Here’s an interesting article for you, for some reason this has been on my mind.
MINIMUM AND LIVING WAGE CAMPAIGNS IN CANADA
Sep 28, 2007
Cora Mojica gave up working three jobs after she became sick and nearly died. “That was in 2005,” she says. “I was working evenings in the housekeeping department for Aramark at St. Paul’s hospital and, in the morning, I worked for Sodexho as a dietary aide at Vancouver General Hospital.” On evenings she didn’t work for Aramark, Mojica worked for a retail business. “It was very tiring and hectic,” she says.
Prior to 2002, the wages for the unionized hospital workers like Mojica were in the range of $18 to $19 an hour, with benefits. Then the B.C. Liberal government took away the collective bargaining rights of Hospital Employees’ Union members in the housekeeping and food services departments. Their work was contracted out to giant multinational companies such as Sodexho, Aramark and Compass, and the new, non-union wages were drastically lower.
LOW WAGES AND FEW HOURS
When Mojica was hired by Sodexho in June 2004, she was paid a wage of $10.15 an hour and received only 16 to 20 hours of work a week. A low wage and few hours are a clear illustration of why so many employed people are found among a community’s poor.
Today, with her one remaining job as a dietary aid at VGH, Mojica earns $12.05 an hour and works 37.5 hours a week. While this is considerably more than the provincial minimum wage of $8 an hour, it is still not a living wage. Mojica says she occasionally does housecleaning for people or babysits to earn some extra income. Still, she wishes she didn’t have to live paycheque to paycheque and struggle to get by.
The Canadian Centre for Policy Alternatives is embarking on a research project to determine what constitutes a living wage for B.C. and Metro Vancouver area. It is likely safe to say that it is more than $12.05 an hour. British Columbia is an expensive place to live. A 2006 report from Human Resources and Social Development Canada found Greater Vancouver had the highest percentage of working poor in the country – more than 10 per cent – which is double the national average.
PAYCHEQUE TO PAYCHEQUE
In Victoria, the province’s capital, data from various sources, including Statistics Canada and a 2004 Capital Regional District survey on household spending, shows that a household of two adults with two children working a combined total of 60 hours a week at $14.88 an hour – with no car, no savings and no student loans to pay off – would have $6.27 left at the end of the month after paying rent, childcare, utilities, and other related living expenses.
Jane Worton, a researcher with the Community Social Planning Council of Greater Victoria, says, simply, “A lot of people can’t afford to live here.” This has caused a high migration rate of 25 to 30 year olds from the area, a contributing factor in the current labour shortage in the area (besides the demographics of an aging population).
More than 18,000 people in the Victoria area are considered “waged poor,” meaning they work for pay at least part of the year. Of these, over 4,000 work full time year-round. Their low-wage jobs keep them in poverty instead of lifting them out. Victoria’s Community Social Planning Council has determined that a living wage for that city is $14.88 an hour.
Indeed, it is a myth that the poor don’t work. According to a 2006 HRSDC report, in 2001, 653,000 Canadians were considered to be working poor. When their families are factored in, this represents 1.5 million people who are affected, one-third of whom are children. HRSDC distinguishes between a low-wage worker and the working poor. Someone may be working for low wages but, when the total family income is factored in, 88 per cent are not considered as poor. The working poor, on the other hand, could include someone working for a decent wage, but it is not enough to provide for their family.
One in every four jobs in Canada pays less than $10 per hour and two out of every five jobs are precarious to some degree, whether they are part-time, temporary, contract work or involve self-employment.
A RISING LOW-WAGE ECONOMY
Dennis Howlett, former director of the National Anti-Poverty Organization and now coordinator of Make Poverty History, writes in “The Call for a Living Wage: Cross Canada Campaigns” that low minimum wages are “legacies of free trade and anti-inflation economic policies of the 1980s and ’90s.” The federal minimum wage was eliminated in 1996 and some provincial governments have not increased their minimum wage for years, despite rising costs and inflation. The result is the rising low-wage economy we see today, with the ongoing dramatic decrease in manufacturing jobs and the growth of service-sector work.
