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Graduate Studies Master of Public Policy Capstone Projects
2018-08-30 An Examination of Alberta’s Minimum Wage
Kosiorek, Keyli
Kosiorek, K. (2018). An Examination of Alberta’s Minimum Wage (Unpublished master's project). University of Calgary, Calgary, AB. http://hdl.handle.net/1880/109307 master thesis
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MASTER OF PUBLIC POLICY CAPSTONE PROJECT
An Examination of Alberta’s Minimum Wage
Submitted by: Keyli Kosiorek
Approved by Supervisor: Trevor Tombe
Submitted in fulfillment of the requirements of PPOL 623 and completion of the requirements for the Master of Public Policy degree.
[ i ]
Acknowledgements
I would like to express my gratitude to my supervisor Dr. Trevor Tombe for sharing his wealth of knowledge and providing me with guidance and support throughout my capstone process. I appreciate you accommodating our last-minute meetings from across the country and province, your critical feedback, and the time you spent supporting me in other endeavors. Your sincere desire for me to succeed has not gone unnoticed, thank you.
Thank you to my MPP classmates. This year could not have been the same without all of you, our inside jokes, and our nights out after exams. I wish you all the best in the future and I look forward to our continued friendship.
Thank you to the School of Public Policy faculty for providing our class with the tools we required to complete the program and our capstone projects and help us advance our careers in policy work. I am so glad I made the choice to pursue the MPP program.
Matthew, thank you for editing all my papers this year, taking me out for ice cream when things got tough, and always being my best friend.
Most importantly, a heartfelt thank you goes out to parents. Words cannot begin to describe the overwhelming gratitude I feel for the constant encouragement and love you give me. Thank you for instilling in me a strong passion for learning that has brought me to where I am today.
“Sometimes I’ll start a sentence and I don’t even know where it is going. I just hope to find it along the way”. – Michael Scott
[ iii ]
Table of Contents
Introduction ...... 1 Minimum Wage Background ...... 5 The Minimum Wage & It’s Purpose ...... 5 Minimum Wage in Canada ...... 5 Alberta’s Minimum Wage over Time ...... 8 Who earns the minimum wage in Alberta? ...... 9 Proposed Changes to Alberta’s Minimum Wage ...... 11 Saskatchewan: Minimum Wage Indexed to CPI ...... 11 Economic Theory ...... 12 Minimum Wage in a Competitive Labour Market ...... 12 Elasticity of Demand ...... 16 Literature Review ...... 20 The New Jersey Minimum Wage Study ...... 21 Canadian Studies: 1979-2005 ...... 22 Non-Canadian Studies on Minimum Wage and Employment ...... 25 Canadian Studies: 2005-today ...... 25 The Effect of Minimum Wage on Labour Market Flows ...... 27 Minimum Wage and Poverty ...... 29 Empirical Model ...... 29 Data and Methodology ...... 30 Results ...... 32 Discussion ...... 34 The Cost of the Minimum Wage ...... 34 Alternative Anti-Poverty Policies ...... 35 Alberta and the $15 Minimum Wage ...... 37
[ v ] Conclusion ...... 38 Policy Recommendations ...... 38 Bibliography ...... 40 Appendix A ...... 47
[ v ]
Executive Summary
Throughout its history, the minimum wage has always been a controversial policy.
Politicians, economists, businesses and citizens are continually engaged in debates over its effectiveness and its unintended consequences. Initially designed to protect workers from exploitation, the minimum wage has been gaining popularity as an anti-poverty tool. In fact, in recent history there has been a $15 minimum wage movement taking place across North
America that aims to put more money into the pockets of those in need and thus reduce poverty.
In 2015, under the newly elected NDP government, the Government of Alberta implemented the $15 minimum wage policy. Their plan to reach $15 consisted of a 47% increase of the minimum wage in just 3 years. Alberta was the first province in Canada to implement such a policy, but since then, Ontario and British Colombia have followed in their footsteps.
There is an abundance of research on the minimum wage from both the US and Canada, much of which is focused on the impact of the minimum wage on employment. While researchers have not reached a consensus on the magnitude of the effects, most agree that increasing the minimum wage has a negative impact on employment, especially for low-skilled workers and youth. While the research is plentiful, there have been no studies that have
[ vi ] examined the impact of the $15 minimum wage movement on employment. Additionally, there has been no study that has looked at Alberta specifically. This paper adds to the existing literature by analyzing the impact that a rapidly increasing minimum wage has had on employment and unemployment in Alberta.
To understand the effects of Alberta’s increasing minimum wage on employment and unemployment, I used a natural/observation study of Alberta and Saskatchewan. Alberta was the treatment group in my study because its minimum wage increased significantly starting in 2015.
Saskatchewan was the natural control group in my study because they did not increase their minimum wage arbitrarily and only adjusted it slightly each year for inflation. Because the two provinces are so similar in many ways including industry, political landscape, Saskatchewan’s data became the baseline measure of the experiment. Thus, any changes in Alberta’s employment rates that were not seen in Saskatchewan could attributed to the increase in minimum wage that Alberta experienced.
For my study I used pooled time-series data collected from the Canadian Labour Force
Survey to compare the two provinces in a regression analysis. The analyses were run on four different age groups: 15+, 15-24, 25-54 and 55+. The results from my empirical analysis were consistent with previous literature with coefficients for the employment rate between -0.068 and -0.434 for the period between 1997 and 2017 in Alberta. I also found coefficients for the unemployment rate between 1.064 and 2.327 in the same time period. These results indicate that the increase in the minimum wage in Alberta resulted in a reduction in the employment rate and an increase in the unemployment rate.
[ vi ] In addition to this empirical analysis, I looked at the cost of Alberta’s minimum wage increases since 2015. I calculated that the increase from $10.20 to $15 per hour will cost
Albertans over $725 million. This is over four times the cost of tax benefit programs such as
Alberta’s Family Employment Tax Credit. Such programs are better targeted towards those who need support. In this section of my paper I compare these two policies and the pros and cons of each. It is important to consider the costs and benefits of each policy prior to implementation to ensure that all objectives are being met and that the policy does not create more harm than good.
I conclude my paper with three suggestions for policy makers to consider when developing minimum wage policy: First, I suggest that policy makers should have a clear understanding of who earns the minimum wage prior to making any changes. Secondly, I suggest that policy makers should be clear about their objectives in order to create policies that best target their desired group. Finally, I suggest that all policy decisions should be based on detailed cost-benefit analysis and that all documents should be disclosed to the public for transparent debates.
[ vi ] Introduction
The minimum wage is a very controversial and widely debated policy. Canada has been very much involved in this debate as the country has used minimum wages for over 100 years.
When they were originally introduced in Canada, minimum wages were a tool to prevent the exploitation of workers and their labour. While still used for this purpose, minimum wages have shifted to become more of an anti-poverty policy with the intent of supporting low-income earners. While there are some political groups and individuals that support the minimum wage, other groups such as economists and business owners have heavily criticized the negative effects that the minimum wage can have, especially with regards to employment. For example, CFIB president Dan Kelly stated in October 2017, “while hiking the minimum wage to $15 may sound like a good idea, the evidence shows it would be a job killer.”1 On the other side of the debate
Alberta Premier Rachel Notley tweeted in August 2018: “Who benefits from a higher minimum wage? It’s women. It’s single parents. It’s families who are working more than two full-time jobs but who were still struggling to put food on the table and pay rent. We’re not going to let working people get left behind.”2
Economic theory shows that the minimum wage affects employment differently in different types of labour markets. A binding minimum wage in a competitive labour market (one where there are a number of firms who compete to purchase labour) will result in more people entering the labour market but less demand for their labour. This is what is known as a labour surplus. Depending on labour force participation rates, this could lead to an increased
1 CFIB, “$15 minimum wage a job killer for Ontario’s youth: CFIB Report,” accessed July 27, 2018, https://www.cfib- fcei.ca/en/media/15-minimum-wage-job-killer-ontarios-youth-cfib-report 2 R. Notley, Twitter Feed, August 14, 2018, https://twitter.com/rachelnotley/status/1029462803260747776?lang=en.
1 | Page unemployment rate. In a monopsonistic labour market (one in which there is only one firm demanding labour), a binding minimum wage will have a positive effect on employment.
Because labour markets are not uniform across and within provinces, it is difficult to know what effect increasing the minimum wage will have on employment, and this is why we turn to empirical analysis to better understand the real-world effects of the policy.
When it comes to empirical analysis, economists have not been able to come to a consensus on the magnitude of the effect of increasing minimum wage on employment or unemployment. For example, Neumark and Wascher surveyed a collection of 100 minimum wage studies, determined that 85% of them were sound, and found that on average a 10% increase in the minimum wage leads to a 1-3% reduction in employment.3 Sen Rybczynski, and
Van De Waal, however, reported that a 10% increase in the minimum wage would result in a 3-
5% reduction in employment.4 While there is no consensus on the magnitude , most researchers from Canada can agree that the minimum wage does in fact have a negative impact on employment.
There are several reasons why researchers are unable to come to an agreement on the effects of the minimum wage, but it is largely due to the complexity of the studies and the seemingly large number of confounding variables affecting the results. These confounding variables occur when the control group in an experiment does not remove all possible
3 D. Neumark and W. Wascher, “Minimum Wages and Employment,” Foundations and Trends in Microeconomics 3, no. 1-2 (2007): 163-167. 4 A. Sen, K. Rybczynski, and C. Van De Waal, “Teen Employment, Poverty, and the Minimum Wage: Evidence from Canada,” Labour Economics 18, no. 1 (2011): 40.
