Mr. Thomas Lukaszuk, MLA
Minister of Employment and Immigration
 
March 1, 2011
 
Dear Mr. Lukaszuk:
 
Thank you for addressing the impending minimum wage policy review in your CBC Radio interview today; our conversation reflected the education that is still needed around such a policy.  I am writing to you as the Director of Vibrant Communities Calgary, a non-profit organization that works collaboratively with various stakeholders and partners, seeking to engage Albertans and to advocate for long-term strategies that address the root causes of poverty.  Further Minister Lukaszuk, I encourage you to consider endorsing a minimum wage that is a Living Wage, as a strategy to simultaneously stimulate economic growth and reduce poverty in our province.  Contrary to your assertion on the Radio today of a Living Wage between $14 to $16/hr.; we recommend $12.25/hr. as calculated by using LICO (the Low Income Cut Off).
 
Consider the Costs of Poverty to Taxpayers
There are approximately 300,000 working poor in Alberta, and half of children living in poverty in Alberta are in households where one or more adults work full time for the full year.  Allowing poverty to continue, from a true fiscally conservative view, makes no sense; the costs to taxpayers are significantly more when addressing symptoms rather than root causes.  We know that poverty increases government’s spending in health care, corrections, social welfare, and education, a price tag that falls disproportionately to the taxpayer.  Implementing a Living Wage will save the taxpayers money by eliminating band-aid services and addressing root causes of poverty in our province. Businesses should not be allowed to shift the burden of taxes to hard working Albertans by paying poverty wages.
 
Consider how Low Wages Keep Albertans in Poverty
The first step in ending poverty is to address the appallingly low wages in Alberta that perpetuate the costly cycle of poverty.  An individual working full time and making $8.80/hour has no possibility of being able to afford the cost of living in Alberta; this leaves taxpayers to bear the brunt of costly social programs. We need only look to the Low Income Cut Off (LICO) to realize this stark economic reality: LICO for an individual without dependents is $22,171/year (before tax), while an individual working 35 hours/week at minimum wage in Alberta makes $16,016/year (before tax). Further, these minimum wage jobs very rarely have benefits, sick leave, and other supports. Linking the minimum wage to LICO to create a Living Wage is a logical move as it provides a government-established and timely assessment of the bare minimum income needed to live.  Alberta’s minimum wage comes nowhere near a safe, decent, and dignified standard of living.  25% of working Albertans make a wage that ensures reliance on costly social supports.  Over half of these people are over the age of 25; and more than 60% have more than a year of work experience, which dispels the misconception that minimum wage affects only students and those new to the job market.

Consider a Living Wage as a Tool to Reduce Poverty
Innovative poverty reduction strategies are a growing trend in entrepreneurial provinces; Alberta is falling well behind other provinces in the minimum wage standard and in a targeted approach to poverty reduction. Alberta has one of the lowest minimum wages in the country, even though we have one of the highest costs of living and boast the province as a land of opportunity; it’s time to make this a reality for all Albertans. Nearly all other provinces have adopted poverty reduction strategies that include Living Wages as a component. There is more and more recognition that poverty hinders growth, the economy, and innovation; Alberta should not be left behind but instead take the lead to systematically eliminate poverty and create an economically sustainable province.
 
Consider Implementing a Fair Minimum Wage and a Living Wage Index
Using the Low-Income Cut Off is the best way available to set the minimum wage standard. It is the bare minimum that one person needs to make a safe, decent standard of living and a very reasonable and objective measure to recognize and compensate one person for the value of labour.   We recommend a plan to phase in a minimum wage over the next two years that will at least reach LICO; $12.25/hr. It is from this base that a made in Alberta index should be created.
 
We are hopeful that you will make a decision that is fair to both earners and employers. Please don’t hesitate to follow up with me if Vibrant Communities Calgary can be of any further assistance in this regard.
 
Sincerely,

Dan Meades
Director, Vibrant Communities Calgary