Millions of Canadians receive at least some earned income during the year. Many work year round, full time, and are still unable to lift themselves out of poverty. Whether due to low wages or simply not enough hours, their work experience flies in the face of traditional beliefs that a job should keep a person from being poor. The issue of living wages is a critical equity issue because it determines the level at which people are able to engage and participate in society.
HEU member Palmi Orsi works as a cleaner at the Nanaimo hospital, in Nanaimo, B.C. This past April she spoke at an HEU-sponsored conference called “All Workers Deserve a Fair Day’s Pay.” Orsi told the audience of union and community activists that the impact of being paid low wages on several of her co-workers was heartbreaking.”It’s hard to watch them eat off returned food trays or take home expired food products,” she said. “They can’t heat their homes. They line up at food banks.” According to Campaign 2000, a national organization to combat child poverty, 13 per cent of people using food banks are employed.
At $10 to $12 an hour, many workers like Mojica had to take second and even third jobs to earn enough money to support themselves and families. When these same jobs paid close to $20 an hour, it was a much different story.
The B.C. Federation of Labour is one of several organizations across Canada that is campaigning for a $10-an-hour provincial minimum wage. Some have a “$10 by 2010” objective but, in B.C., where the minimum wage of $8 has not been increased since 2001, the BCFL and its affiliates want the B.C. Liberal government to not only raise the minimum wage but to scrap its $6-an-hour training wage.
CANADA A COMPARITIVELY LOW-WAGE COUNTRY
Compared with other industrialized nations, Canadian employers have a poor record when it comes to paying their workers. A 2004 report by Campaign 2000 called “Low Wages Condemn Families to Poverty” says, “Canada stands out as a low-wage country, second only to the U.S. among industrialized countries.” Statistics reveal many workers earn less than two-thirds of the median hourly wage and 25.3 per cent of Canadian workers are considered low paid versus five per cent of Scandinavian workers.
Most advocates for increasing the minimum wage make no pretense of it being a living wage. As Public Interest Alberta states on its website: “Unlike a minimum wage, which sets an arbitrary limit beneath which hourly wages cannot fall, the living wage starts by asking what wage level is sufficient to allow workers to support their families and enable them to enjoy a safe and healthy life.”
“The minimum wage has become a poverty wage instead of an anti-poverty wage,” says Rev. Dr. James A. Forbes Jr., a member of the American “Let Justice Roll” coalition of 90 faith, community, labour and business organizations that work together in the U.S. to address poverty by raising state minimum wages around the country. He says, “A job should keep you out of poverty, not keep you in it.”
In the U.S., the first living wage campaign was launched unofficially in 1995 when workers in Baltimore’s homeless shelters and soup kitchens discovered that many of the people coming to them for assistance were employed. This started community efforts to force the city council to at least raise the wages paid out through contract work. Today, the city’s minimum wage stands at $5.85 per hour and its living wage is $9.62 an hour.
LET JUSTICE ROLL
Katy Heins, campaign director for Let Justice Roll, explains that the initial focus of the coalition was a demand that all taxpayer-funded work should pay a living wage. “It was expanded to include demands that all businesses should pay a living wage.”
Today, because of the efforts of organizations such as Let Justice Roll and ACORN (Association for Community Organizations for Reform Now), over 130 American cities and a number of states have passed ordinances to ensure that any company that receives work through government-tendered contracts must pay an agreed-upon living wage to its employees.
Some people still believe the stereotypical minimum wage earner is a teenager or college student living with their parents. While it is true that many young workers are found in minimum wage jobs, most of these workers have high school degrees or more. A majority of minimum wage earners are women, many employed in retail chain stores. But minimum wage earners are also found among non-union farm workers, fast food employees, janitors, housekeepers and child care workers. They are security guards, health care aides and hotel room attendants.
In their report “A Just Minimum Wage: Good for Workers, Business and Our Future,” Holly Sklar and Rev. Dr. Paul H. Sherry, of the Let Justice Roll campaign in the U.S., say wages reflect personal values and a nation’s values, reflecting “whether we believe workers are just another cost of business – like rent, electricity or raw materials – or human beings with inherent dignity, human rights, and basic needs such as food, shelter, and health care.”
