Financially Secure Employees Build Profitable Businesses
Written by Shahina Hanif
Employees who can meet their basic needs work better, stay longer, and cost less to replace. For employers, paying a living wage is not only about fairness; it is a strategic investment in long term business efficiency and profitability.
A living wage reflects the hourly income required for individuals to meet basic needs and participate in their communities. It excludes additional benefits, perks, or paid leave beyond legislated minimums. In 2025, living wage rates across Alberta range from $18.15 in Medicine Hat to $31.80 in Jasper (Living Wage Alberta, n.d.). Despite these higher costs of living, Alberta’s minimum wage remains $15.00 and has not changed since 2018 (Brouillette et al., 2017). Recent evaluation of living‑wage employers in Alberta shows that businesses paying a living wage experience higher staff retention, stronger business growth, and increased customer loyalty, while employees benefit from greater financial stability and local spending power (Vibrant Communities Calgary & Alberta Living Wage Network, 2025).
Research shows that low wages may appear cost effective but often create higher long term business expenses. Brouillette et al. (2017) note that wage levels influence employment stability and labour income. Cascio (2006) provides clear evidence that low wages generate hidden costs through turnover, reduced productivity, and lower employee engagement.
A Harvard Business Review comparison between Costco and Wal Mart’s Sam’s Club illustrates this dynamic. Costco pays higher wages and offers stronger benefits, resulting in significantly lower turnover at 17 percent compared to Sam’s Club at 44 percent. Because replacing employees is expensive, Costco’s annual turnover cost is estimated at $244 million, while Sam’s Club reaches $612 million (Cascio, 2006). Costco’s better paid workforce is also more productive and loyal, contributing to lower theft and higher profitability.
Stanford (2024) documents that Alberta’s historic wage advantage has disappeared as real wages have stagnated while prices and living costs have climbed. He also finds that Alberta has experienced the “slowest wage growth of any province while facing equally high inflation, which has placed significant downward pressure on living standards” (Stanford, 2024). Employers who pay a living wage stand out as competitive, attract and retain workers who can afford to live in the province, and strengthen overall business performance.