FOR IMMEDIATE RELEASE: October 01, 1998
Minimum Wage increase is too little, too late
EDMONTON – Minimum wage workers will be getting their first raise in six years today – but it’s a case of "too little, too late," says Audrey Cormack president of the Alberta Federation of Labour. "When it comes to the government’s decision to increase the minimum wage, there are some positives and a whole lot of negatives," says Cormack. "There’s absolutely no doubt that minimum-wage workers will welcome the extra money. But we’re still not willing to applaud the Premier or members of his cabinet for this decision." Cormack 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. Cormack says that for the longest time, members of the Klein government tried to ignore the problems faced by the working poor. "As recently as six months ago, the Tories were claiming that the $5-an-hour minimum wage was fair," she said. "They were so deep in denial, in fact, that Labour Minister Murray Smith suggested publicly that we should eliminate the minimum wage entirely. Albertans should not forget that this government was prepared to allow wages to sink as low s the market would allow." The second reason why Cormack is dissatisfied with the government’s performance on the minimum wage is that – even after the increase – the minimum wage in Alberta will still be a poverty wage. Cormack points to Statistics Canada figures showing that workers living in major cities like Edmonton and Calgary have to earn about $16,000 a year to keep themselves above the poverty line. At the old minimum of $5 an hour, minimum wage earners working 40 hours a week earned only about 65 per cent of the Stats Can "poverty wage". "Now that the minimum wage is being boosted, it’s true that low-wage workers will earn more," says Cormack. "But even with an extra 90 cents an hour, minimum wage workers will still be earning only about 77 per cent of the income they need to stay out of poverty." The final reason Cormack says she is dissatisfied with the government new minimum wage policy is that it still does nothing to protect the minimum wage from inflation. Cormack points out that the minimum wage 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 dropped by about 40 per cent. "All you have to do is look at the numbers," says Cormack. "In 1977, the minimum wage was $3 an hour. If you adjust for inflation, that $3 wage is equivalent to $8 an hour today. Clearly, even after the increase, Alberta’s minimum wage is much lower today than it was 20 years ago." Cormack 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 lives 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 Cormack. "That’s the amount that a full-time worker needs to earn in order to stay about the poverty line." In addition to a higher minimum wage, Cormack says the government needs to put in place some kind of mechanism that adjusts the minimum wage upward on a regular basis to compensation 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 Cormack. "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 doesn’t meet the needs of Albertans."
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