2 | Page alternative explanations for an observed outcome; in this case, the effect of the minimum wage on employment. Because of this reason, there is no easy answer to minimum wage questions.
In addition to confounding variables, researchers have had a difficult time coming to a consensus on the effects of the minimum wage because of the many different types of methodology used. Some types include: time series analysis, aggregate cross section analysis, time series panels, and difference-in-difference estimators.5 Each method has its own pros and cons but there is no consensus on any single best method. Because of the wide range of methods, researchers argue about the other’s results and further add to the debate on the effects of the policy. A detailed review of minimum wage research and literature will be discussed later in this paper.
As mentioned, the debate surrounding the minimum wage is very much present in
Canada. In the past, each province has slowly increased their minimum wage every few years to account for inflation. More recently, however, there has been a trend of provincial governments
(and governments around North America) implementing large increases to the minimum wage with the ultimate goal of reaching $15 per hour. Alberta was the first province to adopt this policy in 2015, followed by Ontario in 2017, and British Colombia in 2018. Each of these provinces has framed their policy as a strategy for improving outcomes for low-income individuals and therefore its use as an anti-poverty policy. Since these announcements, the minimum wage debate has continued and grown in Canada. There has been a steady amount of
5 Gunderson, M. “Minimum Wages in Canada: Theory, Evidence and Policy.” Federal Labour Standards Review Commission (2005): 20-24.
3 | Page research, news articles, and input from think tanks and other stakeholders being shared to feed this debate.
Because there is so much conflicting information on the minimum wage, the purpose of this paper is to review the minimum wage in Alberta, attempt to understand the effects of the recent increases, and to make recommendations for policy makers to consider when making additional changes to the minimum wage. Alberta was the first province in Canada to introduce the $15 minimum wage legislation in 2015. Prior to this paper, there has been no study published in Canada that examines a jurisdiction that increased their minimum wage by such a large amount in such a short period of time. To date, most of the Canadian literature on the minimum wage analyzes the country as a whole, and not the provinces individually. Because
Canada is such a large country, and because the provinces are diverse and distinct from one another (due to industry, resources, politics and other factors), it is important to look at each province on its own; therefore, I have specifically chosen to focus on Alberta and its unique case.
This study is important, and will continue to be important, as more provinces look to implement similar $15 minimum wage policies.
To understand the effects of Alberta’s increasing minimum wage on employment and unemployment, I used a natural/observation study of Alberta and Saskatchewan. Alberta was the treatment group in my study as its minimum wage significantly increased starting in 2015.
Saskatchewan was the natural control group in my study because they did not increase their minimum wage arbitrarily like Alberta, but they only indexed their minimum wage yearly to adjust for inflation. Because the two provinces are so similar in many ways (industry, political landscape, boom-bust cycles, etc.), Saskatchewan’s data became the baseline measure of the
4 | Page experiment. Thus, any changes in Alberta’s employment or unemployment rates that were not seen in Saskatchewan could be attributed to the increase in minimum wage that Alberta experienced. More specific details of my analysis and results are discussed later in this paper.
The main objective of this capstone project is to provide recommendations on policy that can be used going forward. I conclude my paper by providing three recommendations to policy makers for the continued use and development of minimum wage policy.
Minimum Wage Background
The Minimum Wage & It’s Purpose
A minimum wage is the lowest wage that an employer can, by law, pay an employee.6
Employers may agree to pay above the minimum wage, but they are not legally allowed to pay below it. This government regulated price floor was originally designed as a tool to reduce exploitation of workers and as a means to address poverty and inequality through income redistribution.7 Other rationales for the minimum wage include: reducing the number of low- wage jobs, encouraging low-skilled workers to enter the labour force, helping students to pay for tuition increases, allows some to not rely on social programs like welfare, protect workers from low-wage competition, and reduce the need for labour unions.8
Minimum Wage in Canada
Canada has had a long history with the minimum wage. Provinces and territories have had labour standards in place since the early 1900’s; Indeed, Alberta was the first province to
6 Government of Alberta, “How the Minimum Wage Works,” accessed May 1, 2018, https://www.alberta.ca/alberta-minimum- wage-changes.aspx#p3984s1. 7 Christopher J. Bruce, Economic of Employment and Earnings: Second Edition, (Scarborough: Nelson Canada, 1995), 508-509. 8 Gunderson, Minimum Wages in Canada: Theory, 2-6.
5 | Page introduce the minimum wage in 1917. Since that time, we have seen many variations in minimum wage policy. For example:
• Until 1996, Canada had a federal minimum wage that applied to federally run industries (e.g.,
railroads). Today such industries fall under provincial/territorial minimum wage legislation.
• Until the mid 1980’s, provinces and territories had different minimum wage levels for urban
and non-urban areas, men and women, different age groups, and for different industries.
• Today in some provinces, a different, lower minimum wage is set for restaurant or liquor
servers and sales people, who earn tips or commission on top of their hourly wage. Many
provinces are now beginning to phase this out.
Today, each province and territory set one uniform minimum wage for their jurisdiction that applies to all people regardless of where they live, their sex, age, or industry. Generally, minimum wages across Canada have increased at around the same rate. While there might be difference in the minimum wage from coast to coast, the spread of minimum wage for most of
Canada’s history has been small. Each province and territory typically increased their respective minimum wage in small increments of less than $1 every five to ten years. Due to the trend of higher minimum wages in recent history, this general pattern has been broken and increases are larger and more frequent.
Today the minimum wage across Canada ranges between $10.96 and $14 per hour.
Ontario currently has the highest minimum wage in Canada at $14 per hour. Alberta is in second place with a minimum wage of $13.60 per hour. The lowest minimum wage in Canada can be found in Saskatchewan, where it currently sits at $10.96 per hour. Table 1 below lists all the
6 | Page current and forthcoming minimum wages for each province and territory in Canada. As shown in table 1 below, a few of the provinces adjust their minimum wage yearly according to the consumer price index (CPI), an inflationary measure. Provinces that have taken this approach claim that changes to the minimum wage will be more predictable for employers and that minimum wage can more closely follow changes in the cost of living.9
Table 1: Hourly minimum wage across Canada, as of May 1, 2018.10
Province / Territory Current Minimum Forthcoming Wage Minimum Wage Alberta $13.60 $15.00 (October 1, 2018) British Columbia $12.65 $13.85 (June 1, 2019) Manitoba $11.15 $11.35 (October 1, 2018) New Brunswick $11.25 *Adjusted annually to CPI Newfoundland and $11.15 - Labrador Northwest Territories $13.46 - Nova Scotia $11.00 *Adjusted annually to CPI Nunavut $13.00 - Ontario $14.00 $15.00 (January 1, 2019)11 Prince Edward Island $11.55 - Quebec $12.00 - Saskatchewan $10.96 *Adjusted annually to CPI Yukon $11.51 *Adjusted annually to CPI
9 Government of Newfoundland and Labrador, “Indexing the Minimum Wage in Newfoundland and Labrador: Summary”, accessed May 5, 2017 from http://www.aesl.gov.nl.ca/publications/pdf/Minimum_Wage_Consultations_Summary_May.pdf. 10 Retail Council of Canada, “Minimum Wage by Province”, accessed October 7, 2017, https://www.retailcouncil.org/quickfacts/minimum-wage-by-province. 11 Under new PC Government in Ontario (June 2018) the minimum wage has been frozen at $14.
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Alberta’s Minimum Wage over Time
Alberta has changed dramatically since the early 1900’s, and thus, so has the minimum wage. Historically, the minimum wage in Alberta increased by small increments every five years or so, as depicted in figure 1 below. The minimum wage started at $1.25 per hour in 1965 and has increased to $13.60 per hour today.12 Since 1965, there has only been one case of the minimum wage increasing by more than $1 at a time: in 2005, the minimum wage increased from $5.90 per hour to $7.00 per hour.13 Overall, the minimum wage in Alberta has been steadily increasing with time. This is not true, however, in more recent history.
35
30
25
20 AB Minimum Wage 15 Inflation Adjusted to 2018 Prices Wage ($/hr) 10 Average Hrly Wages
5
0 1965 1972 1979 1986 1993 2000 2007 2014 Year
Figure 1: Minimum wage and inflation adjusted minimum wage in Alberta from 1965 to 2018, and average hourly wages from 1997 to 2018. Recently, the minimum wage in Alberta has been increasing more considerably. Since
2004, there has been a trend of increasing the minimum wage more frequently, and by larger amounts. Changes have been occurring roughly once per year and the increases have been
12 Government of Canada, “Hourly Minimum Wages in Canada for Adult Workers”, accessed October 7, 2017, http://srv116.services.gc.ca/dimt-wid/sm-mw/rpt2.aspx. 13 Ibid.
8 | Page around $1 or greater each time. Between 2015 and 2018, the minimum wage in Alberta has been set to increase from 10.20 per hour to $15 per hour, through annual increases. 14 This amounts to a 47% increase.
Who earns the minimum wage in Alberta?
Before looking at how changes in the minimum wage affect employment and unemployment, it is an important first step to understand who actually earns the minimum wage. In Canada, there are over 1,000,000 minimum wage earners.15 This amounts to about
6.5% of the population.16 Using data from the 2018 Canadian Labour Force Survey (LFS), I determined that 48.2% of minimum wage earners in Alberta are between the ages of 15-24,
40.6% are between the ages of 25-54, and only 11.2% are 55 years or older. Of the 15 to 24- year-old minimum wage earners, 49.9% are students and only 36% of them work full-time jobs.
