What Alberta Advantage?
A new report by economist Jim Stanford shows how working people in Alberta are experiencing unprecedented reductions in incomes, purchasing power, and living standards.
Alberta’s Disappearing Advantage: The Crisis in Alberta Wages and How to Fix It, published by the Centre for Future Work and released yesterday at the Alberta Federation of Labour’s mid-term forum in Calgary, shows how by many measures, the crisis in living standards “has been worse in Alberta than in any other province.”
Importantly, Dr. Stanford wrote, “these challenges have been made far worse by deliberate wage-suppressing policies of the Alberta government.”
“These policies have prioritized expanding profits for corporations and business by deliberately restricting wages and job security for workers,” the report said. “Those policies have ‘worked’: profits in Alberta have grown to unprecedented heights, while workers’ share of the economic pie (and their real living standards) have declined.”
Among the key findings of the report:
- Alberta is no longer the wage leader among Canadian provinces.
- Real purchasing power of hourly wages after inflation is down 5 per cent since 2018 – for public sector workers it’s down as much 10 per cent.
- Despite record profits, real wages in the petroleum and mining sector are down.
- Alberta has the slowest wage growth among all provinces but equally high inflation.
- The share of the Alberta economy going to labour compensation has dropped by eight percentage points, while the share going to corporations has skyrocketed – a “perverse redistribution” of wealth.
- Calgary and Edmonton are among the costliest Canadian cities to live in.
But the effects of the province’s wage-suppression policies suggest there should be longer-term concerns about Alberta’s economy, the paper argues.
There has been a loss in innovation momentum and falling productivity, Dr. Stanford concludes. “In contrast to the business-oriented rhetoric of the government, it is clear that its policy mix of favours for corporations, deliberate wage suppression, and austerity and privatization in public services, has undermined genuine growth, productivity, and progress.”
With close to 250,000 unionized public and private sector workers in negotiations for new collective agreements, the report argues that 2024 presents a unique opportunity “to repair the damage to their living standards since the pandemic, to protect against the effects of future inflation, and to gain a share of future economic progress and productivity growth (through gradual real wage gains).”
We can count on it, of course, that the government of Premier Danielle Smith or its army of anti-union online bots won’t see things quite that way.
Real wage losses in the public sector have been particularly severe, Dr. Stanford wrote. “For them, the damage to living standards was amplified by aggressive wage suppression strategies wielded by provincial negotiators during past rounds of public sector bargaining (in 2020 and 2021).
“Various top-down wage restrictions – including secret ‘mandates,’ threats of fines for employers, threats of legislation to block work stoppages, and more … made things worse.
“Public sector workers won cumulative wage gains of just 3 to 4 per cent over multi-year contracts, just as inflation accelerated,” he said. “These workers thus experienced a historic (and predictable) decline in their real wages: of as much as 10 per cent since 2020.”
As a result of the sustained weakness in wage growth, the report says, “Alberta’s once-vaunted superiority in wages is evaporating – and quickly.
“In 2013, average hourly wages for hourly employees were 17 per cent higher in Alberta than the Canadian average. The ‘Alberta advantage’ in this regard was obvious and undeniable. Today that advantage has shrunk to just 3 per cent.”
Alberta’s GDP is much higher in per-person terms than the Canadian average and the cost of living is also higher than most provinces, the report notes. “Those factors suggest that wages should be higher in Alberta than elsewhere – yet that wage superiority, once taken for granted, has now largely disappeared.”
To counter the slide, Dr. Stanford suggests boosting minimum wages by at least 15 per cent, reforming labour laws to make it easier for workers to join unions, respecting the principles of free collective bargaining in the public sector, and strengthening the enforcement of basic labour standards.
Dr. Stanford, a native of Edmonton, is director of the Centre for Future Work and is the Harold Innis Industry Professor in Economics at McMaster University in Hamilton, Ont. He is an honorary professor in the Department of Political Economy at the University of Sydney, Australia.
He received his PhD in economics from the New School for Social Research in New York and holds a masters’ degree from Cambridge University.
The only Alberta advantage remaining may be relative housing affordability. Evident particularly to younger people fleeing Vancouver and the GTA in droves for Calgary, Edmonton and elsewhere. However that advantage too is now diminishing and I doubt the droves coming here will be the most enthusiastic supporters of the current Alberta government, particularly when they find out the minimum wage and other wages here are not so great.
No doubt this news will make those who came to Alberta in the past for higher wages even crankier. So in response the Smith communications crew will probably do what it does best, create yet another conflict with some other level of government, to try distract attention away from this.
This approach seems to have worked for Smith so far, but in politics something often works until it suddenly stops working. At some point Albertans are going to start wondering why in this still relatively well off province, they do not feel very well off any more and start looking at the reasons closer to home.
It’s lucky that David Parker’s TBA government cult members are so easy to manipulate and consistently vote against their interests. Suckers.
