Despite the minimum wage increasing 3.9 per cent this weekend, 740,000 British Columbians, or one-third of the employed population, are earning less than a so-called “living wage” — the amount of money necessary for two people to raise two children in a given community, according to the Canadian Centre for Policy Alternatives B.C.
“The statistics clearly show who these workers are: the majority are over the age of 25, with women and racialized workers disproportionately affected,” said Iglika Ivanova, CCPA-BC senior economist who analyzed the Statistics Canada data.
A living wage is said to be the minimum amount of money to cover basic necessities and “escape severe financial stress.”
A living wage varies by community, and factors in local housing costs and expenses like food and child care. It assumes workers take public transportation, take a “modest” vacation, and accounts for government supports, such as the Child Tax Benefit. It does not cover debt payments, savings for retirement, or savings for a down payment on a home; nor would it cover any extra costs of caring for disabled, seriously ill or elderly family members.
“Despite the June 1 increase to $17.40 per hour, the minimum wage remains over $3 per hour lower than the lowest living wage in B.C. (currently $20.64 in Dawson Creek). In B.C.’s largest cities, Metro Vancouver and Greater Victoria, the gap between the minimum wage and the living wage is $8 per hour,” Ivanova’s study noted.
Hundreds of thousands of workers earn less than living wage
The living wage threshold in Metro Vancouver families amounts to earning $25.68 per hour, and in Victoria, the rate is $25.40 per hour. In Metro Vancouver, 495,600 workers earn less than $25.68 per hour.
“In the current affordability crisis, workers are stuck in the gap between the living wage and the minimum wage and face impossible choices — buy groceries or heat the house, keep up with bills or pay the rent on time,” said Anastasia French, Living Wage for Families BC provincial manager, via a joint press release with Ivanova Thursday.
French says families under the living wage threshold risk mounting debt and thus stress, anxiety and further health and social problems.
Ivanova says the data dispels a belief these workers are mostly young; in fact, 56 per cent of the 413,100 workers — or 231,336 total — earning less than $20 per hour are over the age of 25. Looking more deeply into those numbers shows 123,400 workers earning less than $20 per hour are between 25 and 44 years old.
Furthermore, 59 per cent of those earning less than $20 per hour are women; six per cent of such earners (male or female) identify as Indigenous.
Raise minimum wage to $20/hour to stimulate the economy, says report
B.C. currently pegs minimum wage to inflation. The centre says the minimum wage ought to be raised to $20 per hour now and then pegged to inflation moving ahead.
The centre speculates that by boosting the earnings of low-wage workers it will stimulate the local economy “because these workers are likely to spend almost all of their extra income in their communities, supporting local businesses, for example by eating out once in a while and participating more actively in community activities.”
The centre, which generally proposes higher taxes and greater distribution of wealth, is also advocating for three measures to fix affordability for this large cohort of British Columbians: first, to build affordable, subsidized housing at greater scale; second, to create an affordable food strategy; and third, to expand and improve public transportation.