Of all the provinces, Alberta and Ontario have the lowest number of minimum wage earners in the 15-24 age group. Since many studies claim that increases to the minimum wage disproportionally harm young workers, it is very important to consider how many young people earn the minimum wage in the jurisdiction considering the policy. For example, youth aged 15-
24 in Quebec make up over 60% of minimum wage earners and therefore the province should be very cautious when making changes to its minimum wage to ensure not to harm this age group.
Table 2 contains a detailed breakdown of minimum wage earners in each province in Canada by individual characteristic.
14 Government of Alberta, “Minimum Wage Fact Sheet,” accessed October 7, 2017, https://work.alberta.ca/employment- standards/minimum-wage.html. 15 R. Murphy, C. Lamman, and H. MacIntyre, Increasing the Minimum Wage in Ontario: A Flawed Anti-Poverty Policy, (Vancouver: The Fraser Institute, 2018), 12. 16 Ibid.
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Age is not the only variable to consider when looking at who earns the minimum wage.
61.7% of minimum wage earners in Alberta are female. As shown in table 2, this is not an uncommon split across the country. The most gender equal province in terms of minimum wage earners is Saskatchewan where there is a 55:45 female/male split. Many proponents of increasing the minimum wage note that the policy will help single mothers, however, if there are any negative employment effects from an increase, females are more likely to be impacted than males. Another statistic that is the same across Canada is that the majority of minimum wage earners work part-time and about 90% only hold one job.
Of those earning minimum wage in Canada, Alberta has the highest number of those who live in dual income households; 12.9% live in a dual-income household and 13.4% in a dual income household with no children. I also determined that only 9.0% of Albertans earning under
$13.60 per hour are single parents and 12.6% are unattached individuals. A more detailed breakdown of economic family type by age can be found in appendix A.
Some other statistics that are important to consider is that Albertans work on average more hours each week than all the other provinces. Albertans work on average 27.21 hours where Quebecois only work 23.91 hours on average. A paper prepared by the Fraser Institute reported that only 18.9% of minimum wage earners in Canada are a member of a low-income household.17 Because of these many differences in minimum wage earners across Canada, different provinces are likely to have different outcomes to changes in their minimum wage. It is
17 Murphy et al, Increasing the Minimum Wage in Ontario, 12.
10 | Page important, therefore, to consider who earns the minimum wage to understand which groups will be impacted by any change in minimum wage policy.
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Table 2. Characteristics of workers earning at or below the minimum wage*, Canada, January to June2018.18
AB BC MN NB NF NS ON PEI QB SK Age 15-24 48.2% 56.2% 52.7% 58.2% 53.3% 57.5% 48.0% 55.9% 60.3% 48.8% 25-54 40.6% 30.7% 32.9% 24.8% 34.2% 27.3% 37.8% 30.7% 28.2% 36.2% 55+ 11.2% 13.1% 14.4% 17.0% 12.5% 15.3% 14.2% 13.4% 11.5% 15.0% Sex Male 38.3% 38.0% 40.4% 40.9% 43.4% 41.4% 42.2% 39.9% 41.3% 44.4% Female 61.7% 62.0% 59.6% 59.1% 56.6% 58.6% 597.8% 60.1% 58.7% 55.6% In School? Non-student 71.8% 63.0% 65.5% 65.0% 67.1% 60.5% 68.2% 63.9% 55.2% 69.1% Full-time student 25.1% 31.4% 30.5% 33.1% 29.2% 37.1% 29.1% 33.5% 40.4% 27.6% Part-time student 3.1% 5.7% 4.0% 1.9% 3.7% 2.4% 2.7% 2.7% 4.4% 3.3% Job Status Full-time 48.4% 41.3% 43.0% 48.0% 47.6% 38.8% 47.0% 44.1% 39.2% 43.4% Part-time 51.6% 58.7% 57.0% 52.0% 52.4% 61.2% 53.0% 55.9% 60.8% 56.7% Permanence Permanent 74.7% 71.2% 79.6% 76.2% 70.2% 71.4% 76.2% 74.6% 76.8% 74.8% Non-Permanent (seasonal) 3.3% 3.4% 3.1% 4.4% 4.4% 6.2% 4.2% 7.7% 3.6% 2.9% Non-Permanent (temporary or contract) 9.0% 9.0% 4.9% 5.8% 7.2% 5.4% 9.4% 6.2% 9.7% 8.9% Non-Permanent (casual or other) 13.0% 16.5% 12.4% 13.7% 18.2% 17.0% 10.3% 11.6% 9.9% 13.4% Multiple or Single Job Holder Single job holder 91.3% 93.2% 92.5% 95.9% 95.2% 93.3% 93.9% 95.5% 95.1% 90.9% Multiple job holder 8.7% 6.8% 7.5% 4.1% 4.8% 6.7% 6.1% 4.5% 4.9% 9.1% Household Status
18 All LFS data collected from CHASS Data Centre using January-June 2018 data. *Used provincial minimum wage as of June 1, 2018.
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Unattached individual, lone parent or 37.2% 45.1% 38.2% 46.4% 46.9% 51.7% 41.4% 47.5% 47.5% 36.9% spouse/partner in a single-earner couple Spouse/partner in a dual-earner couple 52.9% 44.5% 50.8% 47.0% 47.4% 40.1% 46.8% 45.8% 44.7% 54.2% Other 9.9% 10.4% 11.1% 6.6% 5.7% 8.2% 11.8% 6.7% 7.8% 8.9%
Marital Status Married 32.0% 23.7% 27.0% 19.5% 26.3% 19.1% 27.5% 20.9% 13.3% 28.9% Common Law 7.0% 5.6% 5.1% 10.7% 7.2% 7.9% 6.5% 11.2% 13.7% 7.8% Widowed 0.4% 1.2% 30.0% 0.9% 1.1% 1.3% 1.2% 1.7% 48.9% 1.1% Separated 0.8% 1.4% 1.3% 1.4% 1.2% 0.8% 1.8% 1.4% 1.3% 0.8% Divorced 2.7% 3.3% 2.3% 3.1% 2.0% 3.7% 2.9% 2.3% 2.2% 2.6% Single, never married 57.1% 64.9% 64.0% 64.4% 62.2% 67.2% 60.1% 62.5% 68.5% 58.8% Average Hours / Week 27.21 25.10 25.10 26.08 26.47 24.42 26.35 25.53 23.91 26.7
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Proposed Changes to Alberta’s Minimum Wage
In Alberta’s 2015 general election, the New Democratic Party (NDP) was elected to a majority government under the leadership of Rachel Notley. This was a big shift in the political landscape in Alberta as the Progressive Conservative Party had been in power since 1971, and this was the first time in Alberta’s history that the NDP had ever formed a government. The NDP government was voted in on a platform that proposed many changes to improve quality of life for low-income earners, including the promise to increase the minimum wage to $15 per hour by
2018.19 Once elected, the party did not waste any time implementing this new policy.
Just a few short months after being elected, on October 1, 2015, the NDP raised the minimum wage from $10.20 per hour to $11.20 per hour, and to $12.20 per hour just one year later.20 On October 1, 2017, it was again raised to $13.60 per hour.21 Just as the NDP had set out in their original platform, Alberta will have a $15 per hour minimum wage come October 1,
2018.22
Saskatchewan: Minimum Wage Indexed to CPI
Saskatchewan has not followed the $15 minimum wage movement and instead the province has implemented an indexed minimum wage. This means that every year on October
1st the minimum wage in Saskatchewan will be adjusted to account for inflation in the previous year. They have decided to do this because it ensures that the minimum wage remains at a
19 Alberta NDP, Election Platform 2015, (Edmonton: Alberta NDP, 2015), 7. https://www.poltext.org/sites/poltext.org/files/plateformes/alberta_ndp_platform_2015.pdf. 20 Government of Alberta, “Minimum Wage Fact Sheet.” 21 Ibid. 22 Ibid.
11 | Page constant level of purchasing power.23 As shown in figure 2 below, Saskatchewan’s real minimum wage has increased a lot slower than Alberta’s in recent history.
Alberta & Saskatchewan Minimum Wage over Time 16.00 14.00 12.00 10.00 8.00 6.00 Wage ($/hr) 4.00 2.00 0.00 12- 08- 04- 12- 08- 04- 12- 08- 04- 12- 08- 04- 12- 1997 1999 2001 2002 2004 2006 2007 2009 2011 2012 2014 2016 2017
Alberta Saskatchewan
Figure 2. Real minimum wage in Alberta and Saskatchewan December 1997 to December 2017 Economic Theory
Before analyzing how the minimum wage affects employment and unemployment in
Alberta, it is important to understand the economic theory and framework of the minimum wage. There are two important views of the minimum wage to consider: the minimum wage in a perfectly competitive market and the minimum wage in a monopsony market.
Minimum Wage in a Competitive Labour Market
When most people think about how the minimum wage affects employment, they are likely thinking of it in the context of a perfectly competitive labour market. In a perfectly competitive labour market there are a large number of consumers and a large number of firms
23 Government of Saskatchewan, “Government Releases Report on Indexing Minimum Wage,” accessed July 10, 2018 from http://www.saskatchewan.ca/government/news-and-media/2011/march/31/government-releases-report-on-indexing- minimum-wage.
12 | Page who interact with one another. As shown in figure 3, in a competitive labour market, the demand for labour is downward sloping and is representative of the marginal revenue product- that is the revenue attributable to additional workers as they are hired in the industry. Firms act as price takers in a competitive labour market. The supply of labour in a competitive market is upward sloping because more people are willing to supply their labour as the wage rate increases. The equilibrium quantity and wage rate in a competitive market are determined by the intersection of the supply and demand curves.
