Alberta was right to kill the minimum wage bill

Bill 201 would have repeated the Notley-era minimum wage policy that led to declines in youth employment

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When the Alberta NDP’s minimum wage proposal died at second reading last November, the party leadership predictably cried foul, accusing the government of voting “against workers.”

But the evidence from California’s recent experience and Alberta’s own 2015 to 2018 experiment supports the government’s position: minimum wage mandates destroy the jobs they claim to protect, and they hurt young workers most of all.

Bill 201, an Alberta NDP private member’s bill, would have raised Alberta’s minimum wage from $15 to $18 over three years, while eliminating the youth wage differential (which allows employers to pay workers under 18 a lower minimum wage) to “restore fairness.” We’ve seen this movie before, and it ended with shuttered restaurants, unemployed youth, and workers worse off than they were before.

California raised fast-food wages from $16 to $20 per hour in April 2024. Ten months later, the sector had shed roughly 18,000 reported jobs. Workers who kept their jobs lost up to five hours per week, equivalent to about $4,000 in annual income. Fast-food prices spiked by about 14.5 per cent, nearly double the national average. The wage increase, meant to help workers afford groceries, instead made eating out more expensive while eliminating thousands of jobs.

Albertans don’t need to look south for cautionary tales. When former Premier Rachel Notley raised the minimum wage by 47 per cent between 2015 and 2018, University of Alberta labour economist Joseph Marchand estimated roughly 25,000 lost jobs. His peer-reviewed research confirmed significant employment losses concentrated exactly where economic theory predicted: among young workers and rural communities. Workers aged 25 and older showed no significant job losses, but youth aged 15 to 24 experienced statistically significant declines.

This pattern isn’t coincidental. When governments mandate wages above what a worker’s productivity justifies, employers face a brutal calculus: absorb the cost, cut hours, raise prices, automate, or don’t hire. For experienced workers, employers often absorb the cost. But for teenagers seeking first jobs, employers increasingly choose not to hire.

Entry-level jobs aren’t just paycheques. They’re classrooms where young workers learn punctuality, responsibility, and teamwork. When minimum wage mandates price these workers out, they lose more than income. They lose the experience that builds careers.

The timing of Notley’s increases was catastrophic. Oil had crashed, Alberta was in recession, and the government imposed massive wage increases on struggling businesses.

For many Calgary businesses, higher mandated wages collided with sharply rising municipal costs. Then-Calgary Mayor Naheed Nenshi oversaw property tax increases that squeezed businesses and far outpaced inflation. Restaurant owner Darren Hamelin faced a 97 per cent property tax hike; his Escoba Bistro closed after 20 years. Abruzzo Ristorante shuttered after 29 years, citing ever-increasing city property taxes.

Albertans should understand exactly what the NDP wanted to repeat. Bill 201 contained no regional variation, despite clear evidence that rural areas bore disproportionate job losses. It contained no economic conditionality, meaning increases would have proceeded regardless of whether Alberta was booming or busting. Most remarkably, it would have eliminated the youth differential entirely, ensuring young workers faced even higher barriers to employment.

The evidence clearly showed that youth aged 15 to 24 bore the brunt of employment losses from the 2015 to 2018 increases. The rational response would be to maintain or expand the youth differential. Instead, Bill 201 proposed eliminating it. Many New Democrats favour lowering the voting age to 16, yet they would harm the very people whose votes they hope to court.

If politicians wanted to help workers afford life’s essentials without destroying jobs, there are proven alternatives: lower income taxes on the first $50,000 of earnings so workers keep more from hour one and eliminate carbon taxes that hit low-income workers hardest. These policies help all workers without destroying any jobs.

But progressives oppose such solutions because their ideology prizes control over outcomes. They prefer mandating how much employers must pay rather than letting workers keep more of what they earn.

Bill 201 was political theatre designed to fail. The real test comes when Albertans decide whether to implement policies already proven destructive, crushing Calgary businesses while minimum wages climb, learning little from documented job losses.

The Smith government made the right call. Alberta’s minimum wage has remained stable since 2019 because legislators learned from the Notley-era disaster. The compassionate-sounding promise of higher mandated wages consistently delivers the opposite of its stated intent: fewer jobs, reduced hours, and closed businesses.

The minimum wage bill deserved to die. The ideas behind it should stay buried.

Marco Navarro-Genie is vice-president of research at the Frontier Centre for Public Policy and co-author, with Barry Cooper, of Canada’s COVID: The Story of a Pandemic Moral Panic (2023).