Alberta economist pushes for delay in $15 minimum wage hike

The restaurant industry has stepped up its “Not The Time” campaign against a $15 minimum wage in Alberta, citing public support to delay the raise due to economic uncertainty as the province works its way through a recession.

“Our industry is concerned about the unintended consequences of increasing the rate too quickly,” Mark von Schellwitz, Restaurants Canada’s Vice President Western Canada told attendees at a recent industry conference. “We will get to a $15 minimum wage in time, but imposing a 50 per cent increase in just three years (a whopping 63 per cent increase for liquor servers) is simply too much, too fast given the current state of Alberta’s economy.”

In October 2015, the Alberta government boosted the province’s minimum wage from $10 an hour to $11.20, putting the province in the middle between NWT at $12.50 and New Brunswick on the bottom end at $10.30.

A poll commissioned by Restaurants Canada, found 64 per cent of Albertans think raising the minimum wage to $15 by 2018 is “too much for businesses to handle given the state of the Alberta economy.” The online survey of 757 Albertans found concerns to be the highest in Calgary.

But NDP Labour Minister Christina Gray shot back, saying the campaign by the restaurant industry – one of many in the voices in the business sector pushing back against the policy – won’t derail the government’s plan to raise minimum wage to $15 by 2018, a core value in their initial election platform.

“That particular poll, you can ask questions in different ways, you can get different types of feedback,” Gray told the CBC adding that the NDP would announce the next phase of the minimum wage increase and timing within the next few days. According to the Alberta Labour department, around 59,000 Albertans earn minimum wage with half of those employees working full time.

“They’ll absolutely have a place at our table,” Gray said. “We are focused on meeting our goal of $15 an hour by 2018, but we want to do that in a way that works for everyone.”

Joseph Marchand, a labour economist and associate professor of economics at the University of Alberta inadvertently became a core voice in the Not The Time movement after throwing his thoughts into the fray with his paper Thinking about Minimum Wage Increases in Alberta: Theoretically, Empirically, and Regionally.

“I have no problem with the argument that this policy would reduce inequality,” the labour economist told Yahoo Canada Finance. But what Marchand argues is that the boost could be more aptly timed to coincide with a strengthening energy sector, which could create more jobs and help stifle some of the job losses that could come from implementing a policy like this.

“If a third energy boom is on the horizon by 2018, then we really have nothing to worry about,” says Marchand. “However, given forecasts for energy prices, it looks like that’s not going to be true.”

From the look of things, the NDP are going to push forward with their wage increases. One element Marchand says could work in tandem with a wage increase policy is the recently scrapped job-creation incentive, tabled during the NDP’s campaign.

“There’s a lot to like with this particular minimum wage policy being paired with some type of labour demand stimulus,” he says adding that its since been removed from the party’s platform.

However, if the Alberta government does stick by their minimum wage increase to $15 by 2018, Marchand says they could throttle the increases early on and make bigger increases in step with a recovering economy.

“If wages do go up, let’s at least do it slowly – smaller increases now, bigger increases later,” he adds.