Figure 3. A perfectly competitive market in the absence of a minimum wage. When a minimum wage that is binding (i.e.: higher than the equilibrium wage) is introduced into a competitive labour market, the market becomes distorted, as shown in figure 4 on the next page. When the minimum wage is introduced or increases, more workers are willing to supply their labour (L2) but employers are less willing to purchase labour at this new higher wage. In this case, a new, lower quantity of workers are hired (L1). This distance between L2 and
L1 represents a surplus of labour that can lead to an increase in the level of unemployment in the market (if there is no change in the labour force participation rate). Theoretically, the
13 | Page introduction or the increase of the minimum wage in a perfectly competitive labour market creates a dead weight loss, as not all the workers who are willing to work are hired by the firms.
Figure 4. The effect of the minimum wage in a perfectly competitive market. To dive in a little deeper, it is important to consider who the workers of this model are.
The workers who keep their job when a minimum wage is introduced or increased in a competitive labour market are the more productive workers. When this policy is implemented, these workers who keep their jobs will benefit from the increase in their wages by the area shown in orange of figure 5 on the next page. These are the “winners” of the minimum wage increase. The workers who lose their jobs (those between L1 and Q*), are the less productive workers of the labour market. Typically, these workers are young and unskilled. When the minimum wage policy is implemented in this market these workers experience a net reduction in their well-being by the area shaded green in figure 5. These are the losers of the minimum wage policy. Because this policy results in winners and losers, it becomes a very political question and the model does not matter much. Policy makers must consider their objectives to determine if the winners from the policy are those who they are targeting.
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Figure 5. The effect of the minimum wage in a perfectly competitive market.
While theoretically it is true that a binding minimum wage can bring about unemployment in a competitive labour market, governments may still want to use them for redistributive purposes. Saez and Lee published a paper in 2012 that provides a normative analysis of minimum wage policy in competitive labour markets. The objective in the paper was to show that the minimum wage has trade-offs and that there are appropriate ways in which to use the minimum wage in combination with taxes and transfers. Saez and Lee make the assumption of efficient rationing- that is that “workers who involuntarily lose their low-skilled jobs due to the minimum wage are those with the least surplus from working in the low-skilled sector". They claim that a binding minimum wage in a competitive market can be desirable (in the presence or absence of taxes and transfers) if any resulting unemployment affects the lowest-surplus workers first.24 They explain that the minimum wage can “enhance the
24 Saez, E. and Lee, D. "Optimal Minimum Wage Policy in Competitive Labour Markets." Journal of Public Economics 96, (2012): 739-749.
15 | Page effectiveness of transfers to low-skilled workers”25. In summary, their research shows that that the minimum wage can be desirable for redistributive purposes if done in the correct manner with the right tax/transfer policies.
Elasticity of Demand
The elasticity of demand is an important characteristic to consider when looking at the theory on the minimum wage and employment. The surplus of labour / magnitude of the increase in employment depends on how steep or flat / how elastic or inelastic the demand curves are.
Figure 6a. The effect of an increased minimum wage in a competitive market when demand is relatively elastic. The distance between Q1 and Q2 is larger compared to the distance in figure 6b. in this case in a competitive market, an increase in the minimum wage would have a larger effect on employment. The elasticity of demand explains how sensitive the demand for labour is to changes in the environment.26 It is the percentage change in the labour demand over the percentage change in the real wage rate. If the demand curve is fairly elastic (flatter slope), similar to what is
25 Saez, E. and Lee, D. "Optimal Minimum Wage Policy in Competitive Labour Markets." Journal of Public Economics 96, (2012): 739-749. 26 R. S. Pindyck and D. L. Rubinfeld, Microeconomics: Eighth Edition (New Jersey: Pearson Education, 2013), 33.
16 | Page shown in figure 6a, then a change in the minimum wage will have a relatively large effect on employment.27 If the demand curve is more steep or inelastic, as shown in figure 6b, then the minimum wage has a relatively small effect on employment.28 In other words, if the elasticity of demand ratio is greater than one, individuals will be hurt by an increase in the minimum wage.29
If it is less that one, then workers can benefit from an increase in the minimum wage.30 If the minimum wage is increased it causes some people to lose their jobs but others are able to gain a higher wage. If the lost income from the decreased employment outweighs the income gained from those who kept their jobs, then increasing the minimum wage is not a good option. It has been shown that there is a critical value for the elasticity of labour demand that determines if an increase in minimum wage will be overall beneficial or harmful to citizens.31 Elasticity of demand must be considered when looking at the effects of a minimum wage in a competitive market.
Figure 6b. The effect of an increased minimum wage in a competitive market when demand is relatively inelastic.
The distance between Q1 and Q2 is smaller compared to the distance in figure 6a. in this case in a competitive market, an increase in the minimum wage would have a smaller effect on employment.
27 Bruce, Economics of Employment and Earnings, 511. 28 Ibid. 29 Ibid., 512. 30 Ibid., 512. 31 L. Danziger, “The Elasticity of Labour Demand and the Minimum Wage,” Journal of Population Economics 22, no. 3 (2009): 756- 772, doi: 10.1007/s00148-007-0179-y.
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Minimum Wage in a Monopsonistic Labour Market One cannot assume that all labour markets are perfectly competitive because in the real world, they are not. There is plenty of economic theory that describes the effect of a minimum wage in a monopsony labour market. In the case of a monopsony, there is one firm (consumer of labour and many workers (suppliers of labour). In such a market, the firm has market power and sets the wage rate for the employees. The demand curve in a monopsony is also downward sloping because firms are less willing to hire as the wage rate increases. This is due to the fact that the revenue obtained decreases with every additional worker- a phenomenon known as diminishing marginal returns. Supply of labour is upward sloping because at higher wage rates, more workers are willing to supply their labour. A monopsony market also has a market cost curve that sits about the supply curve. This curve represents what firms can offer workers as they are the only buyers of labour in the market. In a monopsonistic labour market, as shown in figure 7 on the next page, firms hire fewer workers at lower wages (compared to a perfectly competitive market) because they do not have to compete with other firms with competitive wages. Firms will hire QM* workers and pay them a wage of WM*, which are both less than QPC* and WPC* in a competitive labour market. Because the firms hold this power over the workers, it creates a deadweight loss in the market as labeled in the figure.
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Figure 7. A monopsony market in the absence of a minimum wage. When a binding minimum wage is introduced into a monopsonistic labour market, the wage moves up to WMIN and number of workers hired increases to QPC, as shown in figure 8 below. This change in wages and number of workers employed eliminates the dead weight loss from the market. The introduction of a minimum wage that is above the equilibrium wage into a monopsony labour market has a positive effect on employment.
Figure 8. The effect of the minimum wage on a monopsony market.
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After learning the economic theory behind the minimum wage, one might wonder why researchers then analyze the effects of the minimum wage. The answer is because it is difficult to categorize a market as “perfectly competitive” or a “monopsony”, and it is difficult to determine how elastic or inelastic the supply and demand curves are. As suggested by Neumark and Wascher, empirical analysis must be done to fully understand how employment and unemployment is affected by a change in the minimum wage.32
Literature Review
There has been a considerable amount of research done on the minimum wage and its effects on labour markets and poverty. While there is a lot of US research, I have chosen to review mainly Canadian studies that relate to minimum wage and employment. While the United
States and Canada are similar in many ways, they can also be very different. For instance, in the
US there is a federal minimum wage, but some states or municipalities may choose to have their own minimum wage. In Canada, the minimum wage and other labour regulations are implemented at the provincial level and occur much more frequently than they do in the United
States.33 I have chosen to focus on Canadian studies as they are more relevant to the labour market in Canada and thus my analysis on Alberta and Saskatchewan. For the most part, this section presents studies in the order in which they were published.
32 D. Neumark and W. Wascher, Minimum Wages, (Cambridge: The MIT Press, 2008): 57. 33 M. Baker, D. Benjamin and S. Stanger, “The Highs and Lows the Minimum Wage Effect: A Time-Series Cross Section Study of the Canadian Law,” Journal of Labor Economics 17, no.2 (1999): 319-320.
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The New Jersey Minimum Wage Study
Before diving into the Canadian research, I must first mention the paper that sparked the great minimum wage debate. In 1993, Card and Krueger produced arguably one of the most recognized studies on the minimum wage. The study used the difference in differences method to compare employment in the fast food industries. The researchers were interested in how New
Jersey’s employment would be affected after the minimum wage rose from $4.25 to $5.05 per hour in 1992. Since the minimum wage in the adjacent state Pennsylvania remained constant, they were then able to use it as their control group in their study. After analyzing 410 fast-food restaurants in both states before and after New Jersey’s minimum wage increase, Card and
Krueger concluded that the increase had no effect on employment in these restaurants and in some restaurants, employment actually increased.34 Since their study was published, many other researchers have argued over the results of the paper. Most notably, Neumark and
Washer were very critical of Card and Krueger’s survey method for data collection. They used payroll data from the same fast-food chains that Card and Krueger surveyed to show that employment at these fast-food restaurants actually fell by 1-2.5% for every 10% increase in the minimum wage.35 In conclusion, Neumark and Wascher stated that increases in the minimum wage reduce employment in the fast food industry.36 Card and Krueger respond to Neumark and
Washer by also arguing that their results were not statistically significant and once again over the
34 D. Card and A. B. Krueger, “Minimum Wages and Employment: A Cases Study of the Fast Food Industry in New Jersey and Pennsylvania,” The American Economic Review 84, no. 4 (1994): 792. 35 D. Neumark and W. Wascher “Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania: Comment,” The American Economic Review 90, no. 5 (2000): 1391. 36 Ibid.
