$15 wage not enough: Report
As far as minimum wage goes, even $15 an hour just won’t be enough — and that isn’t just the opinion of some millennials.
The minimum should be about $17.56, according to the 2017 Living Wage Calculation recently released by Niagara Poverty Reduction Network.
The report conservatively estimated that hourly wage — a living wage — is necessary for families in the region to bring in an annual $71,000 household income.
According to the network, the estimate was made from a list of necessary expenses for a family of four — two adults, both aged 35 and working 37.5 hours per week each, plus a three-year-old child and a seven-year-old child.
Statistics Canada’s 2012 report stated the average household income for Niagara then was $68,410.
“The cost of living continues to rise across Niagara region and many families working at low-wage jobs are struggling to make ends meet,” says Glen Walker, chairman of the poverty reduction network.
He says problems associated with an ever-increasing cost of living have a direct effect on Niagara, with many young people and families being driven out of the region.
“Providing wages that allow families to meet their basic needs is an important tool in addressing cost of living challenges in Niagara,” says Walker.
He says businesses providing a living wage would help keep employees in the region as well as benefitting employers.
Walker says when employees and families make a living wage, there is less employee turnover, families can afford to stay in their communities, and less young people leave, bringing up business in the whole region.
“A living wage is not the same as the minimum wage, as it reflects what earners in a family need to be paid based on the actual costs of living.
Providing living wage should be at the top of mind of all employers, he says.
“However, the reality is that many Niagara region businesses are struggling themselves to stay afloat, so other solutions must also be considered to help make life more affordable, such as improved public transit and access to more affordable child care.”
Hugo Chess hire, policy and government relations manager for Greater Niagara Chamber of Commerce, says whether an employer can afford to pay a living wage or not depends on the business and industry.
He says some businesses can afford it and some are already paying the living wage or higher, but for others it’s not realistic.
“If you look at farms in Niagara, you’ll find that many of them can’t afford to pay those kinds of wages,” he says.
“The margins are razor thin or nonexistent in most cases and farms cannot raise their prices and pass them on to consumers because their prices are set.”
Chesshire says there was insufficient research that went into the Ontario government’s decision to hike the minimum wage to $15 by 2019. He says the chamber’ s main concern with the increase is there wasn’t consideration given to whether businesses in sectors such as farming can actually afford it.
Chesshire says the Ontario government also isn’t offering any compensation to help businesses deal with the financial burden.
“In Alberta the government there put out a higher minimum wage, but they also put out a whole package of investment funds and programs to help businesses.”
He says something similar to that would help offset the financial burden.
“And this is coming on the heels of capping trade, skyrocketing hydro prices, increased pension contributions and also increased costs to businesses.”
Walker says research has shown in other countries and other places where the minimum wage has been raised, it hasn’t affected business.
“There’s conflicting statements going around that, ‘Well, it’s going to hurt business,’ but the actual facts seem to point out, across the globe, that no, it hasn’t really made an impact.”
Niagara Poverty Reduction Network recently launched a provincewide program called the Living Wage Employer Certification Program. The program gives employers an opportunity to become recognized for paying their employees the living wage calculated for their local community.
Pre-Line Processing, a metal-parts processing facility and custom fabricator with five employees based in Lincoln, was the first certified living wage employer in Niagara.
Damin Starr, co-owner of Pre-Line Processing, says he doesn’t think anybody should be “working poor.”
“As entrepreneurs, we know our business ventures need to do more than meet minimum standards,” says Starr.
“By voluntarily committing to the living-wage model and encouraging our peers by example, we set the stage for a more desirable economic environment where everyone can benefit.”
Starr says since his company joined the program it has seen positive impacts in focus, workplace morale, overall productivity and a reduction in employee turnover.
“We’re really hoping more employers come forward and say this (being living wage certified) makes sense for our organization.”
He says for small business, paying a living wage is going to be a burden.
“There’s no two ways about it, but at the same time, what’s the benefit to the people working for them?”
Niagara Poverty Reduction Network released two reports, Calculating the Cost of Living in Niagara Region 2017 and Calculating the Living Wage for Niagara Region 2017, which outline the full evidence and methodology used to reach these estimates. The reports are available at wipeoutpoverty.ca.
Niagara employers who want to become living wage certified can contact the Ontario Living Wage Network to learn more about the process at ontariolivingwage.ca.