Governments must keep pace with means-tested transfers for families if so-called “living wages” in Metro Vancouver exceed $27/hour by 2024.
According to the Canadian Center for Policy Alternatives BC, rental costs have once again pushed Metro Vancouver’s so-called “living wage” estimate above the annual base inflation rate reported by Statistics Canada.
For a family of four in the region to live comfortably this year, albeit with few perks like a vacation abroad, each parent must work full-time and earn $27.05 an hour ($49,231 annual salary). That is an increase of 5.3 percent since 2023claims the November 2024 report Working for a Living Wage.
“Rent has been the most expensive item in Metro Vancouver’s living wage household budget since the calculation was first made in 2008 and this year is no exception,” said Iglika Ivanova, the centre’s senior economist and report author.
The center notes that while headline inflation has declined in 2023 and 2024, from historic highs in 2022, cost increases for essential necessities continue to push up the living wage and financial support provided by government measures such as affordable child care programs and income increases . The proven benefits are being outpaced by rising rental costs.
Housing costs for the “Metro Vancouver residential wage family” have increased 9.5 per cent this year – an additional $276 per month, the report said.
Nearly half a million workers – 37 percent of all paid workers in Metro Vancouver – and a third (31 percent) of two-parent families with children in Metro Vancouver earn less than the living wage, Ivanova estimates based on updated wage statistics.
The center suggests that the main consequences of not meeting a living wage are that families are forced to leave the region; and individuals without children who delay having them anyway, or even decide not to have them at all.
The center also points to an erosion in the quality of life for many people in B.C
“People who work for low wages face impossible choices: buying groceries or heating the house, keeping up with bills or paying the rent on time. The result can be mounting debt, constant anxiety, and long-term health problems.
“In many cases, this means working long hours, often at multiple jobs, just to meet basic needs. Parents ultimately have little time to spend with their families, let alone help their children with schoolwork or participate in community activities, and we are all poorer for it,” Ivanova notes in the report.
Co-author Anastasia French, the center’s Living Wage BC provincial manager, adds that women and racialized workers are disproportionately affected by low wages.
A living wage is calculated based on a person’s income, including government transfers, compared to their costs, such as government taxes and living expenses, including shelter, utilities, food, childcare, transportation, clothing and social participation.
For example, transportation costs are set at $561 per month. This includes the amortized costs of owning and operating a used car, as well as a dual-zone bus pass for one parent.
A living wage does not take into account savings for education and retirement, unforeseen expenses, debt payments, owning a home or “anything other than minimal recreation, entertainment or vacation expenses.”
“Earning a living wage lifts families out of severe financial stress by lifting them out of poverty and providing a basic level of economic security. But it is also a conservative, austere budget without the perks that many of us take for granted,” the report said.
The center notes that while the minimum wage in B.C. has risen with inflation and is now at $17.40 per hour, the living wage in Metro Vancouver has risen dramatically since 2019, from $19.50 to $27.05.
And since 2021, the gap between the two has widened dramatically, after being the smallest ever in 2019, when the minimum wage was $13.85.
The authors state that they will spend more time refining their calculations and estimates.
The center usually produces an annual report for the entire province. In 2023, it found that living wages varied: in Dawson Creek it was $20.64; in Kamloops it was $20.91 and in the Fraser Valley it was $20.66.
The center cites concerns that rental costs exceed government benefits for families, such as free transportation for children, federal dental care, child tax credits and the carbon tax credit.
Many families who earn less than the living wage and sometimes even fall below the poverty line are left out of many programs, the center notes.
The Canadian Workers’ Benefit is not available to families with a combined net income of more than $45,934; the federal GST credit is not available to families with a combined net income of more than $65,084; and the BC rental assistance program is not available to families with a combined gross income of more than $40,000.
As such, the center maintains that “provincial and federal governments should regularly review all low-income transfers and credits to ensure they are not clawed back at income levels that leave many families in dire straits.”
The center conducts public policy research through government grants and donations. It is generally considered ‘left-wing’, but more specifically favors government-driven, means-tested benefits resulting from higher and more progressive taxes.
But the report also notes that it is also up to employers to set living wage standards for their employees.
“More than 450 certified living wage employers in the province have committed to paying both direct and contract workers wages sufficient to support families. Employers who pay their employees a living wage have seen real benefits,” French said.
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