Getting to a living wage

In 2003, nearly one in four workers (23.8%) made less than $10 an hour. Ten dollars an hour is the rate that assures that a single adult who works full-time all year will earn enough to rise above the before-tax Low Income Cut-Off, Canada’s unofficial poverty line.

UNICEF reports on child poverty in rich nations have documented that countries with a high proportion of low-wage jobs will have a high level of child poverty. This finding underscores that child poverty is about family poverty, and that part of the solution lies in improving living and working conditions for all people.

Progressive practices

People are pursuing living wages along several different paths. One route is to encourage employers to pursue progressive employment policies. These include higher wages, extended health benefits, training, etc. In part, these campaigns aim to convince employers that better employment practices make business sense. They make it easier to hire and retain committed staff, paying off in higher productivity and lower costs. This approach is being pursued in Waterloo and Niagara, Ontario, and in Victoria, B.C.

Municipal living wage by-laws

Another route includes municipal living wage by-laws. People in Calgary and Niagara are crafting municipal living wage by-laws. If adopted, they will require all businesses contracting to do work for the city to pay their workers a living wage.

Municipal by-laws often set a higher standard for pay and benefits than $10 an hour. And the by-laws re-enforce the message about policy integration. Many public programs – including wage supplements, child benefits, and subsidized housing – are income tested. The lower your income, the higher the benefit you are eligible to receive. It makes little sense for one public institution – municipal governments in this case – to contract out work that keeps people in poverty and imposes public expenses on taxpayers and different levels of government.

Liveable minimum wages

A number of campaigns, such as Ontario Needs a Raise and Manitoba’s Just Income coalition, aim to raise legislated minimum wages. In Ontario, the call is for $10 an hour. The principle is that the minimum wage should be high enough so that a single adult with fulltime work will earn enough to live above the poverty line.

Working income tax credits

The 2007 federal budget introduced a new Working Income Tax Benefit. The idea is that for people who do not earn enough from employment, a refundable tax credit will help lift them out of poverty. The benefit levels proposed by the budget – up to $500 for an individual and up to $1,000 for a family – raise the question of whether the program can achieve this goal.

There is also concern that the benefit is a costly subsidy to maintain a low-wage and therefore low-productivity economy. However, for people who will not be able to work full-time, full-year for one reason or another, such as a work-limiting disability or family responsibilities, a workincome credit should apply and could complement higher minimum wage rates and progressive employment practices.

Affordable public services

Getting to living wages for all and a better quality of life for communities requires more than a dollar figure for the hourly wage. Opportunities Niagara found that the lack of affordable child care, extended health benefits and access to public transit posed barriers to parents earning a living wage.

For example, there are decentpaying jobs in Niagara Falls, but people in other communities in the region could not get to those jobs because there was no regional public transit. And employers could not find enough employees for the same reason. That led the people at Opportunities Niagara to launch the "Jobs Bus," a partnership between businesses and the region to help connect workers and employers.

Escaping the low-wage trap

These different routes to a living wage are not mutually exclusive. Many local living wage campaigns combine these different approaches: championing progressive employment practices, urging living wage by-laws, supporting minimum wage campaigns and focusing on the need for affordable services.

Right now, a low-wage trap is hampering Canada’s economy and keeping too many Canadians in poverty. That situation cannot change without serious efforts across all parts of Canadian society to improve living standards, especially for those at the bottom. These efforts will move forward faster as more individuals, businesses and communities get on board the movement for living wages across Canada.

The Catalyst, spring 2007, Volume 30 / Number 2