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The harsh reality of a “living wage”

You may be wondering what exactly a “living wage” is. So are we.

In theory, a living wage is the amount a person would need to earn in order to afford shelter, food, childcare, and other necessities of life. In reality, living wage calculations done by municipalities include costs that are just not realistic.

What does a “living wage” even cover?

Let’s put the “living wage” into context. A “living wage” salary includes enough money for: two college courses a year, birthday presents, and family outings. You can find out the other ludicrous costs you would be subsidizing as an employer, in this report by the Canadian Centre for Policy Alternatives.

How this could hurt your business

Municipalities across the province are being asked to adopt this policy, and some already have. If actions are not taken, a “living wage” may soon be coming to your city!

There are three harsh realities that come with a living wage:

  1. Small businesses will be hard pressed to compete with municipalities offering such an inflated salary.
  2. Employers who can’t offer $20 an hour to employees will be unable to compete for government contracts.
  3. Municipalities that can’t afford the wage will need to raise taxes or cut services to pay for the increase in labour costs.

“Living wage” a drastic increase over minimum

As of September 2017, BC’s minimum wage is currently set at $11.35 an hour. The most recent municipality to adopt a "living wage" was Vancouver, with a whopping $20.64 as of 2017. The cost of this policy in Vancouver alone is estimated at approximately $1 million every year.

This may seem like just a small piece of their budget, but the question is how much (and where) will taxes go up to support this increase in costs–especially considering they already have a significant spending problem.

Other municipalities have implemented the “living wage” policy, and it’s significantly higher than the minimum wage: Prince George ($16.90); Victoria ($20.05); Kamloops ($17.95); Revelstoke ($18.87).

September 11, 2017

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