A living wage reflects what earners need to bring home based on the actual costs of living in a specific community. Living wages are rooted in the belief that individuals and families should not just survive, but be able to live in dignity, and participate in their community. The living wage is defined as the hourly wage a worker needs to earn to cover their basic expenses and participate in the community.

The minimum wage is the legislated minimum set by the provincial government. Thousands of families making the current minimum wage in Alberta are still living below the poverty line and are unable to lift themselves out of poverty. A living wage calls on governments, employers, and community members to ensure that workers can make ends meet in their communities  and that parents can earn what they need to support their families.

Some key differences:

• The minimum wage is the same across the province. Living wage reflects what people need to earn to cover the actual costs of living in their community.
• The minimum wage is mandatory for many occupations. The living wage is a voluntary commitment of employers to go beyond the minimum standard and pay enough for employees to cover their expenses and participate in community.
• For years the minimum wage has been too low to lift even someone working full-time above the poverty line. The living wage is based on the principle that if you work full-time for a full year, you should earn enough to make ends meet and participate in your community.

The last time minimum wage was changed was on October 1, 2018 when minimum wage was raised from $13.60/hour to $15/hour. On June 26, 2019, the Albertan government implemented a new minimum wage of $13/hour for students under 18. 

In comparison to Alberta, BC raised minimum wage to $15.75 on June 1, 2022 and Ontario raised minimum wage to $15.50 on October 1, 2022. All provinces and territories, except for Alberta, have increased minimum wage in 2021 or 2022. 

Studies show that businesses usually absorb cost increases related to living wage policies through a combination of price and productivity increases, reduced turnover and redistribution of staff. When B.C. raised its minimum wage more than $2 per hour in a relatively short amount of time, there was a very small (1.6%) reduction in the employment rate for youth between the ages of 15 and 24 and we can’t be sure that this 1.6% reduction was entirely due to the change in minimum wage or if there were other factors.

There are a lot of examples around the world of cities raising wages in a meaningful way, including Vancouver, Seattle and London in the UK. In these jurisdictions, increases in wages for the lowest paid in society actually resulted in increased spending power and reduced inequality.

Some communities saw a bigger increase in their living wage rate between 2021 and 2022 than previous years for the following reasons:

• There has been record inflation rates, which means the prices of goods and services have increased more than usual.
• The living wage rates in 2021 and previously have usually been based on the income needs of a family of four; in 2022 we broadened it to be based on three household types: (1) a family of four, (2) a lone-parent family with one young child, and (3) a single individual living alone. The income needs for a lone-parent family and a single individual living alone can often be higher than for a family of four with two working adults, so this would push the living wage higher compared to previous years.
• We made some additions to be more consistent with how Ontario and BC calculate their living wages. For example, we’ve added an amount for life and critical illness insurance and increased mobile services to include 5GB of data on a 4G network.

To begin the certification process, first fill out the Living Wage Employer Application Form. If all staff aren’t currently paid a living wage, employers must provide a Living Wage Implementation Plan as part of their application. 

Once the application is reviewed and we have confirmed that conditions are being met for becoming a Living Wage Employer, both the employer and Alberta Living Wage Network will sign the license agreement. Employer fees are waived for the first year. An annual employer fee will be paid at the first-year anniversary of the date of recognition and will be due each subsequent year on that anniversary.

The license agreement is a legal document that outlines the obligations and responsibilities the Alberta Living Wage Network has to the Living Wage Employer, and what those employers agree to do in order to maintain recognition.

The cost varies by size and sector, starting at $50/year for the non-profit and private sector with fewer than 10 employees. For full details of the cost please refer to the Alberta Living Wage Employer Guide. 

Employer fees are waived for the first year of certification. 

There are several reasons that employers pay living wages across the province and in Canada, these include happier workers, less turnover, and fewer missed work days. Many also consistently report that they feel it’s the right thing to do.

Research has found that living wage employers also cut costs when it comes to hiring and training new employees. A Harvard Business Review article compared the turnover rate at Costco (paid a living wage) and Walmart’s Sam’s Club (didn’t pay a living wage), where the turnover rates were 17% and 44% respectively. The cost of replacing a worker was 1.5 to 2.5 times the worker’s salary, meaning Sam’s Club would see an annual cost of $612 million compared to Costco’s $244 million.

There are many businesses and organizations that see the value of paying a living wage. Many of them are vocal advocates for paying a living wage and the value of decent work as well. The Alberta Living Wage Network certifies employers representing a variety of sectors including retail, finance, manufacturing, tourism, health care and media.

A certified Living Wage Employer must pay all active full-time, part-time and contract employees a living wage for their area. Employers also must insert a living wage clause in all new contracts with external service providers. 

Employers may offset the living wage rate by providing benefits that affect basic needs, such as health care plans. Paid days off above the legislated minimum are also credited toward their effective pay.

Each person’s living situation is unique, and the living wage rate isn’t meant to be an exact representation of each individual’s circumstances.

The living wage is an indicator for community affordability and livability based on the best data available for each community. Previous calculations were based on the Canadian Living Wage Framework, which specifies using a family of four in the calculations. We’ve expanded this to include lone parent and single individual households to reflect multiple situations where people may have access to different government benefits and taxes and would be affected differently by policy changes (e.g., improving child care affordability will affect each household type differently). 

Also, calculating and publishing different numbers for different family types could be confusing and could create conditions where employers are asking employees about family situations for different wage structures.

We use a weighted average because wages should not be based on family composition or lifestyle, so we are combining the numbers into just one rate per community that employers need to pay to be eligible for living wage certification.

This 2017 Bank of Canada staff analytical note looked at what would happen if provinces went ahead with their scheduled minimum wage increases (e.g., Alberta was scheduled to increase minimum wage from $12.20 to $13.50 in October 2017 and then to $15 in October 2018). They found that the scheduled minimum wage increases would contribute to inflation by roughly 0.1 percentage points in 2018. This means that when the lowest paid workers get a raise, it has a very small effect on the prices of goods and services.