21 | Page methodology used in the study.37 While the debate on this study could go on forever, one researcher offered that while it is difficult to analyze the impact of the minimum wages on employment, we must understand that methodology can alter results and therefore it will be difficult to reach a consensus on the effects.38
Canadian Studies: 1979-2005
In 2005, Morley Gunderson from the University of Toronto completed a review of the theory, evidence and policy of minimum wages in Canada for the Federal Labour Standards
Review Commission. In the report, Gunderson reviews 23 Canadian minimum wage studies from
1979 to 2005. Table 3 on the following pages contains a summary of the relevant studies that were included in Gunderson’s review. All studies use a time series regression of pooled cross- section data. In summary, the Canadian studies mentioned in the review showed that most researchers find that increasing the minimum wage has a negative impact on employment,
“where a 10% increase in the minimum wage leads to a 1-3% reduction in employment”.39
Additionally, none of the studies found that increasing the minimum wage has a positive effect on employment. 40
37 D. Card and A. Krueger, “Minimum Wages and Employment: A Cases Study of the Fast Food Industry in New Jersey and Pennsylvania- Reply,” The American Economic Review 90, no.5 (2000): 1397-1420. 38 Gunderson, Minimum Wages in Canada: Theory, 27. 39 Ibid., 43-44. 40 Ibid., 44.
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Table 3. Studies that discuss the impact of the minimum wage on employment from Gunderson’s 2005 review.41
Authors Year Published Jurisdiction Time Period Findings/Conclusions A 10% increase in the minimum wage leads to an increase in unemployment of 0.6 Fortin 1979 Quebec 1972-76 to 1.0 percentage points (2.5-3.5 percentage points for male youth aged 15-24).42 Looked at teen and female unemployment rates and found that a $0.10 increase in Cousineau 1979 Quebec 1968-77 the minimum wage lead to a 2.9 percentage point increase in teenage unemployment and 1.7 percentage point increase in female unemployment.43 Maki 1979 All 10 provinces 1970-77 Found that the elasticity of unemployment relative to the minimum wage is 0.56.44 Found that the elasticity of employment is -0.17 (-0.10 for males and -0.27 for 5 regions within Swidinsky 1980 1956-75 females). Swidinsky found that the employment effect is only significant for Canada females.45 Found that increasing minimum wage has significant negative impact on employment for both genders combined. They found that employment effects for Gruebel and Marki 1981 All 10 provinces 1950-75 females are very small and thus insignificant while effects for males are large and significant. They note that decreased employment can also lead to a decrease in the labour force participant rate.46 Found that increased minimum wage has a negative impact on employment for all Schaafsma and age-sex groups (15-19, 20-24 and 25+) and was significant for all groups except 1983 9 provinces 1975-79 Walsh females 25+. They noted that a 10% increase in the minimum wage would increase the unemployment rate by 10% (i.e.: about 1 percentage point at the time).47 Found that the minimum wage reduces the ratio of part-time to full-time employment for both males and females. The effect was negative and statistically McKee and West 1984 8 provinces 1975-81 significant for 12 of the 16 cases. They showed that the minimum wage has a larger negative effect on part-time workers.48
41 Gunderson, Minimum Wages in Canada: Theory, 33-45. 42 N. Fortin, “L’effect du Salaire Minimum Sur Les Prix L’employ et la Reportition des Revenus Les Cas Du Quebec,” Relations Industrielles/Industrial Relations 34, no.4 (1979):664- 665. 43 J-M. Cousineau, “Minimum Wage and Unemployment Among Young People and Women in Quebec,” Relations Industrielles/Industrial Relations 34, no.2 (1979): 403-417. 44 D. Maki, “The Effect of Changes in Minimum Wage Rates on Provincial Unemployment Rates, 1970-1977,” Relations Industrielles/Industrial Relations 34, no.3 (1979): 425. 45 R. Swidinsky, “Minimum Wages and Teenage Unemployment,” Canadian Journal of Economics 13, no.1 (1980): 163-68. 46 H. Gruebel and D. Maki, “A Note on the Effects of Unemployment Insurance, Minimum Wage Legislation and Trade Union Growth on Reported Unemployment Rates in Canada, 1950-75,” Relations industrielles/industrial relations 36, no.4 (1981): 923. 47 J. Schaafsma and W.D. Walsh, “Employment and Labour Supply Effects of the Minimum Wage: Some Pooled Time-Series Estimates from Canadian Provincial Data,” Canadian Journal of Economics 26, no.1 (1983) pp. 93-94 48 M. McKee and E. West, “Minimum Wage Effects on Part-Time Employment,” Economic Inquiry 22, no.3 (1984): 425.
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Looked at four groups: 14-19 male/female and 20-24 male/female. They found Mercier 1985 Quebec 1966-81 negative employment effects that were larger in the 14-19 group and for females. They found elasticities that ranged from -0.1 to -0.3.49 Replicated the work done by Swidinsky in 1980 and found similar results from the 5 regions within Grenier and Sequin 1991 1956-75 and 1976-88 1956-1975 period. In the 1976-1988 period they found statistically insignificant Canada results.50 1968-90 (women) and Found that a 10% increase in the minimum wage led to a 1.4 percentage point Cousineau, Tessier 1992 Ontario 1975-90 (youth aged increase in the unemployment rate for women and a 1.5 percentage point increase and Vaillancourt 14-24) for youth.51 The researchers did not report any magnitudes from their regression analysis but Kan and Sharir 1996 9 provinces 1975-91 concluded that minimum wage has no negative effect on employment, including for the two youngest groups.52 Their results that the long run effects of employment are negative and statistically Baker, Benjamin 1999 9 provinces 1975-93 significant. They found that a 10% increase in the minimum wage leads to a 2.5% and Stanger reduction in employment.53 Found that a 10% increase in the minimum wage leads to a 1.6% decrease in employment for female teenagers (aged 15-19) and 1.4% decrease for male Goldberg and teenagers. Both results were statistically insignificant. For young adults (aged 20- 1999 QB, ON, AB, BC 1976-97 Green 24), the results were around 1% for males (statistically significant) but zero for females. For adults (aged 25-54) they found a 1% (significant) decrease for females but zero for males.54
49 J. Mercier, “Les Effets du Salaire Minimum Sur L’Emploi Des Jeunes Au Quebec,” Industrial Relations/Relations Industrielles 40, no.3 (1985): 441. 50 G. Grenier and M. Seguin, “L’Incidence du Salaire Minimum sur le Marche Travail des Adolescents au Canada: Une Reconsiderations des Resultats Empiriques,” L’Actualite Economique 67, no.2 (1991):123-124 51 J-M. Cousineau, D. Tessier, and F. Vaillancourt, “The Impact of the Ontario Minimum Wage on Unemployment of Women and the Young in Ontario,” Industrial Relations 47, no.3 (1992): 563-64. 52 J.S. Kan and S. Sharir, “Minimum-Wage and Probability-Of-Getting-A-Job Effects in a Simultaneous Equations Model of Employment and Participation: Canada 1975-1991,” Canadian Journal of Economics Special Issue 29 (1996): S56. 53 Baker et al., "The Highs and Lows of the Minimum Wage Effect,” 318. 54 Goldberg, M. and Green, D. Raising the Floor: The Social and Economic Benefits of Minimum Wages in Canada. (Vancouver: Canadian Centre for Policy Alternatives, 1999), 18- 19.
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Non-Canadian Studies on Minimum Wage and Employment
While I do not want to focus on US research, it is important to understand how Canada’s results compares. Neumark and Wascher broadened the scope of Brown and surveyed a collection of 100 minimum wage studies from the US and other countries. They determined that
85% of them were sound and based on reasonable models. They concluded from their review that on average a 10% increase in the minimum wage leads to a 1-3% reduction in employment and that this is especially true for low-skilled workers like teenagers.55 Additionally, the pair concluded that few studies presented evidence of any positive employment effects from the minimum wage.
Canadian Studies: 2005-today
Shortly after Gunderson’s minimum wage review was published, Campolieti, Gunderson and Ridell published a study using the same research design laid out in Neumark’s 2001 paper in order to analyze the effects of the minimum wage on youth employment. For the study,
Campolieti et al. used Canadian data from all 10 provinces between 1981 to 1997. From this pooled, cross-section time-series data they found elasticities for the minimum wage between -
0.14 and -0.44, as compared to the “consensus” range of -0.1 to -0.3 for US studies.56 This research is consistent with the studies reviewed in 2005.
After US congress passed the Fair Minimum Wage Act in 2007 that raised the federal minimum wage $2.10, the great minimum wage debate started again. Sen, Van de Waal and
55 Neumark and Washer, “Minimum Wages and Employment,” 163-167. 56 Campolieti, M., Gunderson, M., and Riddell, C. "Minimum Wage Impacts from a Prespecified Research Design: Canada 1981- 1997." Industrial Relations: A Journal of Economy and Society 45, no. 2 (2006): 202-203,
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Rybczynki from Waterloo University analyzed Canadian provincial data between 1981 and 2004.
They found elasticities for minimum wage that ranged between -0.3 and -0.5, comparable to those of Campolieti et al. from 2006.57 The trio reported that a 10% increase in the minimum wage results in a 3-5% drop in teen employment.58 Additionally they found that a 10% increase also can lead to a 4-6% increase in the percentage of families living under the low income cut off.59 The researchers argue that the minimum wage is not an effective policy for helping those who are in need.
