the bills. We must insist on better for our province – we must be prepared to pay people enough to live with dignity.

As noted in the editorial, Alberta has the lowest percentage of minimum wage earners compared to other provinces but this fact doesn’t tell us much other than the percentage of Albertans who make minimum wage. It certainly doesn’t tell us anything about low-income earners in general since we know that low wage earners are a much larger category than those earning just minimum wage. Using Calgary as a base, earners would need to make $14.50/hour just to meet the Low Income Cut Off (a frequently used measure to gauge a level of poverty). $14.50/hour is certainly a far cry from $9.75/hour and there are more than 340,000 individuals in Alberta making less than that, for further context, there are more than 250,000 people making less than $13.00.

Alberta’s average wages don’t provide much relevance as a stand-alone indicator for the average person; median incomes are generally accepted as a better indicator. Averages do however provide some useful information when comparing the lowest income earners with the highest. In Alberta, we see that those in the bottom 20% of earners make $17,600, those in the second lowest make $40,900 and those in the top 20% make $164,900. Income disparity is increasing in Alberta and a huge segment of the population continues to fall further and further behind.

Many refer to minimum wage as a blunt instrument against poverty; even if that’s true, we shouldn’t be hasty to dismiss it. Subscribers to a particular brand of economics often refer to the negative effect that raising minimum wage will have on employment overall but there are just as many economists who subscribe to another theory that suggest raising minimum wages have a positive effect, and, both sides can produce evidence to support their positions. This debate detracts from the crux of the issue: income and poverty are (obviously) related and low wages cause people to live in poverty. Simply raising incomes is not a complete solution to poverty but it is effective in tandem with other strategies and is an essential component of a comprehensive poverty reduction strategy.

We’re much more interested in debates that can build on strategies that lead to an Alberta that doesn’t include poverty. What kind of future do we imagine for the province? What kind of legacy do we want for our children, our loved ones, and our communities? The sooner we realize that decent and fair incomes, including minimum wage, play an important role in reducing poverty, the quicker we can get to an Alberta where everyone succeeds.

Alexa Briggs and Dan Meades
Vibrant Communities Calgary