Following Saskatchewan’s minimum wage increase last year, Alberta’s entry-level pay is now the lowest in the nation.
Rachel Notley’s NDP government last raised the hourly minimum in 2018. Since then, it has remained frozen at $15 per hour for adults and $13 per hour for those under 18.
The United Conservative Party government says it has no immediate plans for a raise, while other provinces have scheduled annual increases.
However, in a post-pandemic economy facing concerns about a potential recession, can the minimum wage be raised without disrupting the labour market?
Background
Nathan Neudorf, Alberta’s minister of affordability, stresses that youth unemployment is at “extremely high levels” to justify keeping the prairie province’s minimum wage unchanged.
“The province’s minimum wage cannot be increased due to economic uncertainty,” stressed a spokesperson for Jacob Schow, Alberta’s minister of jobs, economy, trade and immigration, in an email statement to the Calgary Journal.
“The UCP government must take an approach that balances the needs of Alberta’s workforce while ensuring businesses are not burdened with increased costs that put jobs at risk,” added the spokesperson.
The governing UCP inists hat the NDP’s wage increase “cost youth in Alberta an estimated 21,000 jobs” and that “the majority of those workers who earn minimum wage are young Albertans still living at home.”
Alberta’s youth (15 to 24 years old) unemployment rate in 2025 was 16.5 per cent compared to the national average of 12.8 per cent.
Did the NDP’s minimum wage increase result in 21,000 lost jobs for youth?
The UCP cites job losses among youth as a key reason against a wage increase.
According to a 2020 report by the UCP government on the effects of the NDP wage increase, the number of jobs across all demographics increased almost every year during the 2015-2018 period when minimum wage increases were phased in.
In that same report, the panel estimated that increases in the minimum wage led to employment losses of 21,224 among those aged 15 to 24.
The analysis found that, on average, a 10 per cent increase in the minimum wage is associated with about a 3 per cent decline in employment among those aged 15 to 19.
However, for those aged 20 to 24 years, a 10 per cent increase in the minimum wage was associated with a 0.7 per cent decline in employment.
The report suggested that there were only two exceptions to job losses, but both were followed by job increases in the following years.
Among 15 to 17-year-olds, minimum-wage employment dipped for one year in 2017 before rising again in the next year. This pattern was also seen among workers aged 40 to 44 in 2015.
Wage compression
But it’s not just unemployment. With the minimum wage increase, more Albertans are now stuck at the new minimum wage.
An increase in the hourly minimum wage usually creates a ripple effect in which employees who used to earn slightly above the minimum wage now earn it.
This happened in Alberta.
After the wage increase, the UCP report shows that the number of employees earning minimum wage went up by almost 90,000.
Who is earning minimum wage?
Schow’s statement added that “The majority of those workers who earn minimum wage are young Albertans still living at home.”
But for many young people, living at home isn’t a choice.
Nelson Edwards, a student at Mount Royal University, had to move back in with his parents due to the surging cost of living.
“Rent’s expensive. Cost of living is going up. Groceries going up. Everything’s going up,” said Edwards. “I don’t think that the raise that I’m going to get soon is going to even match. I might just match inflation.”
Edwards questions whether $15 per hour is enough in 2026.
“I make quite a bit more than minimum wage, and even I’m definitely feeling a squeeze,” adds Edwards. “I don’t think anybody that’s making minimum wage would be able to afford to live comfortably, the way the economy is right now.
He is not alone. A 2023 Government of Alberta report finds that younger people are disproportionately affected.
The Alberta Minimum Wage Profile reports that about 66 per cent of workers earning the minimum wage in Alberta in 2023 are under 30.
The same report also shows that about 63 per cent of workers earning minimum wage are not teenagers, and that about 74 per cent of workers are in permanent jobs.
The report also found that 53.4 per cent of workers earning the minimum wage do not live with their parents.
Purchasing power and inflation
While employment stats form the basis of the government’s position, factors such as inflation need to be considered.
Statistics Canada found that younger Canadians are increasingly falling behind as inflation grows.
