Alberta’s Disappearing Advantage for Workers
Alberta once boasted the highest wages in Canada. It was known as a place where working people could find a job, earn decent wages, and build a good life for themselves and their families.
Unfortunately, this “Alberta Advantage” has mostly disappeared. Average wages have declined by 10% relative to inflation over the last decade, far more than in any other province. This negative result was not an accident: provincial policies in Alberta have worked to deliberately suppress wages, through measures like a six-year freeze in the minimum wage (now tied for lowest in Canada), restrictions on union organizing and collective bargaining, and very austere wage gains for public sector workers.
Last year, Alberta lost its title as Alberta’s wage leader – to neighbouring B.C., where wages have grown steadily thanks to pro-wage policies (like a higher minimum wage and stronger collective bargaining). Alberta’s deliberate wage suppression has distorted the structure of the provincial economy: corporate profits have skyrocketed as a share of provincial GDP, while labour compensation and small business income have eroded. And contrary to old-fashioned “trickle-down” rhetoric, this one-sided pro-corporate strategy has not sparked faster growth, job-creation, and wider prosperity. To the contrary, by most measures Alberta’s growth, investment, innovation, and productivity have lagged most or all other provinces.
Centre for Future Work Director Jim Stanford has prepared a detailed overview of Alberta’s Disappearing Advantage: a 50-page paper with comprehensive data describing the decline in real wages, falling real household incomes, and other indicators of Alberta’s relative decline over the past five years.
To reverse the ongoing decline in real wages, and recapture an Alberta Advantage for workers, the paper recommends the provincial government explicitly welcome higher wages as a sign of economic progress – rather than a danger to be kept down. And then implement specific policies to achieve that goal, including:
- An immediate increase of at least 15% in the provincial minimum wage, and further increases in subsequent years that match and exceed inflation.
- Reforms in labour laws to give workers more ability to form unions and negotiate better wages and conditions.
- Free collective bargaining for public sector workers (in major bargaining rounds occurring in the province this year).
- Stronger enforcement of basic labour standards for workers in insecure, temporary, or gig positions.
The paper was prepared for delegates at the Alberta Federation of Labour’s 20204 Midterm Forum in Calgary, May 18. Please see the full paper:
Alberta’s Disappearing Advantage: The Crisis in Alberta Wages, and How to Fix It
Jim Stanford
Jim Stanford is Economist and Director of the Centre for Future Work. He divides his time between Sydney, Australia and Vancouver, Canada. Jim is one of Canada’s best-known economic commentators. He served for over 20 years as Economist and Director of Policy with Unifor, Canada’s largest private-sector trade union.