The Alberta Average Weekly Earnings Index (AAWEI) is probably something most of us are not too familiar with, but we should be.
Right now city council is mulling over whether or not its members should take a pay increase in line with the AAWEI. The theory is that the salaries of city councilors and the mayor should increase by the same amount as the average salary for Albertans. However, the important factor there is the word Albertans, not Edmontonians.
The Government of Alberta’s weekly economic review shows AAWEI growth of 4.5 per cent from October 2010 to October 2011. The estimated increase for the entire year is currently estimated at 5.35%. However, that number is not a true picture of how much the average base salary has actually increased.
If you look at the Statistics Canada information, you will notice that the AAWEI includes overtime earnings. Though things are better in Alberta than in other provinces, we are not seeing the kind of economic growth we experienced in 2008 before the economy went into a tailspin. As a result, employers are not hiring at the same rate. When that happens there tends to be much more overtime worked and that skews out the salary numbers.
An increase in councilors’ salaries based on the estimated AAWEI for 2011 would take their salaries to $87,955. That dollar number doesn’t look too far out of line until you realize that about $29,000 of it is tax-free. Assuming a quite modest 22 per cent effective tax rate, a councilor’s real purchasing power would be equal to a salary of about $117,000. And that number doesn’t include the more than $6,000 they receive as a car allowance.
So those of us who aren’t civic politicians have to make about $123,000 to achieve the purchasing power of our councilors. Alas and alack we would all have to be in the top 5 per cent of individual earners for that to be the case.
The average family income for Edmonton for 2011 is estimated at about $99,000. So there is a significant gap between what the average family in the city makes and what a councilor makes. I believe that rather than tie salary increases for city councilors and the mayor to the AAWEI, it would be much fairer to the increases to the increase in the average family income of Edmontonians. What do you think? Is your family income going up 5.35% this year?
