Minimum Wage is Not a Living Wage
April is both a good and bad time of year. It signals the end of another semester, which means papers, projects, and exams are on the horizon. April is also job hunting season for most students, whether you’re graduating and looking to bust out into industry, or just looking for a solid gig for the summer. Many of these entry-level career positions and summer-stint gigs offer great experience and new opportunities for students. They also don’t often pay all that much. Employers, especially those who employ part time, seasonal, or “low-skilled” workers often aren’t willing to go much above minimum wage.
When minimum wage policies were first introduced, the intention of these wages was that they were the lowest possible wage a worker could get that would still cover the monthly living expenses for themselves and their families, and to protect vulnerable workers from exploitation. These days, minimum wage rarely covers even one person, nevermind someone and their dependents, and their expenses. British Columbia’s minimum wage is currently $15.65, with no announced increase for 2023.
The issue with minimum wage is that it no longer supports its earners and it no longer protects workers from being exploited because of that. To live in a financially sustainable way, people need to make a living wage. Living wage reflects what people need to earn to cover the actual costs of living in their community, and draws on community-specific data to determine the expenses. The goal of a living wage is to allow a worker to afford a basic but decent standard of living through employment without government subsidies. For a worker earning minimum wage, they would have to work an extra 10 hours a week to be able to make ends meet. If they made a living wage, a standard 40 hour work week would meet their needs. Living wage rates are always higher than minimum wage in Canada. Which likely is leading you to the question, what is the living wage in the Okanagan? It’s $22.88/hour. That’s a $7.23 difference between minimum wage and the valley’s living wage.
Many employers state that they cannot afford to pay their staff a living wage, but research shows that 97% of Living Wage Employers in BC have reported a benefit from joining the program. They have found that paying a Living Wage reduces staff turnover, recruitment and training costs and has increased morale, productivity and brand awareness. Less turnover and more productivity and brand recognition increase earnings for many businesses.
Living wage is meant to bring people above the poverty line. When people live below the poverty line it means that everyone is paying. In fact, poverty costs British Columbians $1.2 to $3.8 billion a year in increased health costs, according to the Canadian Centre for Policy Alternatives and BC Healthy Living Alliance.
So when you’re job hunting this summer, check out this list of living wage employers in BC. And if you’re looking to hire students and graduates, consider compensating your employees at a living wage rate, and becoming a registered Living Wage Employer. People with more disposable income spend that extra income in their local economies. It’s a win-win for everyone!