For the better part of the past decade, Calgary politicians and business-leaders alike have trumpeted the Alberta Advantage, prompting many workers to flock to the city in search of a better life. This has not always proven to be the case, for as an oil boom has filled bank accounts province-wide, it has also had some staggeringly negative side-effects. The recent announcement of the second rise in the provincial minimum wage in the past three years does little to change the fortunes of the city’s less fortunate.
Upon first glance, the bump of the minimum wage from $7 to $8 can be interpreted as a great victory for social spending advocates. Indeed, the bump brings Alberta up to par with Manitoba, Quebec, Ontario and British Columbia as the highest in the country, and is actually the highest when tax provisions are taken into account. What pundits seem to be forgetting is that the hike comes as Alberta is experiencing the highest inflation in the country, with the 5 per cent annual rise in prices measured in May being more than twice the 2.2 per cent national average.
The reasons for Alberta’s inflation are plentiful, but most of the fingers tend to get pointed at the boom. At a time when Alberta’s economy is producing as many goods, services and houses as possible, an influx of workers and oil money only serve to drive up prices. In this context, the rise of the minimum wage can be interpreted as bumping up the price level even further, the last thing disadvantaged Albertans need.
Even worse, at a time when the costs of doing business in an economy revolving around oil–natural gas and gasoline among others–are sky-high, many businesses only have so much money to spend on employees. A rise in the minimum wage may only serve to crowd lower-wage earners out of the jobs they so desperately need.
Following their recent by-election victory in Ralph Klein’s old Calgary Elbow riding, Liberals are hoping their good fortunes will continue in the inevitable general election. Given the only thing that will help their plight is a renewed commitment to social spending, Alberta’s disadvantaged will probably turn up to the polls in droves to ensure that happens.