December 2003: Making a Living

Canada’s social activists should mount a “living wage” movement
December 1, 2003

The goal of many social reformers dedicated to improving conditions for the poor is to enable them “to be able to come into society without shame.” Policy measures therefore must do more than ensure that everyone has a minimum income. People need more than just enough to get by if they are to live their lives fully and have equal status as citizens. They must have access to material resources at a level that will allow for full participation in community life.

In short, in a society where income is linked to work, people should receive a “living wage,” not just a minimum wage. A living wage would be the equivalent of Statistics Canada’s Low Income Cut-Off (LICO) plus, with adequate hourly rates set in each community based on different local rental housing and other costs. A rough estimate would call for no less than $12 an hour for a 40-hour work week, or about $24,000 a year.

The harsh reality is revealed by the 2000 census data. About 16.4 million Canadians (15 and older) had employment income that year, but half of them--8.1 million--were paid less than $25,000 a year, meaning that they were either below a living wage or at or slightly above it. Of this number, 2.3 million had less than $5,000 in employment income, and 3.2 million had between $5,000 and $15,000. Clearly, these 5.5 million Canadian workers need a raise or more work, or both.

The 2.6 million earning between $15,000 and $25,000 are relatively better off, but could hardly qualify as middle class. Their economic situation depends largely on their social circumstances (married or single, young or old, healthy or sickly, number of dependents, etc.), and housing costs--but in any case they can have only a very modest living standard. Without additional income support, for example, they would find it difficult, probably impossible, to afford a post-secondary education for their sons and daughters.

To meet StatsCan’s LICO level, a single person living in a city of more than 500,000 would need to earn $9.56 an hour, and a single parent with one child would need $11.66 an hour. These hourly rates (for a 32-hour week) fall well short of actual existing minimum wages in Canada, which average less than $7 an hour. None of the provincial minimum wages come near the LICO levels, which are the minimum needed to rise above poverty.

Then there are the 7.5 million Canadians with no employment income at all.

Simply to keep the poor alive and off the streets, their inadequate wages or complete lack of income must be supplemented by social programs as well as food banks and other charitable supports. But, although the number of food banks has increased, government funding of social programs has been slashed over the past 20 years, starting with the budget cuts inflicted by the Mulroney government in 1984 and further deepened by the Chrétien Liberals in Paul Martin’s budgets since 1995. These cutbacks were callously designed to force people to accept lower wages and poorer employment conditions, and in that objective they succeeded. If Canadians’ lives have been made worse as a result, that is considered an acceptable price to be paid for the creation of a “flexible” work force and the diversion of more income from workers to employers and investors.

Of course, most governments that implemented these regressive policies concealed their intent behind excuses such as the “need” to reduce their deficits or debts, or the “need” to cut taxes. But several, including the governments of Ontario, Alberta, and most recently B.C., have openly attacked social spending. As part of that strategy, they refrained from increasing their minimum wage rates, which over time have been eroded by inflation, further impoverishing those at the bottom of the income scale.

It is within this climate of government and corporate “restructuring” that the campaign for a living wage should be situated. Such a movement would bring together social reformers, trade unionists, and other activists united in a concerted effort to help workers at the low end of the labour market and give them the opportunity to make a decent living. Without such a boost for wages, the downward pressure on social programs is likely to continue.

A living wage would be paid to individuals, but a good portion of the money would ultimately come back to the community in the form of taxes, rent, and expenditures on food, transportation, and other basic goods and services. Although wages are usually depicted as “costs,” it is hard to imagine economic prosperity being enhanced by the kinds of reductions in low-wage incomes we have seen in recent years. It makes more sense to think of rising wages as representing more income for the providers of goods and services to low-income workers--and for the community at large.

