The living wage and our calculation has drawn much-needed attention to the affordability crisis in BC. The cost of living has vastly outpaced increases in wages. In particular, the cost of housing has rapidly increased in recent years, and the changes from year to year are significant. Doing an annual calculation allows for an up-to-date picture of the cost of living across BC. Our calculation provides a way to rethink wages as something that should reflect what families actually get to be able to get by.
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The 2019 living wage follows the same methodology as has been used for the past 11 years. However, new this year are two provincial government investments into child care that offset increases in all other family expenses: the Affordable Child Care Benefit, and the Child Care Fee Reduction Initiative. Many more families are eligible for the Affordable Child Care Benefit, which was introduced in September of 2018, than qualified for the previous child care subsidy it replaced. The benefit is worth over $7,000 per year for the Revelstoke living wage family. The benefit is also paid to child care providers, in addition to parents, which further reduces out-of-pocket expenses for parents. The Fee Reduction Initiative was active for 8 months of the living wage calculation in 2018, whereas in 2019 it applies for the full year and saves families $1200 annually.
Even though costs are increasing steeply for rent and other basic necessities, the cost of living for families with children is lower in 2019 thanks to the provincial government’s new child care policies. Median rent costs for a three-plus bedroom unit in Revelstoke have increased by $159/mo from $1,641 to $1,800, a whopping 9.7%. Utilities, food, clothing and footwear, and owning and operating a vehicle are also now more expensive.
However, the Province’s new child care investments are saving BC families thousands of dollars in out-of-pocket costs of child care – enough to offset all other increases in the cost of living and lower the living wages this year. The new Affordable Child Care Benefit is reducing child care costs for up to 80,000 families across the province, according to government estimates. Meanwhile, the vast majority of licensed child care providers have opted in to the Child Care Fee Reduction Initiative, introduced last year. In Revelstoke, the living wage family saves a further $5,292 on their child care expenses, compared to 2018.
This is a win for BC families with children. However, we know that costs continue to be high for all family types include those without children, single people, and seniors. For these and more family types, the cost of living did not go down this year, and therefore more needs to be done to ensure these groups can also enjoy an attainable cost of living in their communities.
The living wage is also impacted by the reduction of MSP premiums (which was cut by 50 per cent in January 2018 and will be completely eliminated in 2020).
No. Importantly, the Affordable Child Care Benefit is opt-in, meaning families have to apply to receive the benefit. Families who are eligible may not receive the amount they are entitled to if they do not know about this benefit. Families should visit https://www2.gov.bc.ca/gov/content/family-social-supports/caring-for-young-children/child-care-funding/child-care-benefit for more information.
Additionally, the living wage calculation assumes the family is able to access child care. Many communities continue to face a shortage of licensed child care spaces. Wages for Early Childhood Educators also continue to be low, meaning attracting enough ECEs to offer high-quality child care is difficult.
Another important note is that our living wage calculates for a family with a four-year-old and a seven-year-old. Some families will face higher costs than those captured in our calculation, such as those who pay higher child care fees for infants or toddlers, those with teenagers who have higher food costs, and so on. This means families will vary in the extent to which the child care subsidies will offset their expenses.
The Living Wage for Families Campaign calculates the cost of living for a family with two young children because we are focused on child and family poverty. Using the calculation for a family of four also provides a good representation of the possible costs that the majority of types of family units, from families with many children to lone parent families to single person households, might incur throughout their lives. The most common family type across BC is two parents with two children.
While the living wage calculation is based on the needs of two-parent families with young children, it would also support a family throughout life so that young adults are not discouraged from having children and older workers have some extra income as they age. The point of the living wage calculation is to provide a benchmark around what it costs to live in a community, and to raise the discussion about why we have such endemic poverty in Canada and the broad range of supports needed to address it.
In most communities, the living wage is also enough for a single parent with one child to get by. This was the case in Metro Vancouver until the 2012 living wage update but since 2012, the living wage is no longer sufficient for a single parent with one child in Metro Vancouver. This is because the cost of living is rising fast but too many programs intended for low-income families (such as the BC rental assistance program) have income thresholds that are much too low and the subsidy amounts provided have not kept up with the actual expenses that they are meant to defray (such as rent or child care fees). As a result, families are left with large out-of-pocket costs even if they qualify for assistance.
Without the Province’s investments into child care, living wages across the province would have increased considerably this year. In Revelstoke, the 2019 living wage without child care subsidies would have been $21.14 per hour – a shocking 9.1% increase over the 2018 living wage.
This is a call to action for the provincial government to invest more in family expenses other than child care, in order to ensure families without children also benefit from reduced expenses.
