As of yesterday (Monday, Oct. 1) the minimum wage in this province rose to $15 an hour.
Analysts say that's now the highest minimum wage in the country. (The Ontario minimum wage, currently $14 an hour, was slated to rise to $15 an hour on Jan. 1 next year, but the new provincial government there announced last week it will remain at its current rate).
The hike in this province fulfils a campaign promise the Alberta New Democratic Party made when it formed government in the spring of 2015. At that time, the minimum wage in Alberta was $10.20 an hour.
Olds & District Chamber of Commerce president Ben Stone and local business people contacted about the increase by the Albertan say it's bad for business and the Olds and area economy because it increases costs for businesses, forcing them to cut back on employees, raise prices or a combination of the two.
The Alberta government defends the move, saying the increase of $1.40 per hour will "make life better for hundreds of thousands of workers."
"Every hard-working Albertan deserves to be paid fairly. The $15 minimum wage will make life more affordable for women, single parents, families and everyone who has been working a full-time job or more but is still struggling to put food on the table and pay their rent," Labour Minister Christina Gray said in a statement released Friday.
"I think this is yet another good example of politics coming before economic theory," Stone says.
"While there is considerable debate on whether raising the minimum wage is a positive or negative move for the economy, I think it is safe to say that experimenting with economic theory during the recovery period of a recession isn’t exactly prudent governance. At the end of the day, the money has to come from somewhere.
"If you are a business owner with people employed for less than the current wage, obviously you will either be paying them more, or you’ll be cutting back on the hours you pay for.
"If you’re an employee working for less than minimum wage, you will likely see the opposite – either your wage will go up, or you’re going to see less hours or be let go completely.
"Finally, I think that jobs at or near minimum wage are going to see a significant drop in wage growth for the foreseeable future, due to artificial inflation caused by the government legislation," Stone says.
Tasty Thai owner-manager Garnet Greipel echoes Stone's thoughts.
"It'll affect my business with menu increases," he says, predicting prices in his restaurant will rise 10 to 15 per cent as of this week.
"Somebody has to pay for it and I can't, right? You know, I'm in business to make money. If I'm not going to make money I may as well go work for somebody," Greipel says.
He is also considering cutting back staff to help cover the increased cost.
"We'll just have to see how everything goes. You know, with the menu increase, I'm sure it's going to drop off some customers. And with a drop of customers, you're probably going to have to re-evaluate your staff," Greipel says.
"And I hate to do it but I can't bear all the costs, right? There's not a lot of (profit) margin in a restaurant."
The minimum wage increase will have a negative effect on the Olds Golf Club as well, according to pro-manager Wade Bearchell.
He notes of the approximately 50 workers the golf course employs, about 15 -- mostly high school students -- make minimum wage.
"Approximately 20 per cent of our employees start at minimum wage in their first year. This means we have to increase not only their wages but the wages of every other hourly employee," Bearchell says.
"We must then pass on these operating cost increases to our customers. The net benefit of this I believe is marginal at best, as businesses raise their prices in order to remain viable.
"All prices will rise," he adds. "We will do our best to keep increases as small as possible."