The Bank of Canada released a report in 2017 that examined the impacts of the minimum wage on the Canadian economy. They used a panel estimation approach using annual provincial data between 1995 and 2008 to determine how minimum wage affects employment. They used controls such as average wages, youth population, and GDP to regress employment rates for three different age groups: 15-19, 20-24 and 25-54. Using data from multiple sources, they found elasticities that range between -0.15 and -0.53 for the first two age groups, with five of the 6 elasticities being statistically significant.60 The Bank did not report any policy suggestions based on their findings.
In 2017, the Government of Ontario implemented the Fair Workplaces, Better Jobs Act that stated that the minimum wage would increase to $15 by January 2019 from $11.40. The province made the first increase towards the $15 minimum wage by increasing to $14 on
January 1, 2018. Ngo, Rhodes and West from the Financial Accountability office of Ontario
57 Sen et al., “Teen Employment,” 40. 58 Ibid. 59 Ibid. 60 D. Brouillette, C. Cheung, D. Gao, and O. Gervais, “The Impacts of Minimum Wage Increases on the Canadian Economy,” Bank of Canada, Analytical Note 2017-26 (2017), 14.
26 | Page assessed the economic impact of these proposed changes to the minimum wage. Ngo et al. determined that the increases would result in a loss of 50,000 jobs (0.7% of employment).61 They point out that although there would be an increase in the total labour income for the province, the increases are not a good policy for poverty reduction because the additional income gains are not directed towards the in-need/low income families.62 Since the report was published,
Ontario had a change in government and the minimum wage has since been frozen at $14 per hour.
Just this year (2018), Rybczynski and Sen released another study using panel data on
Canadian provinces between 1981 and 2011. This is the most recent research on the employment effects of the minimum wage in Canada. Through their regressions they found that a 10% increase in the minimum wage implies a 1-4% decrease in the employment rate of both males and females aged 15-19.63 What sets this study apart from others is that by using data from the Survey of Labour and Income Dynamics, they determined that increasing the minimum wage also has negative employment effects on mid-aged immigrants. They conclude that policymakers should be thoughtful when implementing increases to the minimum wage as it can have large employment impacts for certain groups, like low-skilled workers.
The Effect of Minimum Wage on Labour Market Flows
In addition to negative employment effects, increasing the minimum wage can also negatively affect labour market flows. Labour market flows describe the movement of individuals
61 L. Ngo, N. Rhodes, and D. West, Assessing the Economic Impact of Ontario’s Proposed Minimum Wage Increases (Toronto: Financial Accountability Office of Ontario, 2017), 1. 62 Ibid. 63 K. Rybczynski and A. Sen, “Employment Effects of the Minimum Wage: Panel Data Evidence from Canadian Provinces,” Contemporary Economic Policy 36, no. 1 (2018): 117.
27 | Page into and out of the labour force. A Canadian study by Brochu and Green looked at labour market transition rates between 1979 and 2008 while comparing low minimum wage areas to high minimum wage areas. They found that increasing minimum wages leads to lower hiring rates and lower job separation rates.64 Accounting for inflation, they found that for every 10% increase in the minimum wage there is a 4.3% decline in the separation rate. These results suggest that when the minimum wage is higher, layoff rates and hiring rates are lower, making it more difficult for workers to find a job.65 Long periods of unemployment can have negative psychological effects on workers and their families.
Comparatively, a US study revealed that increasing the minimum wage has a significant negative effect on employment flows, especially for low-skilled workers, such as teenagers and restaurant workers.66 The study showed that a 10% increase in minimum wage results in a 2.2% reduction in turnover rates for teenagers.67 While decreased flows may be good for workplace productivity, it limits new entrants’ employment opportunities and can hurt their success in the future. Long periods of unemployment can have both short and long-term consequences; a six- month unemployment spell for teens can result in a 2.9% reduction in wages throughout their lives, because of the lost human capital.68 Those who experience this are constantly trying to
“catch-up” to where they should be if they had not faced unemployment. These two studies
64 P. Brochu and D. Green, “The Impact of Minimum Wages on Labour Market Transitions,” The Economic Journal 123, (2013): 1231. 65 Ibid. 66 A. Dube, T. Lester, and M. Reich, “Minimum Wage Shocks, Employment Flows and Labour Market Frictions,” Journal of Labour Economics 34, no.3 (2016): 687. 67 Ibid. 68 T. Mroz and T. Savage, “The Long-Term Effects of Youth Unemployment,” The Journal of Human Resources 41, no. 2 (2006): 279.
28 | Page show that increasing the minimum wage can slow labour market flows and poverty can be exasperated for low-skilled workers.
Minimum Wage and Poverty
Governments who advocate for increasing the minimum wage do so because they believe it is an anti-poverty policy. Thomas MaCurdy from Standford University examined the effectiveness of the minimum wage in supporting the poor and found that increased wages create an upward pressure on consumer prices.69 MaCurdy called this phenomenon a “value- added tax effect”.70 These price increases undo the benefits of the incremental increases in wages because families spend a higher proportion of their income on everyday needs, which means these price increases are especially harmful to them.71 Therefore, increases in the minimum wage may not alleviate poverty and can actually make situations worse for low-income families.
Empirical Model
Similar to previous studies on the minimum wage, this section aims to determine what effect the minimum wage has on employment and unemployment What makes study stand out is that it focuses specifically on Alberta and Saskatchewan; previous studies have analyzed
Canada as a whole. I was interested in understanding the effects of the minimum wage in
Alberta since it was the first province implement a $15 minimum wage policy. Saskatchewan,
Alberta’s direct neighbor to the east, did has similar industry, experiences similar boom and bust
69 T. MaCurdy, “How Effective is the Minimum Wage at Supporting the Poor?” Journal of Political Economy 123, no.2 (2015): 523, doi.org/10.1086/679626. 70 Ibid. 71 Ibid.
29 | Page cycles, and shared relatively similar political landscapes; however, Saskatchewan did not implement the same $15 minimum wage policy as Alberta. Taken together, this makes Alberta and Saskatchewan natural treatment and control groups for determining the effect of the minimum wage on employment and unemployment.
In order to determine the effects of the minimum wage on employment and unemployment, the regression equations 1 and 2 were used (below):
!"#,%,& = () + (+log (12%,&) + (45"67% + (89:1!& + ; (1)
<"#,%,& = () + (+log (12%,&) + (45"67% + (89:1!& + ; (2)
The dependent variables are the logarithm of the employment and unemployment rates for a given age group a, in province p and in time period t. MW represents the real minimum wage. Like in the Bank of Canada analysis, the dummy variables PROV and TIME were included to control for province-specific controls between Alberta and Saskatchewan and time fixed effects.72 Lastly, ; represents the error term. Both equations are estimated separately for each of the four age groups: 15+, 15-24, 25-54, and 55+.
Data and Methodology
This model was estimated using a panel of data created for the period December 1997 to
December 2017. This time period was selected as most studies done on the minimum wage and employment/unemployment had a similar time period. Additionally, data for all the variables was available in this time period.
72 Brouillette et al, “The Impacts of Minimum Wage Increases on the Canadian Economy,” 13.
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The Labour Force Survey (LFS) is an ongoing survey of the Canadian labour market produced by Statistics Canada.73 It provides monthly records that includes data on employment, earnings, age of earner, and much more. The sample size of this data set ranges anywhere between 80,000 to 105,000 respondents for any given month. Much of the data used for the panel was mined from the LFS including employment, unemployment, and labour force characteristics for both Alberta and Saskatchewan. The LFS data was accessed through the
University of Toronto’s CHASS Microdata Analysis System and through Nesstar’s microdata files.74
Data for the minimum wage control variables was collected from the Government of
Canada’s minimum wage data base.75 It was adjusted for inflation to 2018 prices using the Bank of Canada’s Inflation Calculator.76 Canadian GDP data was obtained from CANSIM, Statistics
Canada’s socioeconomic database.77
To analyze the relationship between minimum wage (independent variable) and employment/unemployment (dependent/response variables), a pooled time series panel was created using the data described above. A difference in differences regression was run on this panel. This method accounts for possible differences between the treatment and control groups prior to the policy change, as well as all possible difference that could be the result of time. This
73 Statistics Canada, “Labour Force Survey,” accessed January 5, 2018 from https://www.statcan.gc.ca/eng/survey/household/3701. 74 CHASS: http://datacentre.chass.utoronto.ca; Nesstar: http://www.nesstar.com. 75 Government of Canada, “Minimum Wage Database: Hourly Minimum Wages in Canada for Adult Workers,” accessed March 3, 2018 from http://srv116.services.gc.ca/dimt-wid/sm-mw/rpt2.aspx. 76 Bank of Canada, “Inflation Calculator,” accessed February 1, 2018 from https://www.bankofcanada.ca/rates/related/inflation- calculator/. 77 Statistics Canada, Table 36-10-0434-02 Gross domestic product (GDP) at basic prices, by industry, monthly, growth rates (x 1,000,000), and Statistics Canada, Table 17-10-0005-01 Population estimates on July 1st, by age and sex.
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project was conducted data analysis using R, a software that supports statistical computing and
graphics using an open sourced network. This program facilitated the process of working
through data and estimating the relationship between variables.
Results
Table 4. Simple regression of employment rates and unemployment rates on the minimum wage in Alberta and Saskatchewan using data from December 1997 to December 2017 *, **, *** denotes statistical significance at the 0, 0.01, and 0.05 level.