The National Anti-Poverty Organization wants the federal government to reinstate a federal minimum wage, starting at $10 and indexed to inflation. It’s calling for the provinces and territories to raise their minimum wages so that someone working full time can escape poverty. It would also like municipalities and universities to adopt living wage policies where procurement and service contractors must pay their workers a living wage in order to qualify for contracts.
HIGHER WAGES AND MORE HOURS
Higher wages and more hours improve workforce stability. They give workers a greater sense of recognition for their contribution and create increased job commitment. For employers, there is reduced staff turnover and increased productivity.
“With the freedom to buy a few extra groceries or maybe a new book, earning a living wage would mean an enhanced life,” says Lindsay Postill, an activist with the Calgary Low Income Coalition. “The best thing about a living wage is that it signifies value. As a worker, my time and energy is valued. As a contributing member of society, I am valued.”
Manitoba’s Just Income Coalition is composed of organizations representing labour, human services, faith, women, and aboriginal people. It was formed in 2002 in response to the increased privatization within the provinces’s public sector and the low-paid jobs that ensued. Coalition activist Derek Black says, “Tax dollars should not be spent creating substandard wage jobs for workers.”
The connection to tax dollars spending is one aspect that differentiates the minimum wage campaign from the coalition’s living wage demands. Black says they are working to have the City of Winnipeg and the province of Manitoba adopt measures similar to the municipal ordinances followed in the U.S. Explains Black: “Say the city gave a construction company large amounts of money to build a new arena. In the U.S., some ordinances would require all the contractors involved in building the arena to pay a living wage, and all the cleaners for the arena once it was built to be paid a living wage and, if there’s a doughnut shop in the arena, they’d have to be paid a living wage, also.”
In Manitoba, 46.2 per cent of minimum wage earners are adults over 20, the majority of whom are women. The Manitoba Federation of Labour reports that 20 per cent of minimum wage earners in the province are the head of households, some of whom are single parents with children under 18 years of age.
Like the other provincial coalitions, Newfoundland and Labrador’s Make Work Pay Coalition is dedicated to im-proving the living standards of the province’s lowest paid and most vulnerable workers. Composed of community, union, student and women’s organizations, social justice groups and anti-poverty activists, its members believe no person working full time should be earning below the poverty line.
RAISING MINIMUM WAGES AN IMPORTANT STEP
Raising the minimum wage was chosen as an important step towards achieving a living wage for the working poor and a public campaign was launched around this issue. Through its members’ efforts, the coalition was able to get the provincial government to raise the minimum wage from $7 to $8 by April 2008, in 50 cent increments.
“Our goal is $10 by 2010 because to go and demand an increase from $7 to $10 would shut the door,” says Newfoundland and Labrador Federation of Labour vice-president Lana Payne. “This is not to say the government shouldn’t move quicker. But we had to present something seen as reasonable.” Payne says even this increase brought sharp criticisms from people who said it would be “the ruination of the economy.” But evidence shows the opposite is true. Local economies benefit from the increased purchasing power, according to Dan Gar-dener, commissioner of Oregon’s Bureau of Labor and Industry. “Most low wage earners pump every dollar of their paycheques directly into the local economy by spending their money in their neighbourhood stores, local pharmacies, and corner markets.”
In Victoria, B.C., the Quality of Life Challenge took a different approach. A large percentage of the Victoria-area workforce are government workers who belong to unions and receive a good wage. The city also has a large tourism sector and many jobs, traditionally low-waged, are connected to this. The Challenge, overseen by Victoria’s Community Social Planning Council, decided to focus on small, local businesses and work to encourage their voluntary participation in raising wages. They do this through education and raising the owners’ awareness of the high costs facing their employees.
EMPLOYEES HAVE TO GO TO FOOD BANKS
“So many small business owners have a relationship with their employees: they refer to employees almost as family and want to make sure they can make ends meet,” says Jane Worton, research director for the community council. “A lot would be shocked to know their employees have to go to food banks.”
When it was determined that a living wage for Victoria was $14.88 an hour, it was amazing to some, and the story was featured on the front page of the daily Times Colonist. Worton says, “A lot of small micro businesses have a low profit margin and can’t pay $14.88, so we’d say to them, ‘What can you do to offset your employee’s expenses?'” Suggestions ranged from helping to pay for health care coverage to providing transit passes. Profit-sharing was another option.
