Andrew Jennings is a 35-year-old father of two children. He works 40 hours a week, every week as a customer service associate for a contact centre in Toronto. He earns a basic minimum wage of $11.40 an hour and his monthly take-home pay after deductions is $1,500. Since childcare is expensive, Jennings’ wife Mai decided to be a stay-at-home Mom to take care of their youngest daughter. Jennings also drives the Uber at night to make ends meet. This brings in an extra $1,200 every month. After 15 hours of daily work, Jennings is ready to flop right onto the bed. He doesn’t want to know about what his wife and children did and applaud their achievements. He doesn’t have the time or energy.
If that gruelling work schedule gave him more than enough to live off, that might still not be a very big concern. However, it doesn’t. Jennings pays $1,000 a monthly for a two-bedroom basement unit in the suburbs. It comes with in-suite laundry, unlimited internet and parking for one car. He spends $800 all inclusive on the car. Cellphones for his wife and himself costs him $100 a month. Groceries and household items trim his wallet by another $800.
In his present condition, Jennings is incapable of putting away any cash for a rainy day. What’s more, he is forced to live paycheck to paycheck. With his meagre pay and no wiggle room for sick or unpaid days, Jennings cannot dream of buying a house. He cannot even think of moving to an above-ground unit.
His student loan is still unpaid. The family has not eaten out or visited the cinemas in decades. They don’t even have enough money to visit the dentist, buy medicines or other necessary items that are not on their list. Unexpected expenses completely derail his family’s life and the after effect is felt for months.
Fight for a minimum living wage of $15
Their favourite stores are thrift shops. The next stop is the Dollar store and then superstores like Walmart. According to the Nutritious Food Basket, a family of four requires $858.81 per monthly to eat healthy food. Andrew’s family is just managing to eat healthy food but that’s not the case with 64 percent of Ontario households. The report states that 58.9 percent of food insecure households have employment.
The “Fight for $15” movement scored a significant victory when Ontario (Canada) announced its plans to increase minimum wages to $15. The province now joins an elite club of states (Alberta, Canada) and cities (New York, San Francisco and Seattle in the USA) that will be on this pay bracket. This, of course, is the least employers are required to pay by law. A minimum wage doesn’t ensure people can lead debt-free lives. Employers must move towards a living wage, which can provide families with the necessities of life, away from poverty’s vicious tentacles. For instance, a household of four (two working adults and two children) in Toronto must earn $18.52 per hour per working person.
Living wage doesn’t enable families to take annual vacations at private islands. It covers basic needs such as rental, food, clothing, child care, transportation, medical expenses, and minimal recreational activities. It doesn’t include the costs of home ownership, debt repayment, or savings.
It enables families to buy nutritious food and live in secure homes. Adults who earn living wages don’t need to work many jobs to make ends meet. They can spend quality time with family and engage in healthy activities. They are less stressed and experience fewer diseases than low-income adults. Children in low-income families are likely to be more aggressive and face more developmental delays than their counterparts from high-income families.
A minimum living wage makes economic sense
As strange as it may sound, poverty is expensive for governments. In 2011, the Canadian government spent $19.9 billion on Employment Insurance. An extra $4 billion was doled out to low-income families. Poverty costs the Canadian healthcare system $7.6 billion! A living wage will enable governments to sport a robust bottom line.
Though it costs more, living wages have far-reaching benefits for employees, employers, and the community at large. Living-wage employers enjoy reduced absenteeism, decreased turnover rates, lower recruitment and training costs, and increased employee morale, productivity and loyalty. There are obvious branding and marketing advantages when you become a living-wage employer — consumers love businesses that work for the community’s benefit. The community benefits as consumers spend more, which gives a stimulus to the local economy.
The policy has been in place since the mid-1990s. More than 140 municipalities (Boston, Detroit, Chicago, Los Angeles and New York City) in the United States, 60 plus Canadian communities (Halifax, Montreal, Toronto, etc.) as well as many cities in the UK have adopted living wages.
Canada’s largest living wage employer is financial co-operative Vancity, which has more than 2,500 employees at 57 branches in Vancouver and Victoria regions, British Columbia. In an article, Tamara Vrooman, president and CEO of Vancity, wrote: “We consider this a direct investment in the health of our employees, suppliers’ employees, and in the communities where we operate. We know the personal, social and economic impact that poverty has on individuals and communities.
“I believe employment should lift you out of poverty and paying a living wage — one that reflects the actual cost of living — is an important and achievable poverty reduction strategy for many employers.”
Disclaimer: Names of people have been changed to disguise their original identity
Nithya Caleb | The Edge Blog