(1) (2) (3) (4) (5) (6) (7) (8)
URa,p,t URa,p,t URa,p,t URa,p,t ERa,p,t ERa,p,t ERa,p,t ERa,p,t Regression All 15-24 25-54 55+ All 15-24 25-54 55+ Real Minimum 1.445*** 1.064*** 1.329*** 2.327*** -0.236*** -0.299*** -0.068** -0.434*** Wage (0.163) (0.197) (0.179) (0.334) (0.022) (0.022) (0.015) (0.066) Province and Yes Yes Yes Yes Yes Yes Yes Yes year FE R2 0.835 0.751 0.844 0.732 0.916 0.803 0.724 0.947 N 240 240 240 240 240 240 240 240
Table 4 above contains the results of a simple regression of employment and
unemployment rates on the minimum wage using data from December 1997 to December 2017
for the four groups specified in the research design. This basic regression considered controls
only for the log of the real minimum wage, the province and the year-fixed effects. The results
showed estimates of coefficients of minimum wage on unemployment between 1.064 and
2.327, all of which are statistically significant to 0.05. It is difficult to compare these values to
literature as very few studies that estimate the effect using the unemployment rate, however, all
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of these values are positive meaning that an increase in the minimum wage leads to an increase
in the unemployment rate. Coefficient estimates of the minimum wage on employment are
typically reported in literature. I found through my regressions that the effect of the minimum
wage on the employment rate resulted in elasticities ranging between -0.068 and -0.434. These
results are very similar to those presented in Canadian literature, where elasticities typically fall
between -0.2 to -0.5. I note that the elasticity is the highest for youth aged 15-24 and those over
55. The 25-54 age group has the smallest minimum wage elasticity at -0.068.
Table 5. Simple regression of employment rates and unemployment rates on the minimum wage in Alberta and Saskatchewan using data from August 2013 to December 2017 *, **, *** denotes statistical significance at the 0, 0.01, and 0.05 level.
(1) (2) (3) (4) (5) (6) (7) (8)
URa,p,t URa,p,t URa,p,t URa,p,t ERa,p,t ERa,p,t ERa,p,t ERa,p,t Regression All 15-24 25-54 55+ All 15-24 25-54 55+ Real Minimum 0.345 -0.505 0.354 1.230 -0.050* 0.062 -0.017 -0.186 Wage (0.171) (0.336) (0.224) (0.360) (0.021) (0.048) (0.026) (0.047) Province and Yes Yes Yes Yes Yes Yes Yes Yes year FE R2 0.978 0.883 0.966 0.950 0.955 0.901 0.839 0.882 N 52 52 52 52 52 52 52 52
Table 5 above contains the results of a similar regression using the time period of August
2013 to December 2017. October 1, 2015 was that date the NDP government in Alberta started
its gradual increase towards a $15 minimum wage. This regression accounts for the 13 months
before this policy change and the 13 months after this policy change. In this case the results
were quite different from the 1997-2017 time period. Here the regression gave estimates of
33 | Page coefficients of minimum wage on unemployment that ranged between 0.345 and 1.230 for all age groups, except 15-24 which had a negative coefficient. Estimates of coefficients of minimum wage on employment ranged between -0.0.17 and -0.187 for all age groups except 15-24, which had a positive coefficient. None of these results were statistically significant.
There are a few reasons why we see no effect of the minimum wage on employment or unemployment during this time period. The first reason is because this time period is very short.
It can be very difficult to yield statistically significant results in a period of only 26 months. Most notable minimum wage studies analyze a period of 20 years or more. The second, and likely most important reason we did not see any significant effects from the minimum wage is that during this time period, both Alberta and Saskatchewan faced very bad recessions. As mentioned, when doing minimum wage analysis like this, confounding variables can have a large impact on the results; this is one such example. In this type of analysis, the goal is to determine if there are any changes in employment or unemployment caused by the minimum wage, however, here the impact of the recession has swamped out the ability to detect these small changes.
Discussion The Cost of the Minimum Wage
Now that I have demonstrated through previous literature and confirmed through my own empirical regression analysis that increasing the minimum wage has a negative effect on employment levels, we must look to understand the cost of increasing the minimum wage.
Before Alberta started to increase its minimum wage in 2015, the minimum wage was
$10.20 per hour. In this section I will estimate how much the increase from $10.20 to $15 per
34 | Page hour cost Albertans. Because not all earners under $15 earned exactly $10.20 per hour prior to the increase, the first step is to determine the average wage of an earner under $15 per hour in
2015. Using the LFS I found that of those earning between $10.20 and $15, the average earnings was $13.35 per hour. Next, I find the difference between $13.35 and $15 per hour. I found that on average, an employer facing an increase in the minimum wage from $10.20 per hour to $15 per hour has to pay their employees $1.65 more per hour. I then determined that in 2015, these earners worked on average 29 hours per week. Given that there are 52 weeks in a year, times by the additional $1.65 per hour, employers are required to pay their employees an additional
$2,488.20 each year. With a total of approximately 291,000 earners under $15 per hour in
Alberta, this adds up to over $725 million in additional wages. This is a great deal of money, and all of the cost is borne by the employers of minimum wage workers, and not by the government who implemented the policy. All calculations for this estimate can be found below:
=>?@AB? CDE@?AF? CD GAB?F = $I. KL M?@ NOP@
$I. KL CDE@?AF? × RS NOP@F⁄G??T × LR G??TF⁄V?A@ = $RWXX. RY/?[M\OV??
$RWXX. RY × RSI, LIW ?A@D?@F = $]RL, ^WL, I^W. XY
Alternative Anti-Poverty Policies
Assuming that there are no negative employment effects from an increase in the minimum wage, how does the cost of an increase in minimum wage compare to other anti- poverty policies. Alberta has a tax credit called the Family Employment Tax Credit (AFETC) that is available to parents with an income of more than $2,760 per year but less than $93,887. The amount each family receives depends on the number of children that they have. For the 2018-
35 | Page
2019 period, this tax credit is expected to cost $153 million but provides support for about
180,000 families.78 This policy is much more targeted at those in need than the minimum wage, it encourages people to work, and it costs much less. Instead of increasing the minimum wage from $10.20 to $15 per hour, the Government of Alberta could have provided nearly 5x the amount of funding to targeted tax credits like the AFETC.
Relative to the minimum wage policies like the AFETC better target those who are in need, however, there are also some disadvantages that come with these types of tax credit policies as well. Employment tax credits only go to those who are employed and those who have a family with children; therefore, this particular tax credit is not available to people who have been laid-off during recession periods or others who are not working. Additionally, many low- income individuals have disabilities or mental illness that prevent them from holding a job and thus they are also not able to benefit from such a tax credit. Governments can redefine the eligibility requirements for such tax credits to provide more support to those in need.
Another aspect of a tax credit policy like the AFETC is that the responsibility to fund the program is on the government. Because the governments has to pay, the implementation of such a tax credit policy will cause them to make one of these three choices, all which have downsides to them:
1) Governments can cut down on program spending elsewhere in their budget. This loss of
funds for other areas and is an opportunity cost that must be considered when choosing
the best policy.
78 Government of Alberta, “Alberta Family Employment Tax Credit,” accessed August 1, 2018, https://www.alberta.ca/alberta- family-employment-tax-credit.aspx#toc-1.
36 | Page
2) Governments can run a budget deficit, which can add up over time and create large
amounts of debt if. While it necessarily bad for provinces to have debt, they must have a
good plan (and closely monitor their debt:GDP ratio) to ensure that they can afford the
debt that they take on and that it will not hurt operations in the future.
3) Governments can increase taxes for citizens. If governments chose this option to fund
such an anti-poverty policy, they must consider the marginal cost of public funds- that is
how people’s income will fall by raising one (1) additional dollar of government revenue
through tax increases.
While tax credits like the AFETC might be more targeted towards those in need, this type of anti-poverty policy still has some downsides. Governments must complete thorough cost-benefit analysis before implementing any anti-poverty policies to understand who the policy would hurt, who it would help, and what funds would have to be used to fund the program (government revenue or privately funded through businesses).
Alberta and the $15 Minimum Wage
I have shown through the regressions reported in the result section of this paper that the minimum wage can have negative impacts on employment and unemployment over long periods of time.
The province of Alberta chose to increase the provincial minimum wage to $15 per hour fully knowing that these effects were a likely outcome. Was this a good policy decision?
The higher the average wages in a province, the less impact an increase in the minimum wage will have on employment. Alberta has the highest average wages of any of the provinces in Canada. As shown in figure 1 in the background section of this paper, Alberta’s average wage has always been much higher than the minimum wage. Therefore, an increase in the minimum wage to $15 in Alberta is relatively
37 | Page unharmful. Comparatively, if a province has an average wage of $15 per hour and the minimum wage increases to $15 per hour, it would have a greater negative impact on the labour market because more businesses would be affected by the change. In summary, while Alberta’s choice to increase the minimum wage to $15 per hour might not be justified as an effective anti-poverty policy, it is not necessarily as detrimental as many popular sources have made it out to be.