I wonder how the Alberta chapter of Restaurants Canada (the restaurant lobby group) feels about the issue of raising the minimum wage.
I remember when the NDP made the (in Restaurants Canada’s mind) radical step of pushing the minimum wage up to $15/hour, Restaurants Canada went apoplectic. I heard a representative of the group on an open line radio show repeating ad nauseum how the wage increases (the NDP raised the minimum wage in stages before it reached the $15/hr that they had campaigned on) were ‘too much, too fast’.
The fellow made a compelling case, until I remembered how, prior to the NDP winning the election, Alberta’s minimum wage was the lowest in Canada, and even the Progressive Conservative politicians would acknowledge that Alberta’s minimum wage needed to be raised, but then fell back on their standard talking point, ‘now is not the time’.
If I knew how to access/interpret the provincial government’s lobby record, it would have been satisfying to call the radio show and (assuming RC had lobbied the PC government to keep the minimum wage suppressed) point out that the big jump in the minimum wage the NDP had brought in had become necessitated by the PC government’s refusal to implement small, manageable increases to the minimum wage on a regular basis.
If we can take as a given that minimum wage needs to be increased as the cost of living increases, how would Restaurants Canada like to see those increases implemented? Would they like small manageable increases, or big jumps when the situation finally demands it? I expect their lobbying efforts will show their preference.
Bob: As far as Restaurants Canada is concerned, there is never a good time to raise wages. Interestingly, though, the leaders of the Alberta branch of the organization choose to live and work in Vancouver, which, as much as our premier would like a saltwater port, is not part of Alberta and never will be. Never forget that Restaurants Canada got its start in World War II under a different name campaigning against restaurant owners paying their fair share of the cost of defeating Hitler. DJC
The good people of Alberta, especially the men folk, have a childlike obedience to authority figures. If Premier Marlaina Kolodnicki says that the disappearance of what used to be the Alberta advantage is a good thing for Albertans, they will believe it. Make no mistake about it, Kolodnicki and her barking seals in Cabinet will be saying so in many different forms until the next election. All the UCP has to do is fascinate the fools to stay in power.
“Real purchasing power of hourly wages after inflation is down 5 per cent since 2018 – for public sector workers it’s down as much 10 per cent.”
Trickle-down economics: the Alberta UCP government wants wages and buying power to trickle down to nothing. It’s bound to get worse when health care is privatized.
Now, remind me why the premier wants the population to grow enormously during a housing crisis. Right, to prop up the economy. So what if the hamsters have to run faster and faster until they fall off their wheels.
From the benches of the current governing group just off 109th St., “Why couldn’t he just stay in Australia?”
Bruce: He was born here in Edmonton and his first two degrees are from the University of Calgary. I’m pretty sure his father was the president of a Calgary-based oil company. It’s interesting how so many of the real Alberta-firster types seem to have been born in in Ontario. DJC
One of my favourite economists. All true, all good analysis. Except Albertans don’t care or are in denial perpetuated by Denial Smith. How do we engage workers drawn to ucp? Gil McGowan has a plan but he’s no longer in leadership contest. Each candidate should be nailed on this issue next debate.
Looks like Alberta has come to the ‘right to work’ mantra late, and here we are.
Wage suppression and legislation that breaks the back of organized labour is faster turning Alberta into the equivalent of Mississippi. And to only add to the crazy, there is a UCP sponsored youth event in Lacombe-Ponoka, which proudly announces the free event for ages 14 to 25. (?!) Yes, that is the age range invited to attend this event. Sounds an opportunity for courting child brides. I mean seriously. The desire to join Mississippi at the bottom is that strong?
And, as a humorous aside, this weekend’s ‘Axe the Tax’ camp out and music festival took place at a turnoff near Red Deer’s ‘Gasoline Alley’. Yes, call it Ditchfest, if you will. Anyway, the thin crowd was greeted by a special guest, UCP MLA Shane Getson. Getson, interestingly enough, arrived in a stretch black limousine, no doubt to make an impressive entrance for the august event. Getson addressed the tiny rain-soaked crowd, before deciding he should move his address indoors. Once inside a small room, the tiny crowd seemed a lot bigger and Getson wasn’t so embarrassed after all. And in the middle of Getson’s rousing call to arms against the tax, he admitted that it maybe impossible to axe the tax, for reasons. Clown Party, indeed.
The “Youth spring dance and social” has been cancelled after numerous concerns were expressed. Some have pointed out various political parties have youth sections with a similar age spread, but maybe they don’t put on dances that sound more like grooming events than political activities?
The UCP simply does not care about the plight of everyday Albertans. Their rich friends matter more.
It is a testament to the power of negative rhetoric and story telling from successive ‘conservative’ governments, that while all of the above may be true, the old-time populace of born and bred Albertans have been taught and cling to the tale that the federal government is to blame for everything. Even my aged Alberta born mother who hasn’t lived here for 60 years, blames the feds for every ill that has supposedly befallen this province. Is it something in the water, drunk from birth on, that ‘vaccinates’ them from any ability to see reality?