How could most Canadians be opposed to the provision of a living wage? Is it fair to have so many of our fellow citizens mired in poverty? How many of us who are fortunate to live above the poverty level would begrudge an adequate income to the 54% of adult Canadians--12.9 million people--now living in poverty? Surely, at the very least, a campaign to have the 5.5 million poor working Canadians paid a living wage would win broad public support.

We could draw on the energies of the coalitions that were built to fight the major battles of the last 50 years

--for such worthwhile goals as women’s equality and better labour standards, and against such harmful policies as free trade and environmental pollution. A similarly strong social movement could and should be organized for a living wage, starting with an educational drive to show Canadians how low-wage work demeans and shames--and economically hurts--the community at large, not just the affected workers themselves.

The initial approach would be to persuade employers in both the public and private sectors to have an independent audit done of their wage and salary practices, working with their unions if they’re organized, and with the aim of being “certified” as living-wage employers. Employers who fail to win certification--or who refuse to have such an audit done--would be perceived as exploiters of cheap labour.

There will be resistance to such a campaign. Powerful business organizations like the Canadian Council of Chief Executives, the Chambers of Commerce, and the Canadian Manufacturers’ Association have all been strong opponents of minimum wage increases. They see wages as strictly a cost that should be kept as low as possible, so as to maximize profits. They also see low wages as a cautionary mechanism for other workers, and one that helps to “discipline” the labour force as a whole. But it is important to keep in mind that employers have historically opposed all efforts to improve the pay and working conditions of their workers. It took years of struggle to win the right of workers to form and join unions, and then to lower working hours and raise their wages. But these struggles were won, and with the same effort and determination, the fight for a living wage can also be successful.

An effective living wage movement has been under way in parts of the United States for the past several years, with low-wage workers, unions, and supportive voters and citizens joining together to promote the concept at the municipal level. The premise is that people should be able to afford to live in the cities where they are employed. Typically, such a campaign starts with persuading an employer that is publicly funded, such as a city council, to adopt a policy of signing service contracts only with companies that agree to pay employees an agreed living wage. Several U.S. cities, including Baltimore, have enacted this policy. Other targeted employers include universities. One recent high-profile living wage campaign has been aimed at Harvard, which had been exposed as paying many of its employees at below-poverty levels.

The strategic objectives for a living wage movement go beyond the basic issue of wages. The goal is to create more community solidarity, building a sense of equality and citizenship. But recognizing the vital social role played by wages is important. Defining a living wage is one way of getting debate and discussion started around this subject.

Starting with StatsCan’s LICO figures as the social minimum income, research is needed to show exactly what income is needed by individuals and families for rental housing, for adequate food and clothing, for public transportation, for attendance at cultural events, for participation in sports and recreation, for access to computers--in short, for the benefits of equal citizenship.

Low wages limit access to many of these basic living standards. They also severely restrict family opportunities for educational advancement. Our society agrees, in theory, that everyone should be able to pursue their aspirations to the limit of their abilities and work ethic. That is about as close as we come to describing the “just society.” Yet the research clearly shows that educational attainment is limited by family income. Poor families may produce scholarship students, but in general the steep costs involved make higher education prohibitive for such children. This is an injustice that a living wage could help enormously to correct.

The social significance of a living wage movement is to focus public attention on some important ideas. People work to meet one another’s needs: the economy is about little else. Work belongs to those who perform it, but the benefits flow to all those whose lives are bettered by it. When people are paid less that what they need for a decent living, they are victimized, but their neighbours also suffer the social consequences. Trying to build a healthy and egalitarian society on the backs of low-income workers is self-defeating.

In a climate of poor economic opportunities for many Canadians, our business, media, and political leaders have opted for tax cuts that further enrich the wealthy, and for social program cuts that further impoverish the poor. Building a living wage movement is one way of reversing these inequitable right-wing policies.

Justice requires no less than a living wage for all. Let those of us who agree with that objective act together in an all-out effort to achieve it.


(Duncan Cameron is a former president of the CCPA. He teaches political science at the University of Ottawa.)