It Pays To Pay A Living Wage

Canadian communities are embracing “living wage” campaigns
May 1, 2013

Work should lift us out of poverty.

It's a simple aspiration, an equation many of us believe in, but one that eludes far too many Canadians.

At last count, 1.8 million people working in this country were not earning enough to pull themselves and their families out of poverty. That includes 540,000 employed full-time, working full-year around, but still living on incomes below Statistic Canada's low income cut-off. They are Canada's working poor.

Provincial minimum wages aren't cutting it. They are arbitrary, politically derived figures – not based on evidence and not coming close to meeting the actual cost of living in Canadian communities. As a result, more and more individuals and families are slipping into poverty as minimum wages fail to keep pace with the cost of living.

The Living Wage is the solution. It sets a different standard and challenges us to think about the social and economic well-being for everyone.

The living wage is the amount of money workers should earn – based on a 35-hour work week - to meet their family's basic needs and to ensure inclusion in community life. Living wage rates differ from community to community as they uniquely calculate the costs of living in each city (Vancouver's rate is $19.14/hr, in Toronto $16.60/hr, and in Hamilton it is $14.95/hr). The calculation is fiscally responsible: it includes provisions for basic needs such as rental housing, food, clothing, child care, transportation, and medical expenses. The living wage also enables modest opportunities for social inclusion – such as children's recreation. It's a bare-bones budget; calculations do not include the costs of home ownership, debt repayment, or savings.

Paying a living wage isn't just about meeting basic needs – it's also about enabling people to participate in their society and giving them opportunities to shape their own lives and define their communities. It's about promoting dignity and opportunity in the workplace. It's about building stronger, healthier, motivated, and innovative communities and about encouraging economic prosperity for all.

From British Columbia to Nova Scotia, many employers are now working with advocates to adopt living wage policies. Last year, B.C.'s VanCity Credit Union became the country's largest employer to adopt a living wage policy.

New Westminster, B.C. became the first municipality in Canada to officially become a living wage employer in 2010. Kamloops, Calgary, Saskatoon, Kingston, and dozens of other Canadian cities are actively engaged in living wage discussions. They are joining close to 150 jurisdictions in the United States that have adopted living wage policies. At the recent London Olympics, more than 130,000 employees benefited from living wages as those Games became the first "Living Wage Olympics."

Progressive employers in the private, public, and non-profit sectors are considering the benefits of paying their employees a living wage. Where living wages have been implemented, studies show that productivity improves and there's a significant reduction in training costs and absenteeism. A living wage also results in a direct and immediate boost in the local economy: Employees who earn more spend more on goods and services, driving local economic activity and creating more jobs.

In March, the Hamilton-Wentworth District School Board (HWDSB) became the first elected body in Ontario (and largest school board in Canada) to declare itself a living wage employer. It was a big step, but one that made a lot of sense. The school board's greatest challenge is the city's 20% child poverty rate. There are currently enough children utilizing food banks in Hamilton to fill 370 classrooms. Poverty poses enormous challenges to a child's ability to learn, and is linked with higher rates of poor health, hunger, anxiety, and mental health issues, as well as learning and behavioral disabilities.

HWDSB has over 7,000 employees, most of who live in Hamilton and the surrounding area. By ensuring they receive a living wage, the school board helps the City of Hamilton to reach its goal: to make Hamilton the best place to raise a child.

A "Canadian Living Wage calculation framework" was presented in April as representatives from 35 communities came together in Toronto at the "Cities Reducing Poverty" summit. Developed through the collaborative leadership of Vibrant Communities Canada, the Canada Centre for Policy Alternatives, B.C.'s Living Wage for Families, and several other provincial and local living wage campaigns, the framework sets out principles and provides a universal guideline to help cities calculate their own living wage.

The CCPA's Ontario office has also embarked on a project to profile the benefits to families, employers, and communities of living wages and higher minimum wages.

Exciting things are happening. Canadians are coming together, embracing living wage initiatives, and saying "Yes" to healthier, stronger, and more inclusive communities.

(Alex Johnstone is an elected Trustee with the Hamilton-Wentworth District School Board representing Wards 11 and 12. Tom Cooper is Director of the Hamilton Roundtable for Poverty Reduction. For more information on the Living Wage Hamilton campaign, please visit