2013 living wage calculation: costs of raising a family in Metro Vancouver rising faster than inflation

May 2, 2013

(Vancouver) $19.62 is the 2013 Vancouver living wage, according to a report released today that calculates the hourly wage that two working parents with young children must earn to cover the real costs of raising a family.

Working for a Living Wage 2013: Making Paid Work Meet Basic Family Needs in Metro Vancouver was published by the Canadian Centre for Policy Alternatives (CCPA), First Call: BC Child and Youth Advocacy Coalition, and the Metro Vancouver Living Wage for Families Campaign. This is an annual update of the original living wage calculation published in 2008.

The living wage is calculated as the hourly rate at which a family with two full-time earners and two young children can meet its basic expenses (including rent, child care, food and transportation), once government taxes, credits, deductions and subsidies have been taken into account.

“The living wage lifts families out of poverty, but it’s based on a bare bones budget without the extras many of us take for granted,” explains report co-author Iglika Ivanova. “It doesn’t cover debt repayments for credit card bills or student loans, and it doesn’t allow the family to save for retirement or for their children’s education.”

The 2013 Vancouver living wage rose by 48 cents from the 2012 figure of $19.14/hour. This represents an increase of 2.5%, almost double Vancouver’s inflation rate of 1.3%.

Transportation, child care and food costs are the some of the big drivers of the living wage increase. Transportation costs jumped by $28 per month, due to increases in the cost of owning and operating a car and a 13% hike in transit fares. Child care costs rose by $25/month, increasing food prices added another $17/month, and MSP premiums rose by 4% in 2013, with another 4% increase slated for 2014.

Low wages are a key contributor to child poverty in BC, with almost half of poor children (43%) living in families where at least one adult had a full-time, full-year job and many others living in families with some paid work (part-year or part-time).

“The living wage is one of the most powerful tools available to address BC’s troubling state of child poverty and working poverty more broadly,” says Michael McCarthy Flynn, Campaign Organizer with the Living Wage for Families Campaign. “It calls on employers to pay wages that reflect the actual costs of living in their communities.”

Thirty-five organizations in Metro Vancouver, employing over 6,000 workers and covering many thousands more contracted service workers, have been certified as Living Wage Employers. These include SAP-Vancouver, Vancity, The Canadian Cancer Society — BC and Yukon Division, the City of New Westminster and Small Business BC’s “Best Employer in 2012,” Eclipse Awards.

“But employers alone cannot eliminate poverty and social exclusion,” says Ivanova. “Governments must be a partner in the solution, because government policies and programs directly affect affordability and quality of life for lower-earning families.”

Increasing the stock of affordable housing, introducing a universal, publicly funded child care system or a national pharmacare or dental coverage program for children and modest income families, would significantly decrease the amount employers need to pay to provide a living wage. For example, the $10/Day Child Care community plan proposed by the Child Care Advocates of BC and the Early Childhood Educators of BC would reduce the Vancouver living wage by $3.36 per hour to $16.26.

To arrange interviews, contact Michael McCarthy Flynn, Living Wage for Families Campaign Organizer at 604-873-8437, or Iglika Ivanova, Economist and Public Interest Researcher, Canadian Centre for Policy Alternatives (and co-author of the report), at 604-801-5121 ex. 232.