In spring 2024, a report found that a majority of young adults (ages 25 to 44) reported that inflation was greatly affecting their ability to afford the basic necessities.
Minimum wage vs Living Wage
Advocacy groups argue that the current minimum wage does not accurately reflect the current cost of living.
Alberta’s Living Wage Network estimates that the living wage in Alberta is $26.50, defined as “the hourly wage a worker needs to earn to cover their basic expenses and participate in their community.”
Gil McGowan, president of the Alberta Federation of Labour, says that in practice, the negative effects of a minimum wage increase are very few and that job losses rarely occur.
“The Notley government increased the minimum wage in Alberta quite dramatically, but the sky did not fall,” said McGowan. “In fact, there were more people working in the low-wage service sector in our province than ever before.”
Alberta is the only province or territory without minimum wage increases tied to inflation.
Alberta’s minimum wage is frozen at $15 per hour, and inflation has increased by 24 per cent since the last minimum wage increase.
“The difference was that they were being paid a higher wage and their purchasing power was keeping up with inflation in a way that it hadn’t before and that it hasn’t been keeping up since,” continued McGowan.
According to the Bank of Canada’s inflation calculator, if the $15 per hour minimum wage were indexed to inflation, it would rise to $18.55 in 2025.
However, in terms of purchasing power, $15 worth of goods in 2018 is worth about $11.35 today.
Should the minimum wage be increased?
Justifying a minimum-wage increase, McGowan says that workers often spend their paycheques in the local economy, thereby stimulating economic activity.
“In economic speak, it increases the velocity of money you put in. If you put it in [the workers’] pockets, because they don’t have much room for saving, they spend it right away, often in the businesses where they work.”
Salimah Valiani, a researcher at the Parkland Institute, similarly argues that a minimum wage increase is necessary to stimulate economic demand.
“If we bring wages up to a living wage, well, then you’re going to have that fuel of demand in the economy, and that will jumpstart things to create yet more jobs,” says Valiani.
“It’s up to us as to whether we want to move from this ever-decreasing wage for workers in Alberta, because we know that wages are going down across the board,” continues Valiani. “[if we] stay on that road, then we will get ourselves into an economy which has less demand and less activity.”
McGowan’s AFL has repeatedly called on the UCP government to raise the minimum wage to $20 per hour, saying, “the minimum wage is supposed to be a floor that holds everyone up, but under the UCP, it’s become an anchor that’s dragging everyone down.”
He adds, “raising the floor for minimum wage workers means raising the floor for other workers as well.”
Is youth unemployment a reason to keep Alberta’s minimum wage at $15?
Alberta’s youth unemployment rate in 2025 was 16.5 per cent, higher than the national average.
The governing UCP stresses that high youth unemployment rates justify keeping Alberta’s minimum wage at $15.
In 2015, when the NDP government announced an increase in the minimum wage from $10.20 per hour to $15 per hour, business groups warned of significant job losses.
The Canadian Federation of Independent Business estimated that between 53,500 and 195,000 jobs would be lost resulting from the increase.
During that time, about 350,000 workers earned less than $15 per hour.
An upper estimate of 195,000 job losses would have resulted in over half of those workers becoming unemployed.
However, according to the economic data, job losses of that magnitude did not happen.
The data actually suggests that about 21,000 jobs were lost between 2015 and 2018.
The 2014 oil crash and subsequent economic recovery, however, could have impacted economic data.
“It was ludicrous to suggest that half of those jobs would disappear,” said Valiani.
Valiani points out that according to the 2024 Alberta Minimum Wage Profile, about 5 per cent of workers in Alberta earn the minimum wage. About 66 per cent of those workers are more than 19.
“Simply increasing the minimum wage is really a drop in the bucket in terms of allowing people to survive with the basics,” added Valiani.
While youth unemployment remains high compared to other provinces, the available data do not show that previous minimum wage increases led to the widespread unemployment predicted by the UCP government and business groups.
Although the minimum wage panel estimated that about 21,000 jobs were lost by youth, the evidence did not clearly demonstrate that maintaining the $15 minimum wage is necessary to protect workers, as the majority of minimum wage earners are more than 20.