Conclusion Policy Recommendations
The minimum wage is widely use and yet widely debated, with large amounts of literature reviewing the effects that the minimum wage can have other factors including employment and poverty. From the previous literature and as supported by this paper, over time the minimum wage has a negative impact on employment. I found coefficient estimates of the minimum wage on employment are negative and statistically significant during the period of
December 1997 to December 2017. The coefficient estimates of the effect of minimum wage on unemployment were positive and statistically significant for this same time period. My results confirm and show that an increase in the minimum wage will decrease the employment rate and increase the unemployment rate (if labour force participation remains constant). In addition, I determined that the cost of the minimum wage increase in Alberta between 2015 and 2018 is over$725 million. Based on my analysis and these findings, I present three recommendations for policy makers when considering the minimum wage:
1. Policy makers should have a clear understanding of who earns the minimum wage in their
jurisdiction. As we saw in the background section, not everyone who earns the minimum
wage are in need. Governments should complete thorough analysis of minimum wage
38 | Page
earners to best understand who will be impacted, either positively or negatively, by any
increases to the minimum wage. This step will ensure that the right group is being effectively
targeted by the policy.
2. Policy makers should be clear about their objectives and create policies that will best meet
those objectives. Governments who are in favor of the increasing minimum wage typically
state that their objective is policy reduction, however, there are also political reasons that a
government might favor this policy. When announcing a policy such as an increase in the
minimum wage, a government should be clear about what they want the policy to achieve. If
a governments goal is poverty reduction, they should first identify the in-need groups and
create policy based around that.
3. Policy decisions should be based on detailed cost-benefit analysis and all related documents
should be disclosed for public debate. When the $15 minimum wage was announced in
Alberta, there was no supporting documentation released stating the costs, benefits or any
other potential outcomes of the policy. Cost-benefit analysis should be presented by the
government before policies are put into place to allow for public education, but also public
scrutiny. This will ensure that the policies are created that meet objectives and cause the
least amount of harm.
In this paper I uncovered who earns the minimum wage in Alberta, the effect of the minimum wage on employment in Alberta, and the cost of the Alberta’s $15 minimum wage.
Governments should consider doing similar detailed analysis before implementing such a policy to understand how they can meet their objectives, who their policy effects, and the costs associated with the policy.
39 | Page
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Appendix A Table A. Percentage distribution of minimum wage workers by province, January to June 2018.
AB BC MN NB NL NS ON PEI QB SK
Aged 15-19 24.8% 33.4% 33.8% 41.7% 28.6% 34.0% 26.1% 30.9% 36.6% 26.9%
Unattached individual, lone parent or spouse/partner in a single-earner couple 9.1% 13.7% 11.8% 17.5% 11.2% 17.8% 10.6% 14.3% 15.6% 9.7%
Spouse/partner in a dual-earner couple 13.5% 17.7% 19.9% 23.0% 16.0% 14.6% 13.8% 15.8% 19.0% 16.6%
Other 2.2% 2.0% 2.1% 1.3% 1.4% 1.6% 1.7% 0.8% 2.1% 0.6%
Aged 20-24 23.3% 22.8% 18.8% 16.5% 24.8% 23.5% 21.9% 25.0% 23.8% 22.0%
Unattached individual, lone parent or spouse/partner in a single-earner couple 9.9% 21.3% 2.2% 1.8% 1.5% 3.0% 77.8% 0.5% 33.5% 0.9%
Spouse/partner in a dual-earner couple 10.8% 7.9% 6.6% 5.7% 9.3% 10.8% 8.9% 11.1% 9.4% 9.4%
Other 2.5% 2.8% 2.5% 1.8% 1.7% 0.9% 2.6% 3.4% 2.2% 2.8%
Aged 25-29 10.5% 7.5% 9.0% 5.2% 6.7% 7.4% 9.6% 8.2% 8.6% 7.2%
Unattached individual, lone parent or spouse/partner in a single-earner couple 4.8% 3.5% 2.3% 3.1% 4.1% 3.2% 4.5% 3.7% 3.5% 2.3%
Spouse/partner in a dual-earner couple 4.7% 3.0% 3.8% 1.9% 1.6% 2.9% 3.2% 3.9% 3.8% 4.0%
Other 1.0% 1.1% 2.9% 0.3% 0.9% 1.2% 1.9% 0.7% 1.3% 0.9%
Aged 30-34 8.8% 7.1% 5.1% 4.3% 7.0% 3.9% 5.7% 2.7% 4.7% 6.6%
Unattached individual, lone parent or spouse/partner in a single-earner couple 2.4% 2.9% 2.5% 1.9% 4.0% 1.7% 2.1% 1.7% 2.0% 2.3%
Spouse/partner in a dual-earner couple 5.5% 3.8% 2.1% 1.7% 2.9% 1.9%p 2.5% 0.9% 2.4% 3.6%
Other 0.9% 0.3% 0.5% 0.7% 0.1% 0.4% 1.0% 0.1% 0.3% 0.7%
Aged 35-39 7.4% 4.3% 5.4% 3.4% 4.1% 4.8% 5.6% 6.5% 4.2% 5.6%
Unattached individual, lone parent or spouse/partner in a single-earner couple 2.2% 1.5% 1.8% 1.6% 2.0% 2.1% 1.8% 2.8% 2.0% 3.2%
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Spouse/partner in a dual-earner couple 5.0% 2.1% 3.5% 1.3% 2.0% 1.3% 3.1% 3.2% 1.7% 1.6%
Other 0.2% 0.6% 0.1% 0.5% 0.0% 1.4% 0.7% 0.5% 0.5% 0.8%
Aged 40-44 5.4% 2.8% 3.3% 3.5% 5.0% 2.9% 5.8% 4.6% 3.5% 6.2%
Unattached individual, lone parent or spouse/partner in a single-earner couple 1.1% 1.4% 1.4% 2.2% 1.1% 1.6% 1.8% 2.7% 2.0% 2.2%
Spouse/partner in a dual-earner couple 4.1% 1.3% 1.7% 0.8% 3.8% 0.9% 3.6% 1.7% 1.2% 3.6%
Other 0.2% 0.2% 0.1% 0.4% 0.0% 0.5% 0.4% 0.3% 0.3% 0.3%
Aged 45-49 4.6% 3.6% 5.2% 2.7% 7.5% 3.7% 5.0% 4.8% 3.4% 3.8%
Unattached individual, lone parent or spouse/partner in a single-earner couple 1.2% 1.3% 0.7% 1.8% 2.1% 1.8% 1.6% 2.8% 1.7% 0.8%
Spouse/partner in a dual-earner couple 2.9% 1.7% 3.4% 0.9% 4.3% 1.4% 2.9% 2.0% 1.6% 2.3%
Other 0.5% 0.7% 1.2% 0.0% 1.1% 0.5% 0.6% 0.1% 0.1% 0.7%
Aged 50-54 4.4% 5.5% 4.9% 5.7% 3.9% 4.6% 6.2% 3.8% 3.8% 6.8%
Unattached individual, lone parent or spouse/partner in a single-earner couple 1.3% 2.6% 2.0% 1.8% 1.4% 3.0% 1.8% 2.3% 2.0% 1.4%
Spouse/partner in a dual-earner couple 2.4% 2.0% 2.0% 3.4% 2.3% 0.9% 3.6% 1.4% 1.5% 4.0%
Other 0.6% 0.9% 0.8% 0.5% 0.1% 0.7% 0.8% 0.2% 0.3% 1.4%
Aged 55-59 4.3% 5.8% 5.8% 10.1% 3.8% 6.0% 6.1% 4.6% 4.2% 5.6%
Unattached individual, lone parent or spouse/partner in a single-earner couple 1.2% 2.3% 2.1% 3.7% 2.1% 2.4% 2.1% 2.4% 1.6% 1.8%
Spouse/partner in a dual-earner couple 2.1% 2.4% 3.2% 5.8% 1.7% 3.2% 2.9% 2.0% 2.3% 3.3%
Other 1.0% 1.1% 0.5% 0.6% 0.0% 0.4% 1.0% 0.2% 0.3% 0.5%
Aged 60-64 3.9% 4.1% 5.4% 4.3% 7.5% 4.4% 4.2% 3.3% 4.4% 5.7%
Unattached individual, lone parent or spouse/partner in a single-earner couple 2.0% 2.1% 1.4% 2.2% 4.1% 2.9% 2.0% 2.3% 2.8% 1.8%
Spouse/partner in a dual-earner couple 1.7% 1.5% 3.7% 1.7% 3.0% 1.2% 1.5% 1.0% 1.4% 3.7%
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Other 0.2% 0.5% 0.3% 0.4% 0.3% 0.3% 0.6% 0.0% 0.3% 0.2%
Aged 65-69 1.8% 2.2% 1.8% 1.8% 0.7% 2.5% 2.7% 2.4% 1.8% 2.6%
Unattached individual, lone parent or spouse/partner in a single-earner couple 1.2% 1.0% 1.3% 1.0% 0.3% 2.0% 1.7% 1.4% 1.3% 1.3%
Spouse/partner in a dual-earner couple 0.5% 0.9% 0.4% 0.7% 0.4% 0.3% 0.6% 1.0% 0.4% 1.4%
Other 0.1% 0.2% 0.1% 0.1% 0.0% 0.2% 0.4% 0.0% 0.1% 0.0%
Aged 70+ 0.8% 1.0% 1.4% 0.8% 0.5% 2.4% 1.4% 3.1% 1.2% 1.1%
Unattached individual, lone parent or spouse/partner in a single-earner couple 0.7% 1.0% 1.0% 0.7% 0.5% 1.7% 1.0% 0.4% 1.0% 0.5%
Spouse/partner in a dual-earner couple 0.0% 0.1% 0.3% 0.1% 0.0% 0.6% 0.2% 1.8% 0.1% 0.6%
Other 0.0% 0.0% 0.0% 0.0% 0.0% 0.1% 0.1% 0.8% 0.0% 0.0%
Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
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