On minimum wage, comfort in the middle ground

Which is a worse social ill: people working at a job that does not pay a livable wage, or people losing their jobs so that those workers remaining can live on their wages?

These are the choices Albertans are being asked to consider in the public discussion around our new government's announced decision to raise the province's minimum wage to $15 an hour in three years.

Of course there are other, more middle-ground outcomes to consider, but when the lines are drawn in a debate about money — and who should have how much of it — the stark choices are the only ones we're generally shown.

Alberta currently has the second lowest minimum wage in Canada: $10.20 an hour.( The Northwest Territories pegs theirs at $10, but there are plans to raise that soon). Alberta also has the lowest percentage of people actually working at that wage: 1.8 per cent of workers, versus the national average of 6.8 per cent.

The majority of people working for minimum wage are under 25 years of age, and the provincial average wage for that group is reported to be $18 an hour — the upper end of the national scale for wages for young people.

Premier Rachel Notley ran on a platform that included boosting the minimum wage to $15 an hour, and the NDP platform became policy rather quickly.

Enter the economists. You can get as many predictions about the economic effects of changing the minimum wage as you can afford to pay for, but suffice to say the results are mixed.

Really, nobody knows what happens when the minimum wage is raised to a point where every person working full time can actually live independently on their salary. Chiefly because there are so few places where that's possible.

The cities of Los Angeles, San Francisco and Seattle have done, or are moving toward a $15 minimum hourly wage, and the outcome of debate there is that economists are happy to finally have a live, large, real-time social experiment to monitor.

The Canadian Federation of Independent Business points out numbers of job layoffs that would accompany each percentage increase in the minimum wage. They suggest that the near-50-per-cent hike proposed for Alberta could result in anywhere between 53,400 and 195,000 job losses.

When only 40,000 Albertans currently earn the minimum wage, it's hard to figure who would be left to serve our hamburgers, bus tables at restaurants and clean our hotel rooms, but there you are.

At $15 an hour, a full-time worker will earn about $28,000 a year, making that person a bona fide taxpayer. A full-time worker on Alberta's current minimum wage will gross less than $20,000 a year. Part of the consideration for those who monitor social policy experiments.

Nobody is proposing that we eliminate poverty by ensuring everyone makes at least $25 a hour. Likewise, nobody is proposing that a minimum wage law is the full answer to poverty. Questions around poverty, like unemployment and homelessness, cannot be resolved that simply.

Rather, the minimum wage is a justice issue, speaking to the value of anyone's labour. If you work for a day, you should be able to live for another day — and you can't do that for long on $10.25 an hour.

One interview of dozens you can find in the news streams comes from a representative of Edmonton's downtown business association. Business owners there aren't complaining to Jim Taylor, president of the association about the change.

One downtown Edmonton restaurant owner, who employs 25 people, says the change will have no effect on her operation.

The Canadian Association for Policy Alternatives studied the studies and even in traditionally low-paid jobs, they found no significant relationship between changes in minimum wage and labour market outcomes, 90 per cent of the time. (Meaning one business that lays people off is offset by other businesses that hire.)

Claims that higher wages have large-scale negative labour or economic consequences were not borne out by the studies reviewed.

But where else has the minimum wage been raised almost by half over three years? Not too many places. So in Alberta, the jury is definitely out.

So you can believe the social engineering types or the doomsayers on what will happen next. For now, anyway.

For myself, until the results are actually shown, I'll opt to look to the comfortable middle ground.

What's going to happen? More Albertans will likely become minimum wage-earners — and if they're careful with their dimes and dollars, they'll be able to be full citizens on that. Not that bad an outcome, I'd say.

As to the economists, I prefer John Kenneth Galbraith, who said the only function of economic forecasting is to make astrology look respectable.