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”Living wage” policy: coming soon to a municipal government near you!

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Beginning earlier this month, all employees and most contractors working for the City of Vancouver must be paid at minimum $20.62 an hour, the so-called “living wage”.  But what exactly is it??  A living wage is very different than the minimum wage, which is legislated by the provincial government.  The “living wage”, as defined by the Living Wage for Families Campaign, calls on employers to pay a salary which would allow a family of four (two parents, two children) to have a specific basket of goods, housing requirements and services. This includes a car, a transit pass, college courses, and sports activities, among other things.

CFIB has been lobbying municipalities against adopting the policy since New Westminster became the first to adopt it in Canada in 2011. While this idea may sound good on paper, in practice it makes little sense.

  • The policy assumes all employees meet this specific family dynamic, which in reality is not the case.
  • It’s costly. An earlier estimate pegged the cost to the City of Vancouver at around $1 million annually.  To pay for this, taxes or fees will increase, and municipalities spending problems are already well documented.
  • The $1 million estimate also does not take into account the effect on local businesses. To provide services to the city, they will need to also pay $20.62/hour or not be able to bid on city contracts.
  • It will increase competition from local governments to attract employees due to increased wages.

Other municipalities who have either committed to adopt or have adopted so-called living wage policy are: Parksville, Quesnel, Port Coquitlam, and New Westminster. Unfortunately, there are sure to be more and more local governments that jump on the bandwagon, meaning higher costs and headaches for independent businesses.