Alberta NDP,
I think many people, myself included, wanted to see Alberta under real new management. I am looking forward to that, and hoping that we will build Alberta to be better.
I am writing to you today as I just read an article where Rachel Notley expressed her desire to move forward with a $15/hour minimum wage. I wish to convey my views on this to you.
First, I do understand the desire to decrease the income gap. It is hard living in poverty. I grew up in it myself, and worked hard to get out of it as an adult. However, just as the cancellation of phase two of Sherwood Park’s hospital was short sighted, so too is increasing minimum wage to $15/hour. It will have a devastating ripple effect in the labour market over the following 3 years. Unless you are prepared to try freezing income levels for everything above minimum wage, you will have only achieved a mass of inflation on the Alberta economy. Here is what I mean. Let’s say we increase minimum wage to $15/hour. What does that say to everyone who made (for example) $5 more than minimum wage? For a variety of reasons such as, but not limited to: seniority, experience, and labour demand people will be looking for a raise. Can you imagine the unions? They’ll have a field day with it – “Our workers were making ‘x’ amount more than minimum wage because they deserved it. Now that minimum wage has gone up, our workers need an increase proportional to their value.” It will start by raising minimum wage to $15/hr. Then businesses will need to give all of their employees that were making $15/hr before $20/hr. It won’t end until maybe we hit the $50-$60/hr range. But then, what has been done? Businesses (small especially) will need to charge more for their goods to manage that – inflation. This means that everyone that you tried go help by giving an increase in minimum wage to (which is a very, very small amount of Albertans) now will need to pay more for everything. Now we get to the people who wouldn’t have immediately raised their wage – lawyers, doctors, etc. Their cost of living now goes up, so now their wage goes up along with their service fees. Do you see where I’m going with this? Rent and affordable housing will also become more expensive as landlord costs go up. People work hard, go to post-secondary, and earn seniority to get above minimum wage. They will demand an increase in pay for their value over a minimum wage worker. Slightly different, but on the same lines, is Fort McMurrey which has wages and costs that are ridiculous. Why? Because everyone there make more money due to the oil sands. The demand for housing is high yes, but even McDonalds will cost you $2-$4 more per meal than elsewhere. Inflation isn’t something that a country necessarily does together. It can be isolated to a city, or even a province. This is only one negative to what will happen from a workers perspective. And now, secondly, we get into businesses.
When wage costs go up for a business, it’s not just a $/hr cost. They have to pay increased employers portions of EI (1:1.4) and CPP (1:1). These amount go up on a graduated basis which means more money coming out of a small business owners pockets. Small businesses will either have to increase prices, cut staff, a variety of those two, or close up shop. I’m not talking about the large department chain stores that have stores across Canada. Prices will go up in their stores too, but likely not by as much. Small corporate owners will be hurt by this.
Third, and the last of my points. You would be raising wages here, but the federal personal income tax levels are higher than ours, and higher than what your proposing. Taking my first point of across the board wage increases, minimum wage earners may not pay much more federal PIT, but many others will. This means essentially then that we are simply raising wages and costs here to ship more money off to Ottawa. Will it come back proportionately? No, I highly doubt it. I won’t even get in to where it’s likely to end up. So you achieve inflation only to send more money out of the province. It makes me sad, and frightened for our province’s future.
I am trying to appeal to you from the stance that I know you are coming from. I know that the NDP, perhaps more than any party, cares about workers. But this is not going to help them in the long run. In about three years you’ll be right back where you started, except that you will have mass inflation. I would personally rather you raise social assistance programs for those very few making minimum wage here rather than seeing a wage increase. At least then the money stays in Alberta. I believe you ran on a platform to promote accountability, and to listen to Albertans when they talk to you. Yes, we did vote you in. That doesn’t however mean we agree with everything in your platform. This in particular I was hoping you’d drop. Since the party seems intent on pushing forward with it, I must do what I can to raise the issue with you and the party to stop this from happening. Please reconsider this action, and reverse your course on it.
Thank you for your time and consideration,
Concerned Albertan