Several businesses that were not involved in the project raised their wages based on the newspaper story. One of the region’s biggest private employers, the West Corporation, sent a copy of the article to its American head office and successfully won a $2-an-hour increase in wages for its call centre workers – boosting the starting wage from $8 to $10 and regular wages to $12. Something tangible and documented seemed an important catalyst for companies that wanted to be good employers.
“A well-run business can cope with the moral limits set on markets,” say Sklar and Sherry of Let Justice Roll in their report “A Just Living Wage.” “Effective entrepreneurs have coped without slavery, child labour and the beating of workers. If they are competent, they can cope without below-poverty-level wages.” OT
A LIVING WAGE MEANS
The following comments are from workers who attended the Hospital Employees’ Union conference called “All Workers Deserve a Fair Day’s Pay.”
A living wage means:
* I wouldn’t have to work two jobs just to make ends meet.
* I would have time to volunteer with my church.
* I would be able to take my girlfriend out on a date.
* I would be able to see my children.
* I would be able to afford to start a family.
* I would be able to get to the end of the month without using my credit card.
* I would be able to afford to send my kids on a field trip.
* I would be able to buy enough food for my family.
THE POVERTY LINE
Although Canada does not have an official poverty line, the most commonly used measure to assess poverty is Statistics Canada’s Low Income Cut Offs, or LICO. This is calculated on the after-tax income level where a family is spending 20 per cent more than the average on food, clothing, and shelter. If the average family spends 43 per cent of its income on these necessities, a family spending more than 63 per cent of its after-tax income is considered poor.
This figure is adjusted annually and is based on the size of community and the size of the household. The 2005 LICO ranged from $11, 265 for a single person living in a rural area to $45,155 for a seven-person family in a large urban area. For a family with three children in Victoria’s Capital Regional District, the cut-off was $31,351. A living wage is the amount of money required by a family or single individual to stay above the LICO. Victoria’s Community Social Planning Council has determined that a living wage for that city is $14.88 an hour.
Employment is no longer a guarantee against poverty. With minimum wages going unchanged for years and not even keeping up with inflation, the buying power of minimum wage earners continues to fall behind.
In a February 2007 editorial called “Make Minimum Wage a Living Wage in Nova Scotia,” John Jacobs, director of the Canadian Centre for Policy Alternative’s Nova Scotia office, says the minimum wage is “a benchmark wage” and puts upward pressure on other wages, especially low wages. “If it remains low, these wages will stagnate.”
In Nova Scotia, the minimum wage recently went from $7.15 to $7.60 per hour, an increase of six per cent. However, to actually live above the poverty level, the wages would need to be in the $9 range, says Jacobs. “In the end, if a business can’t afford to pay its employees a living wage, it shouldn’t be in business. Paying anything less is exploitation.”
A single worker working for $8 an hour, 40 hours a week, earns $15,613 after deductions, which is below the national LICO. Increasing the rate to $10 would give this worker a net income of $17,494 , an income just over the poverty line. Increasing the minimum wage to $11 an hour ensures that a worker remains above the poverty line – depending on where they live. Metro Vancouver is a notoriously expensive place to live, as is Victoria. For Calgary, a living wage is calculated at $12.25 and in Winnipeg, it is $10.85.
The problem with minimum wages is they are arbitrarily set and don’t reflect a living wage, nor do they adjust for inflation. They set a floor for wages – and any increase would benefit the two million Canadian adults who earn less than $10 an hour. It is generally not enough, however, to provide a decent standard of living – and people are still forced to turn to social assistance of some kind. – C. P.
Carole Pearson is a Victoria-based freelance writer who specializes in labour, human rights and the environment.
The Hospital Employees’ Union is the health care services division of the Canadian Union of Public Employees.
There are many more coalitions, labour councils, and unions than mentioned in this article that are active in similar campaigns across Canada, including the Toronto and York Region Labour Council (see www.amillionreasons.ca), and the Canadian Labour Congress (visit www.canadianlabour.ca, click on “campaigns,” and go to “$10/hr federal minimum wage.”) If you would like Our Times to highlight your story about the fight to raise minimum wages and for living wages, send a letter to the editor: email@example.com
“Living wages” are what is needed for people to really make a go at it in this tough world.