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Understanding the Living Wage

Oct 19, 2017 Editor

Central Saanich takes the pledge to become a living wage employer and client.

by Sue Stroud, citizen reporter

The District of Central Saanich is the first local government in the Capital Region to pass a motion supporting what’s called a Living Wage and Mayor Ryan Windsor hopes that other communities will follow suit.

Different than the minimum wage, a Living Wage is the amount of money that it actually costs to live. The wage rate differs from city-to-city, but how it is
calculated is the same.

Getting companies, businesses and municipalities to think about this issue is very important.

Conversely, the minimum wage is simply the minimum hourly wage that businesses are required by law to pay their employees. It has little to do with cost of living, and more to do with the government of the day. It’s a province-wide rate. BC’s minimum wage is currently $11.35 (liquor servers’ wage increased to $10.10).  And while the new provincial government has promised a significant increase in the wage, raising it to $15 by 2021, some say that it’s too little and too late.

Irene Lanzinger, President of the BC Federation of Labour, told the CBC in a recent interview, “We really need to get to 15, because that is the wage that gets you just slightly above the poverty line. And then we need to talk about how we actually have a minimum wage that is a living wage.”

The Capital Region’s Living Wage rate for 2017 is $20.01 an hour, almost double the current minimum wage.

The calculations for the Region’s Living Wage rate are done by Marika Albert, the Executive Director at the Community Social Planning Council.  Albert follows the formula first developed by Tim Richards in 2006, and then further refined by the Canadian Centre for Policy Alternatives in subsequent years.

The Living Wage is modeled on a family of four with two full-time income earners requiring a three-bedroom apartment. The model takes into account the contents of that apartment, utility costs, insurance, internet access, two cell phones, food, clothing, transportation (owning a car and using transit), replacing small appliances, laundry, banking costs, paying MSP and non-MSP health expenses, two weeks of pay for emergencies, adult education (upgrading), modest entertainment and the ability to participate in community life like everybody else.

Much of the information to build the model is gleaned from Statistics Canada and is based on the reasonable cost of living for one year in a particular community. You’ll find links to the Capital Region’s 2017 report online.

This year’s Living Wage for the Capital Region is down slightly from previous years. Albert credits federal changes to the Canada Child Benefit and the increased amount parents can claim for their childcare expenses for the drop.

A Living Wage that is nearly double the current minimum appears difficult to reach, but Albert tells us that good policy can bridge the gap. “$10 a day childcare would reduce the Living Wage in Victoria by about $3 per hour. The elimination of MSP would further lower the wage by about a dollar per hour. Currently,
families paying MSP are paying almost $2,000 a year for access to health care. These two examples demonstrate the power of good public policy”

The Living Wage is limited in that families can’t save for a child’s education, they can’t save for retirement or holidays or take care of elderly relatives, they cannot easily afford child care and they can’t save for a down payment on a house.

There are social subsidies available to help like BC Housing’s Rental Assistance Program, but in most cases the subsidies have a very low cut-off threshold making many people working below the living wage ineligible for assistance.

“If we have super strong policies and programs in place the government is then absorbing the cost rather than having it become a burden to small businesses so we are asking small business operators to start lobbying for such supportive policies,” said Albert, “getting companies, businesses and municipalities to think about this issue is very important.”

Poverty affects the whole community through increased costs in many areas. “If you’re working full time you should not have to be living in poverty. People should not have to work multiple jobs to make ends meet and there is a direct impact on the cost of health care when they do,” says Albert.

“Low-income families are not only more vulnerable to poor health than those earning a Living Wage, they use more health-care resources because illness can make it harder to get out of poverty. Poverty can lead to sickness because of inadequate housing, poor nutrition, and less access to preventative health care. In fact, poverty costs British Columbians $1.2 to $3.8 billion a year in increased health costs, according to the Canadian Centre for Policy Alternatives and BC Healthy Living Alliance,” explains Albert.

This is only one of several concerns for B.C. including increased crime and policing costs, weakened local economies, increased debt and educational failure and one of the highest child poverty rates in Canada.

And local government seems to be listening.

As of June, 2017, Central Saanich joins the City of Vancouver, New Westminster, City of Quesnel, City of Port Coquitlam and the Huu-ay-aht and Yuułu-ił-atḥ First Nations ensuring that all employees and contractors in Central Saanich are covered by the Living Wage.

Central Saanich Mayor, Ryan Windsor hopes that other communities will be encouraged to make a decision in favour of a Living Wage. “For us it’s about ensuring our employees are receiving a wage that reflects the true costs of living in our community,” says Windsor.

In Saanich, Coun. Colin Plant brought forward the Living Wage to their Finance and Personnel Committee back in 2015 and felt his colleagues were interested. “They were supportive of all full time employees receiving the Living Wage but had concerns about part time employees and whether all categories should receive the wage,” he said. He said that there was concern that lifting the lowest wage may the affect all wages and added, “We didn’t talk to CUPE about this at the time, but it may be time to revisit the issue.”

Watch for more on this subject in upcoming issues.