The Slow Death of the Alberta Advantage

This op-ed was first published in the Lethbridge Herald on October 1, 2024.

Starting today, minimum wage workers in Saskatchewan will be earning $15 an hour. Good for them, who until now were stuck with a meagre pay of $14. Not so good for Alberta, which now officially shares with Saskatchewan the dubious honour of having the lowest minimum wage in Canada.

For a few years (2015–2018), October 1 was the day when minimum wage might catch up — however imperfectly — to the rising cost of living and reflect the relative value of labour.

When Alberta became North America’s first province or state to reach $15/hour in 2018, that high watermark became a key part of the fabled Alberta Advantage. While the current government may use the term to refer exclusively to Alberta’s low corporate income and sales tax environment, historically the “advantage” also encompassed the distinction of having the highest average wages in the country across all sectors.

Those days are long gone — by design. The Alberta government has been explicit about keeping wages low – from the reduced minimum wage for students under 18 to boasting of bringing public spending on wages below other provinces, to hyperbolic reactions to public sector workers asking for below-inflation increases (other egregious examples abound).

As Premier Smith has directly acknowledged,  a higher minimum wage puts upward pressure on wages across the board — surely a net positive at a time of high inflation and a cost of living crisis? It is clear that keeping the minimum wage low supports her government’s agenda to suppress wages for the average Albertan. There is no planned increase to the minimum wage on the horizon as  Alberta is now tied for the lowest in the country. Our ranking as the province with the highest average wages is also coming under threat, as Ontario and BC are narrowing the gap.

A 2023 analysis by the Alberta Federation of Labour showed that wage growth in Alberta between 2019 and 2023 was the lowest in the country, and well below the national average. The report further estimated that just to keep pace with inflation, Alberta’s minimum wage should have been $17.52 by 2023. Yet a living wage (that is, a livable wage to afford necessities such as housing, groceries, insurance, utilities, and transportation) would be around $23/hour in Edmonton and Calgary, just under $19/hour in mid-sized cities like Red Deer and Grande Prairie, $24.50 in Fort McMurray, and $20.60 in Lethbridge.

How many people does this policy choice — and it is very much a choice — impact, especially in the current affordability crisis? We don’t know, because the government stopped collecting or publishing the data that would tell us.

What we do know is that despite a persistent conservative narrative suggesting that minimum wage earners are low-skilled and have no dependents or financial responsibilities, this is not the case. The broad profile of minimum wage earners has remained fairly consistent over the last decade. The most recent numbers, from 2022, tell us that:

• 64% of minimum wage earners are over 19 years old, and a further 11% are over 55
• 40% work full time
• 73% hold permanent employment
• 65% work in the retail, food services, and accommodation sectors, while more than 7% work in health care and education
• 27% hold a post-secondary certificate, diploma, or degree
• 65% are not students
• 60% are women, and 13% support children under 18
• And, for the dog-whistlers in the back: 67% are non-immigrant.

The hue and cry in 2015 foretold tens of thousands would lose their jobs as the province moved incrementally toward $15/hour. These predicted losses never materialized. While many businesses raised their prices to compensate for the increase, those prices have been steadily increasing even now with stagnant wages; the correlation is a weak one. In the meantime, people earning minimum wage are the most likely to put their earnings directly back into the local economy rather than stashing away wealth.

As the Alberta government continues to underfund public services and public infrastructure to claim an artificial “advantage” of lower taxes for some, Albertans might need to ask themselves who killed the real Alberta Advantage — and who is taking advantage of its demise.

Note: images illustrating this post were AI-generated.

Rebecca Graff-McRae

Parkland Institute's research manager Rebecca Graff-McRae completed her undergraduate and doctoral studies at Queen’s University Belfast (PhD Irish Politics, 2006). Her work, which interrogates the role of memory and commemoration in post-conflict transition, has evolved through a Faculty of Arts fellowship at Memorial University Newfoundland and a SSHRC post-doctoral research fellowship at the University of Alberta. She has previously worked with the Equality Commission for Northern Ireland and Edmonton City Council.

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