Part of the reason there are so many people living in poverty is because we accept outdated information from irreputable sources. 

While 2010 was a progressive year for minimum wage increases across Canada, Alberta maintains the second lowest minimum wage in the nation; this is the case even as its economy is forecasted to grow healthily.  A recent article in the Calgary Beacon, written by Niehls Veldhuis and Amela Karabegovic of the Fraser Institute, claims that increasing the minimum wage would lead to an increase in poverty.  This claim could not be more divergent from leading research on the issue, and was supported with limited and misleading data: the most reliable sources show us that the opposite is true, that an increased minimum wage actually reduces poverty.  Two over-arching fallacies dominated their argument, which we feel compelled to refute: firstly – that minimum wage earners are primarily young students living with their parents; and secondly – that raising the minimum wage leads to job loss. 

Minimum wage earners are not only - or primarily - students living with their parents.

According to the Province of Alberta, over half of minimum wage earners are above the age of 25, 60% of which are women.  Furthermore, 60% of minimum wage earners already have more than 1 year’s work experience, and have earned at least a high school diploma.  This is at odds with Veldhuis and Karabegovic’s “optimistic” assertion that most Canadian minimum wage earners experience a 20% wage increase within a year.   Even assuming such an increase were typical, this translates to a move from $8.80/hour to $10.60/hour – still poverty wages. 

Increasing the minimum wage is NOT correlated with job loss, according to an overwhelming number of well-respected economists and statisticians. 

The idea that increasing the minimum wage would lead to job loss is outdated, and fails to account for the many variables that affect wages and the job market.  When minimum wage is isolated as a variable, most reputable economists agree that raising it either has no impact on employment, or has a slight positive impact – even during a recession.  In fact, 650 U.S. economists – including 5 Nobel Prize winners and six past presidents of the American Economics Association – have signed a statement agreeing that minimum wage increases “can significantly improve the lives of low-income workers and their families, without the adverse effects that critics have claimed”.  Studies of Manitoba and Canada have supported this statement, showing that there is no likelihood that an increase in the minimum wage will decrease employment.  Furthermore – and contrary to what some critics have posited – research at MIT and the London School of Economics suggests that increasing minimum wages has no impact on the level of training that occurs on-the-job.  On the other hand, employment can increase slightly in relation to raising the minimum wage, for two reasons: firstly, job turnover tends to diminish; and secondly, people tend to spend more when they make more money, and thereby create more jobs for other people.    

Alberta’s minimum wage comes nowhere near a safe, decent, and dignified standard of living, and it leaves taxpayers bearing the brunt of costly social programs – it is estimated that poverty costs each household between $2299 and $2895 every year.  Alberta offers one of the lowest minimum wages in the country, even as it incurs the highest costs of living.  Albertans pride themselves on being a province of opportunity; it’s time to make this a reality for all Albertans. 

Nearly all other provinces have adopted poverty reduction strategies that include a Living Wage.  There is more and more recognition that poverty hinders growth, the economy, and innovation.  Albertans should not be left behind, but instead take initiative to reduce poverty and create an economically sustainable province. 

Vibrant Communities Calgary