Policychange in the minimum wage rate has raised controversial issues. Thishas been specifically observed in Alberta. In the first case, it issalient that to consider the background information concerning thedemographic of low-income earners in Alberta as from April 2015 toMarch 2016 (Tencer, 2). Noticeably, 77% of the workers who earn lowwages in Alberta are above the age of 20.Moreover, 35 % of the lowincome earners are in their prime years of earning. It can beobserved that women dominate the rank of Alberta’s lowest paidworkers, increasing minimum wage helps to close a systemic pay gapfor women. In regard to the Alberta government website, it can benoted that people earn income depending on the type of occupationworkforce. According to the 2014 individual total income, it can beascertained that high-income earners earn averagely $41570.On theother hand, the low-income earners earn approximately $19200 (Tencer,3).Owing to the recent statistics it is vivid to depict that thegeneral minimum wage rate of most employees is $12.20 in every hour.It is anticipated that in the year 2017 the minimum wage rate will be$13.60 per hour. Increasing the minimum wage will mostly benefit thelow income earners (Tencer, 6). Observably, it is depicted that anindividual earning minimum wage presently earns $1,923 less ascompared to the low income measure of the poverty line (Tencer, 2).
Similarly,in 2018 the minimum wage rate is predicted to increase by $1.40 inevery hour which will translate to $15 per hour (Tencer, 6).Additionally, the statistics reveal that the sales person includingthe certain professions and land agents get a minimum wage rate of$486 per week. The minimum wage rate in 2017 and 2018 is expected tobe $542 and $598 respectively. Owing to the low-income earners it isvivid to depict that over 38$ of them have children while 54% of thelow-income earners work full time.Noticeably,296,200 of the Albertansearn less than $15 per hour. In addition, it is evident to note thatthe majority of the low-income earners in Albertan are females whoaccounts for 62% (Tencer, 9).Interestingly, 78 percent of theindividuals earning low income have permanent jobs. Sadly, themajority of the individuals work for employers who have more than 150employees.
Thepolicy identified in this instance concerning the minimum wage rateof Alberta is that NDP government announced Alberta’s minimum wagerise from $11.20/ hour to $12.20 in October 2016, and also promisinga rise to $15 by 2018 (Shannon,620).Notably, it can be noted that thegovernment is making efforts to eliminate the wage differences andother employees.
Theunderlying question in this policy is who will benefit if theminimum wage rate is raised $15? .Principally, the economy isexpected to benefit from the increased minimum wage rates since thespending potential of low income employees is likely to be elevated.As such, they will get an opportunity to invest in the economy. Despite the fact that most might think people who earn minimum wageare young teens who still live with parents, but in reality over 80%of the people earning minimum wage are actually 20 years and older(Shannon, 624). They are mainly women, people who work full time andemployees who work for large corporations. As such, this implies thatthe adults are likely to benefit from the increase in the minimumwage rate. It is also salient to point out that women are the oneswho dominate the list of Alberta’s lowest paid employees. More than60% of the employees who earn below the minimum wage rate of $12 arefemales. For this reason, increasing the minimum wage rate will aidin closing the pay systematic gap for the females. Another rhetoricquestion arising is, what will be the effect of increasing theminimum wage rate for those workers earning above the minimum wagerates? What about the employers? Will they benefit? Perhaps theexcellent message for the employers is that they should not have thephobia of the $15 minimum wage rate. Drawing evidence from theresearch performed by the economists namely Jordan Brennan and JimStanford, they ascertained that the minimum wage does not have anyeffect on employment (Minimum Wage, 3). In other words, the studiesstrongly imply that the number of jobs will not decrease as a resultof the $15 minimum wage rate.
Now,let’s consider the benefits and problems associated with therecommended policy. In the first case, the policy is likely to bringabout stimulation of the economy. More money will circulate in theeconomy and the spending rate of people will increase. Additionally,job opportunities will increase following the minimum wage rate of$15 (Minimum Wage, 5).This is because when people spend more,businesses will get more revenues. As such, the firms andorganizations will be required to hire more people to manage theirrevenues in order to increase the sales. Reduction of expenses in thesocial programs is also another benefit that will emerge from theimplementation of the policy. Typically, it is true to presume thatthere will be a decreased amount of people who relied on theadditional support of government to run social programs to supportthemselves and their families, making fewer visits to the foodbank.Amazingly,the policy will decrease the turnoverrate.Understandably,this is because of increased minimum wage meanshigher employee satisfaction at work. Reduce staff turnover,recruitment and training expenses.
However,the policy has some flaws associated with it.For instance, it willlead to increased layoffs. The costs associated with the increase inminimum wage rates are high. Essentially, this is because employers,especially local businesses may have a tighter budget with minimumwage raised, meaning no longer can compensate the same number ofemployees at a higher rate (Minimum Wage, 7). On the same note, theprices of commodities will increase as a result of the increase inthe minimum wage rate to $15.This will be triggered by the fact thatthe price of products will increase in order to generate enoughincome to support the wage increase and the higher cost of living..Moreover, the rate of hiring employees will decrease. Typically, thisis because the employers may face a challenge of paying the employeesdue to the increase in the minimum wage pay (Minimum Wage, 9). Thedeployed policy will also discourage individuals from investing andopening new businesses in Alberta. Obviously, business people preferto open businesses in places where thy will incur less costs. Thisimplies that if the minimum wage rate increases to $15 per hourpeople will shift their businesses to places where the minimum wagerate is below $15. For instance, if we consider Apple Company, it isvivid that the company makes its phones in China. The rationalebehind its decision is that, China is cheaper when compared withother countries such as the USA and Canada. Therefore this suggeststhat people will opt opening businesses in other places other than inAlberta (Dias, 7).
Havingdiscussed this policy, it is evident to suggest that employers andworkers who earn less than a set gross income should be allowed toreceive a business tax reduction for the main aim of offsetting thewage increase. This will yield an equal playing field between largeand small businesses thus giving them an opportunity to survive.Important to note is that the increase in labor cost as a result ofminimum wage rates has less impact as compared to the costs thatemerge due to the hike in taxation rates (Dias, 9). Due to the factthat employers will have to incur extra labor costs following theincrease in the minimum wage rate it is imperative that they identifythe opportunities that are likely to enhance the productivity andefficiency. Reasonably, this will provide a chance for them tomaintain a powerful proposition that will aid them in keeping acompetitive advantage. Additionally, it is evident to elucidate thatthe small businesses will struggle in order to cope up with theincreased minimum wage rates (Dias, 9). For this reason, it will beimperative for the government to minimize the taxation rates of smallbusinesses. Significantly, this will offset the increase in wagesthus protecting the small businesses in Alberta.
Dias,Jerry. "Opinion: $15 Minimum Wage Makes Sense ForAlberta". Edmonton Journal. N.p., 2016:1-7 Web. 31 Oct.2016.
MinimumWage. Work.alberta.ca. N.p., 2016.1-8 Web. 31 Oct. 2016.
Shannon,Michael. "The Employment Effects Of Lower Minimum Wage Rates ForYoung Workers: Canadian Evidence." IndustrialRelations 50.4 (2011): 629-655. Business Source Complete.Web. 31 Oct. 2016.
Tencer,Daniel. "Wealthy Canadians Among Those Most Opposed To $15Minimum Wage". The Huffington Post. N.p., 2016:1-9 Web. 31Oct. 2016.