The median monthly rent for a three-bedroom unit in Revelstoke rose by $159 in 2019 to $1,800, a whopping 9.7 per cent increase, compared to a 6.5% increase in Metro Vancouver. Shelter continues to be the most expensive item in the living wage budget, and the fastest growing in many communities.
To help curb runaway rental costs, we continue to call for maximum rent increases to be tied to the unit, not to the tenant, to safeguard housing affordability. We also call for the protection of existing affordable housing stock.
Also of note is that vacancy rates across the province continue to be near-prohibitively low. Our living wage calculation assumes the family is able to find a 3-bedroom apartment to rent, but in some communities there are very few options for rentals.
As supporters of the living wage, and acknowledging that the living wage may increase again next year if policy gains are not made in the other expense areas, current Living Wage Employers should continue to pay their 2018 living wage as an act of good faith. However, employers that apply for certification in 2019 will have only to meet the 2019 living wages.
We know our Living Wage Employers support their staff and contractors and want them to be able to have a decent quality of life. The living wage is still a bare bones amount that does not represent a luxurious lifestyle. The living wage includes conservative estimates for all expenses, and does not include costs such as debt payments, savings to buy a home, or an emergency fund. The costs of all family expenses other than child care are still increasing this year. Unless we see further progress on affordability, the living wage will again go up next year.
To learn more about becoming a certified Living Wage Employer, visit: http://www.livingwageforfamilies.ca/employers.
The living wage is the hourly wage that each of two parents with two young children must earn to meet their basic expenses (including rent, child care, food and transportation), once government taxes, credits, deductions and subsidies have been taken into account. The calculation assumes both parents work full time (35 hours per week), and includes a 4-year-old who needs full time child care and a 7-year-old who needs care when not in school. The cost is calculated annually in Working for a Living Wage: Making Paid Work Meet Basic Family Needs in Metro Vancouver, a report published by the Canadian Centre for Policy Alternatives’ BC office, First Call: BC Child and Youth Advocacy Coalition, and the Living Wage for Families Campaign.
The living wage is calculated based on regional costs for housing, transportation, child care, food, and other common family expenses. This means living wages will vary across the province. With a province as diverse as BC, communities differ when it comes to their cost of living. For example, while some communities may have lower housing or child care costs, others may have lower-cost public transit or greater access to goods and services.
No matter where they live, families should be able to afford a decent life. There are jobs that need to be done in every community, and therefore people need homes, services, and a good quality of life in every community.
While the living wage is an optional rate that employers can choose to pay, the minimum wage is the provincially-mandated legal minimum employers must pay their employees.
The current general minimum wage in BC is $12.65 per hour, and it will increase to $13.85 per hour on June 1, 2019. It will reach $15.20 per hour in 2021.
The living wage is an amount calculated to reflect the cost of living in a community, whereas the minimum wage is set arbitrarily by the provincially government and is not pegged to inflation or any metric of affordability. As our calculations show, families cannot afford to get by on the minimum wage.
The minimum wage continues to be several dollars below the living wages for most communities. In Revelstoke, the minimum wage as of June 2019 will still be $5.05 per hour lower than the living wage – a difference of over $20,000 in annual income for the living wage family.
However, the fact that some of this year’s living wages come closer to the general minimum wage points again to the power of good public policy. Our calculations for Prince George, Kamloops, and Cranbrook are in the range of $14 per hour, which is very close to the June 2019 minimum wage of $13.85. This is a win for BC families and shows what can happen when governments make bold public investments to help BC families.
Moreover, the Living Wage for Families Campaign is currently engaging with the government’s Fair Wages Commission, which is holding a public consultation about how to address the discrepancy between the minimum wage and a living wage. For more information on this consultation, which is open until May 31, visit: https://engage.gov.bc.ca/fairwagescommission/.
We’ve known for many years that the minimum wage in BC has been too low. The minimum wage did not increase for ten years before it was raised to $8.00 from $7.60 in 2011. If the minimum wage had kept pace with regular increases and had been tied to the cost of living, the gap between the minimum wage and the living wage would be much smaller than it is now. It would not be feasible for the government to increase the minimum wage overnight, but eventually we would like to see legislated wages that mean people can afford to live in their communities. In a society as wealthy as ours, people should not have to make impossible choices like deciding to pay rent or buy food for their children.
On Monday April 29, the provincial government introduced new amendments to the Employment Standards Act, following extensive public and expert consultation. While not directly tied to wages, these changes would bring greater economic security to workers and their families by protecting workers’ rights to collect the wages they’re entitled to, receive better support from the Employment Standards Branch and access job-protected leave. This is a further example of the ways that good public policy can have tangible and important impacts for families.