Given the intent of vaccination is to prevent illness, it’s probably more accurate to say some Albertans have been ‘noculated’ with anti-fed/anti-union chauvinism.
Conservative governments have been putting the boots to Alberta workers for a long time. Under the UCP, it may be getting even worse.
So, can someone explain to me why, as ex-NDP leadership candidate Gil McGowan and others have pointed out, Alberta workers have for so long largely refused to support the NDP.
This bizarre anomaly goes back to the grand, old days of Peter Lougheed, and Social Credit before him.
Since coming here as an immigrant almost 60 years ago, it has never ceased to amaze me what it is about Alberta that makes so many people consistently
vote against their own interests.
Excellent job Mr. Clemenhaga
All of the above is so true and so so sad. For Alberta. Literally “they” do not know enough to get in out of the rain.
Thoughts on this Alberta AccountabilityAlliance holding an Alberta wide protest on May 25/24 – has anyone else heard of this group?*See below
ENOUGH IS ENOUGH! DAY OF ACTION ON MAY 25TH
Rallies in multiple locations are being organized by grassroots community members in a province-wide Day of Action on May 25th.
People in every corner of Alberta are reacting to the provincial government’s unprecedented overreach into local governance, deviation from campaign commitments, and legislation based on partisan ideology instead of the priorities of Albertans. The need for citizens to speak out has gone beyond political preference and has become a fight for our future and the democratic principles we value.
WHEN: Saturday, May 25, 2024 at 2:00 p.m.
WHERE: Grande Prairie, Edmonton, Vermilion, Red Deer, Sylvan Lake, Calgary, Medicine Hat, Lethbridge or Watch Online at EnoughisEnoughUCP – YouTube
WHY: It’s time for change. It’s time for a government that truly represents the interests of all Albertans, present, and future. Join us as we mobilize and demand accountability. This is democracy in action.
Statement from the group’s Facebook page:
We’re here to unite concerned citizens of Alberta in a movement against the current government, the United Conservative Party (UCP), because Enough is Enough.
We believe that the UCP has let us down across various fronts, failing to prioritize the needs of everyday Albertans. Whether it’s healthcare, electricity pricing, forest management, climate change, education, housing, the cost of living, renewables, or any other issue affecting our province, we share a common frustration: our government isn’t working for us.
Enough is Enough! Together, let’s make our voices heard and build a better future for Alberta.
#EnoughIsEnoughUCP #ThisIsWhatDemocracyLooksLike #May25 #EnoughIsEnough #MakeGoodTrouble #EnoughIsEnoughAB
FIND MORE DETAILS ON THEIR WEBSITE: https://www.enoughisenoughucp.ca/
You’re welcome to share these events, invite friends, or organize one of your own if you don’t see one happening near you. Remember to dress for the weather and bring along a sign, flag, or noise maker!
*Please note: the AFL has not been involved in the planning of these events.
You can direct questions to: [email protected]
We need a plan to invigorate workers and get them on the progressive voting side. A strategic plan. Election is only a short time away in political action terms. Maybe start with a goal that’s easy to organise around and could build support and momentum, something simple like Raise the minimum wage!
Get every union, worker, union or not to get its members in workforce to endorse it through physical letter signing. Have them each tell their story in a paragrah. Individual letters/emails printed out. My wages are so low that..
I support raised wage floor because…
Have as many as you can get to the ledge and present their stories one after the other.Filibuster. Or stage it on the steps as a media event. Invite NDP allies. Hell invite Smith and her MoL.Dump the letters in a massive show at the ledge to the Min of Labour and Smith. Make the ucp justify their bs for a change. A grand media gesture. Followed by more actions…Action that grabs attention, is positive and is FOR change. Start there.
The report misses the most important factor: maturation of the O&G industry. In the past, O&G companies re-invested significant amounts of their earnings into expansion which drove hiring and hence wages. Now the industry distributes a greater percentage of its earnings to equity and debt holders.
Alberta needs to attract new investment and the best way to do that is through low taxes and streamlined regulation. Paying public servants more would push the Province in the opposite direction.
Alberta WAS experiencing a mini boom in green energy, the UCP killed it dead, because of the oil and gas industry, by hamstringing it with regulation, it has nothing to do with ALBERTA ALREADY BEING one of the LOWEST TAXED PLACES IN NORTH AMERICA. You’re either a charlatan or a muppet I haven’t figured out which it is yet.
There isn’t even an Alberta Advantage for housing realistically for young people. Maybe Gen X and up or very well-paid professionals coming here. The people coming to Alberta for housing are already extremely well-off in general. They probably already have a property they are selling for huge coin to buy one in Alberta, raises prices even further for those here. To say it’s even remotely affordable here for young people is a joke. If we can’t get paid properly for our work and have a future, many who can will leave and I’ve already left myself, at least for now.