FOR IMMEDIATE RELEASE: July 8, 1998
Minimum wage increase is too little, too late
Thousands of Albertans will still live in poverty, says AFL
EDMONTON – Later today, the Alberta government will formally announce plans to increase Alberta’s minimum wage. Over the next 14 months, the minimum wage will be increased in stages from its current level of $5 an hour to $5.90 an hour. But the increase is too little and it’s coming much too late, says a spokesman for Alberta’s largest labour organization, the Alberta Federation of Labour. "When it comes to the government’s decision on minimum wage, there are some positives and a whole lot of negatives," say the AFL’s Secretary-Treasurer, Les Steel. "There is absolutely no doubt that an extra ninety cents per hour will help thousands of low-wage Albertans afford the basic necessities of life. The decision to get rid of the differential wage for young workers is also positive. But, we’re still not ready to applaud the Premier or members of his cabinet." Steel says there are at least three reasons why Albertans should be dissatisfied with the government’s performance on the issue of the minimum wage. First, the decision to increase the minimum wage was much too long in coming. Steel says that for the longest time, members of the Klein government tried to ignore the problem. "The Tories claimed that the minimum wage was fair and they argued that there was no provable link between Alberta’s abysmally low minimum wage and rising rates of poverty in the province," said Steel. "They were so deep in denial, in fact, that just six months ago Labour minister Murray Smith suggested that we should eliminate the minimum wage altogether. Albertans should not forget that this government was prepared to allow wages to sink as low as the market would allow." The second reason why Steel is dissatisfied with the government’s performance on the minimum wage issue is that -- even after the increase -- the minimum wage in Alberta is still a poverty wage. Steel points to Statistics Canada figures showing that workers living in major cities like Edmonton or Calgary have to earn about $16,000 a year to keep themselves above the poverty line. At the current minimum of $5 an hour, minimum wage earners working 40 hours a week earn only about 65 per cent of the Stats Can "poverty wage". "Once the minimum wage is boosted, low-wage workers in the province will earn more, but it still won’t be enough to pull them out of poverty," says Steel. "Even with the extra 90 cents an hour, minimum wage workers in Alberta will still be earning only about 77 per cent of the income needed to stay out of poverty." The final reason why Steel says he’s "less than thrilled" with the government’s decision on the minimum wage is that it does nothing to protect the minimum wage from inflation. Steel says that the real value of the minimum wage in Alberta has been substantially eroded by inflation over the past 20 years. In fact, between 1977 and 1997 the real value of the minimum wage in Alberta has dropped by about 40 percent. "All you have to do is look at the numbers," says Steel. "In 1977, the minimum wage was $3 an hour. If you adjust for inflation, that $3 wage is equivalent to $8 per hour today. Clearly, even after the increase, Alberta’s current minimum doesn’t even approach the amount that minimum wage workers used to earn in this province." Steel says that what Alberta really needs is a "living wage" – a minimum wage that keeps low-wage workers out of poverty and allows them to participate fully in the life of their communities. "We at the Alberta Federation of Labour would like to see the minimum wage raised to about $7.85 an hour," says Steel. "This is the amount that a full-time worker needs to earn in order to stay above the poverty line." In addition to a higher minimum wage, Steel also says the government needs to put in place some kind of mechanism that adjusts the minimum wage upward on a regular basis to compensate for inflation. "A mechanism to compensate for inflation is essential because a wage that keeps people out of poverty today may not be enough to keep them out of poverty in the future," says Steel. "If these kinds of things aren’t done, in five years we’re going to be right back where we started – we’re going to have a minimum wage that is inadequate to meet the needs of Albertans."
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