Blog | June 18, 2012

By Gillian Steward, The Toronto StarCALGARY—Alberta and Saskatchewan have the fastest growing economies and some of the most profitable corporations in the country right now. But they are also the provinces with the lowest minimum wages.Yet another sign that mega investments in resource developments greatly benefit some people but leave others in the dust.Alberta’s minimum wage is going up, but not by much. Premier Alison Redford announced recently that in September minimum wage will increase by 35 cents to $9.75 an hour, just above Saskatchewan’s rate of $9.50, the lowest in Canada.Of course, most employed people don’t earn minimum wage, they earn much more. In fact, the province estimates that fewer than 26,000 workers in Alberta are paid minimum wage, or about 1.6 per cent of the workforce that is not self-employed.But those numbers are deceiving because many thousands more are earning just above minimum wage and barely scraping by. When $15 an hour is used as the baseline, almost a quarter of the province’s workforce earns less than that.“These numbers show that Alberta is not the land of milk and honey for all Alberta workers. Workers and their families in Calgary continue to struggle in one of the most expensive cities in the country. This leaves many families taking more than one job, and struggling to find affordable quality child care,” said Julie Hrdlicka of Public Interest Alberta, which released the information compiled by Statistics Canada last week.In Medicine Hat, a city of 60,000 near the Alberta-Saskatchewan border, about one-third of the workforce earns less than $15 an hour and most of these workers are women.In Calgary, almost a quarter of the workforce earns less than $15 an hour. And these are not teenagers slinging hamburgers and living at home. Eighty per cent of these workers are in their prime earning years.The number of low-wage workers in Alberta stands in stark contrast to the high rate of profits earned by business in the province — rates that are not only the highest in Canada but exceed those in the United States.Kevin Taft, former leader of the opposition, discovered this when he teamed up with Mel McMillan, an economist at the University of Alberta, to follow the money trail of Alberta’s booming economy. They wanted to know where all the money generated in one of the wealthiest jurisdictions in the world was going.The first clue came in a 2007 report by TD Bank which noted that corporate profits in Alberta were equal to 22 per cent of Alberta’s gross domestic product (GDP), twice the share posted in the rest of Canada, and higher than U.S. rates.With the help of data from Statistics Canada, the authors also discovered that corporate profits per capita in Alberta (adjusted for inflation and population) had tripled between 1989 and 2009. And even though there was a dip in profits following the 2008 recession, the trend line is still going up.During the same period, average personal income in Alberta (adjusted for inflation) increased by 35 per cent, a sizeable amount but nowhere near triple.Another surprise: per-capita government spending in Alberta is about the same as it was in 1989 (adjusted for inflation).“As a society, Alberta spent a steadily shrinking portion of its increasing wealth on provincial public services,” writes Taft in Follow the Money: Where is Alberta’s Wealth Going?.Alberta has the lowest provincial tax rate in Canada, and oil and gas royalty rates far below those of similar petroleum-rich jurisdictions in other parts of the world. So while corporate profits swell, spending on public services stagnates.Not all businesses in Alberta make huge profits and not all workers are at the bottom of the wage scale. But those who are at the bottom are caught in a vise that is extremely hard to escape.They are not only faced with the second lowest minimum wage in Canada, they have to pay more for necessities such as child care, medicine and housing because the government would rather keep taxes low than provide government-sponsored programs to help low wage earners and their families.Redford was elected because she managed to convince Albertans that she is a progressive politician who wants government to play a much more active role in creating a prosperous and just society.Certainly all those people on the low end of the wage scale are hoping she lives up to that promise.Gillian Steward is a Calgary writer and journalist, and former managing editor of the Calgary Herald. Her column appears every other week.By Gillian Steward, The Toronto Star
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This article was published in the Toronto Star on June 18, 2012. Read the full article on the Toronto Star website.