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The War on Minimum Wage

Do the arguments against a higher minimum wage hold water or are they yet another refrain designed to keep profits in the pockets of highly paid CEOs?

Apr 11, 2018

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As more and more jurisdictions take on the fight for a $15 minimum wage, including here in Alberta, the chorus of voices opposed to giving working people fair pay has been growing louder and angrier.

But do their arguments hold water or are they yet another refrain designed to keep profits in the pockets of highly paid CEOs?

Alberta''s minimum wage received a much-needed boost in recent years, when the provincial government pledged to increase it to $15 per hour.

The most recent increase in October 2017 bumped it up from $12.20 per hour to $13.60 per hour, and another increase in October 2018 will raise it to $15.

On one side, proponents of the increase argue minimum wage should rise until it at least matches a living wage.

On the other side, opponents of the higher minimum wage say the increases are too much and are coming too fast for business owners to adequately cope, leading to cut hours or even layoffs.

"This argument assumes that business owners, including even the most profitable corporations, should have the right to underpay their employees in order to retain those profits," said AUPE Vice-President Karen Weiers. "It''s a weak justification for keeping the minimum wage untouched. Why should workers be forced to subsidize a business''s costs by accepting lower wages?"

In reality, Alberta''s small business owners have had the benefit of a steadily decreasing small business tax rate, dropping from six per cent in 2000 all the way down to two per cent in 2017. Some sources this year even showed that the median salary of a Canadian small business owner is just over $59,000, suggesting the higher minimum wage is more affordable than its opponents are suggesting and wouldn''t justify mass layoffs.

Weiers noted that Alberta''s minimum wage has climbed quickly before. When adjusted for inflation, the minimum wage in 1977 and 1978 was worth $12 in today''s dollars. Those two years saw some of the lowest provincial unemployment rates in Alberta''s history, she added.

In stark contrast, between 1983 and 1993, the minimum wage''s value plummeted to its lowest lows - $6.91 per hour in 1991 (in 2015 dollars) - and unemployment rose to an average rate of 9.18 per cent. And while the national average income increased at the same time, it was only top-earning Canadians who experienced a real increase in their take-home pay.

"It''s high time that Alberta''s lowest income earners got their fair share. They should benefit from the hard work they do daily," said Weiers. "Raising the minimum wage is a good first step towards ensuring all Albertans can take care of themselves and their loved ones."

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