April 1st launch of new minimum wage isn't fooling anyone - Alberta wage is still embarrassingly low

    Alberta's high cost of living means that minimum wage should be set
    closer to $12 an hour, says AFL

    EDMONTON, March 31 /CNW/ - The Alberta government may be launching its
new minimum wage on April 1st, but they're not fooling anyone when they say
it's a big step forward for Albertans.
    "Given the vast wealth our province possesses and our booming economy,
all working Albertans should be living above the poverty line," says Alberta
Federation of Labour president Gil McGowan.
    "At the new level of $8.40 our minimum wage still won't even come close
to being a living wage."
    A living wage is the minimum hourly wage necessary for a person, working
full time, to afford the fundamental costs of living - safe and healthy
housing, food, utilities, transport, health care, and recreation.
    "Alberta should be leading the country when it comes to minimum wages,
particularly when it is leading the country with respect to inflation and our
skyrocketing cost of living."
    "At least $12 an hour would be required to ensure a living wage for all
working Albertans," says McGowan. "Currently, Ontario, Manitoba and Nunavut's
minimum wage levels are higher than $8.40 an hour, and Saskatchewan will also
surpass Alberta on May 1st. The rest of the provinces' minimums are close to
Alberta's as well."
    "So when the government claims that Alberta's minimum wage will be the
highest in the country - that's simply not true," says McGowan.
    One thing that McGowan says the government did right is to index the
minimum wage to the average weekly wage index, so it automatically increases
(if the index has increased) on April 1st every year. "Now they need to get
the base rate right."


    On March 18, 2008, the Stelmach Government issued a press release lauding
the April 1st increase of Alberta's minimum wage level from $8.00 to $8.40 an

    What did the Stelmach government fail to mention?

    The government's March 18 press release touted the new minimum wage as
"the highest in Canada after taxes". However, they left out the fact that
Alberta's inflation rate is also leading all of the other provinces.
    In February 2008, Alberta's inflation rate lead the country at 3.5%
(compared with the national average of 1.8% (Statistics Canada). When one
takes into consideration other factors, the minimum wage announcement starts
to lose some of its gloss.

    What wage is needed to prevent an Albertan from living in poverty?

    The standard Canadian government measure of poverty is called the Low
Income Cut-Off, or LICO. Earning an annual income below this level means even
our government would consider that worker to be poor (their words refer to
financially "straitened circumstances"). Here are the latest available cut-off

    Low-Income Cut-Off (LICO) Level (after tax) for 2005 (Statistics Canada)
                            (less than)
    Population     Rural       30,000      30-100K     100-499K    500,000+
    Individual     $11,264    $12,890      $14,380      $14,562    $17,219
    Family of 4    $21,296    $24,373      $27,190      $27,532    $32,556

    What does $8.40 an hour translate into as an annual income after
deductions, if someone worked a full 40 hour work week, every week (52 weeks)
of the year and never took any vacation? A whopping $13,769.64.
    So anyone making $8.40 an hour in Alberta, supporting more than just his
or herself, and living in a community with a population of greater than
30,000 people, would fall under the 2005 LICO. We can also reasonably assume
today's LICO numbers are slightly higher than the 2005 cut-offs.
    Our understanding that these workers live in poverty becomes even clearer
when one calculates that a worker making Alberta's new minimum wage brings
home (after deductions) $1147.47 each month. Compare this number with the
average monthly cost in Alberta for rent of a two-bedroom apartment at
$1,011 per month (CMHC's October 2007 Rental Market Report).
    Even a wage of $12 an hour at 40 hours/week for 52 weeks/year, after
deductions, still results in an annual income of $14,075.58. Workers earning
$12 an hour are reasonably considered to be low wage earners.

    How many Albertans aren't "sharing in the prosperity" that the province
is currently seeing?

    The government's press release makes a point of mentioning that only
70,000 (3.5%) of employed Albertans are making the minimum wage, and that the
majority of those are teenagers.
    However, a closer look at Alberta's numbers reveals that, as of April 1,
2007, there were 343,400 employed Albertans working at wages lower than $12 an
hour. This is a full 21.9% of all employed Albertans, or more than one-fifth
of those employed in our province.
    And of these low wage workers, over half of them are over 24 years old
(52%) and 64% are women. These workers aren't just teenagers looking for some
extra spending money.
    Sadly, one in twelve of all children in Alberta are still living in
families earning below the LICO, and almost half (49%) of these children are
living in families where at least one family member is fully employed
(full-time, full-year employment).
    The fact that poverty is still a big problem in Alberta, despite the
province's current prosperity, is glaringly obvious.
    Unfortunately an increase of our minimum wage to $8.40 an hour doesn't
come anywhere near to addressing the fact that a whole lot of working
Albertans are poor. For shame Premier Stelmach.
    With our province's wealth, no one should be making less than a living
wage, that is, the wage required to provide an income that will allow a person
or family to maintain a safe, healthy standard of living in his or her

For further information:

For further information: Gil McGowan, AFL President, @ (780) 483-3021
(office) or (780) 218-9888 (cell)

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Alberta Federation of Labour

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