Research Report - Living Wage: An Introduction

Research Report - Living Wage: An Introduction

Many Canadian families are finding it difficult to make ends meet even when they work long hours. The Canadian Centre for Policy Alternatives (CCPA) reported that Canadian families in the bottom half of the population, those who have the lowest incomes from a 50% cut-off, are working more compared to families in the 1970’s, yet they have experienced a 24% drop in total earnings. Long work hours means that less time is available for family activities leading to difficulties balancing work and family responsibilities. Furthermore, the 2010 report card from Campaign 2000 reported that 1 in 3 low-income children have a parent who works full time throughout the year and there are almost 400,000 full-time adult workers who earn less than $10 an hour. In addition, they reported that in 2008 35% of jobs were part-time, temporary, contract or self-employed. The lack of good-paying jobs which provide sufficient hours and benefits are making it difficult for families and individuals to live above the poverty line. For many Canadians then, having a job does not guarantee a route out of poverty, and in many cases makes them working poor. According to the CCPA, the working poor are individuals who work year-round and full time but receive wages that are insufficient to lift oneself out poverty. Time constraints due to work-family conflict, the inability to afford the basic essentials of live, and feeling the unrealistic expectations to survive on a limited income are some of the leading causes of stress for low income parents. The National Longitudinal Survey of Children and Youth showed that parents with low incomes are twice as likely as parents who have middle- or high-incomes to be chronically stressed. These high levels of stress can lead to poor health, which in turn increases absenteeism for employers and puts a greater strain on our health care system. The concept of a living wage, or a rate of pay high enough that allows families to afford a decent and dignified life, has been introduced as a way to improve the livelihoods of the working poor. About 125 municipalities in the US have adopted living wage policies to allow their public sector workers to receive wages to lift them out of poverty. Also, many leading companies and public sector employers in Britain have signed living wage agreements that apply both to direct and contract employees and the results of the new policy have demonstrated its success. For example, a study of low-paid cleaners at the Royal London Hospital done in 2005, found that after receiving the living wage 85% of the employees surveyed were able to pay for food and basic expenses. Before the wage increase, less than half were able to do so. Although Canada has been slow to implementing living wage policies, some jurisdictions have taken important steps towards its adoption. Recently the city of New Westminster and Esquimalt in British Columbia have become the first municipalities in Canada to pay living wage rates to city employees and city contractors. Furthermore, many private sector employers in BC have become official living wage employers, including Vancity Credit Union, the largest company to adopt the policy so far. These decisions are the result from a successful campaign done by CCPA in collaboration with various groups in Vancouver and Victoria. Through this initiative, the CCPA encourages Vancouver employers to sign on to the commitment to ensure that all of their employers and service providers are paid a living wage. Many lessons need to be learned from those who have used living wage policies as a tool to fighting poverty and this report explores some of the issues related to their implementation.

PUBLICATION DATE: 2011
LOCATION: Canada

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