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Families who work for low wages face impossible choices -- buy
clothing or heat the house, feed the children or pay the rent. The
result can be spiralling debt, constant anxiety and long-term health
problems. In many cases it means working long hours, often at two or
three jobs, just to pay for basic necessities. Parents end up with
little time to spend with their families, help their children with
school work, or participate in community activities.
For six years running, B.C. has had the highest child poverty
rate in Canada. The story of child poverty is very much a story of low
wages. More than half of B.C.'s poor children (56 per cent) have at
least one parent working full-time all year. That's why the living wage
is one of the most powerful tools available to address this troubling
state of poverty in B.C.
In 2008, the Canadian Centre for Policy Alternatives, the First
Call Child and Youth Advocacy Coalition, and Victoria's Community
Council copublished the inaugural report Working for a Living Wage. That
report calculated that the living family wage was $16.74 an hour in
Metro Vancouver and $16.39 an hour in Metro Victoria. Since then,
however, family costs have continued to rise and changes have been made
to government taxes and transfers.
Today, the CCPA, First Call, and the Living Wage for Families
campaign released an updated 2010 Living Wage for Metro Vancouver -- it
is now $18.17/hour.
Importantly, a living wage is not the same as the minimum wage,
which is the legal minimum all employers must pay. The living wage sets a
higher test -- it reflects what earners in a family need to bring home,
based on the actual costs of living in a specific community. It is the
hourly rate at which a household can meet its basic needs, taking into
account both government transfers to families (such as the Canada Child
Tax Benefit) and deductions such as income and payroll taxes.
The calculation is based on a family of four with two young
children, and presumes that both parents are working full time.
(Importantly, the living wage is also enough to support a single parent
with one child.) But this is also a conservative budget, with virtually
no wiggle room for extras many of us take for granted. It does not cover
items such as: credit card or other debt/interest payments; savings for
retirement; or savings for children's future education.
The 2010 Living Wage is 8.5-percent higher than two years ago.
What's driving the increase? The food amount is up considerably,
according to data from the Dietitians of Canada. Rent increases are also
a big driver, according to CMHC data. And child care fees jumped
$113/month after federal and provincial cuts that effectively cancelled
out what families now receive in the federal Universal Child Care
Benefit each month.
Notably, the costs of these essential items that low-income families
cannot avoid have increased by more than the general rate of inflation
(CPI).
...
Research has shown that paying living wages has concrete benefits
for employers, including increased morale and productivity levels,
reduced recruitment and training costs, and improved customer
satisfaction.
In a time of economic recession or jobless recovery, it is
particularly important that public-sector employers (municipalities,
school boards, health authorities, etc.) and financially healthy
private-sector companies mitigate the downturn by enhancing the earnings
of low-income families. Given that low-income families tend to spend
almost all their income in their local communities, boosting the
earnings of these households is one of the most effective ways to
stimulate the economy.
Government policies and programs also have a direct impact on the
living wage calculation. If governments increased transfers like the
Child Tax Benefit or the BC Rental Assistance Grant, then the living
wage would be less. Similarly, if we had a universal publicly-funded
child care system, the living wage would be dramatically less. Given
this, a key way employers can reduce the payroll costs of the living
wage is to advocate for these kinds of progressive policy changes.
- reprinted from The Vancouver Sun