Metro Vancouver’s living wage has seen a major decrease for the first time in the 11-year history of its calculation.
This might sound like a bad thing, but it’s not.
A lower living wage means that families in B.C. have lower costs of living. This in turn means they don’t have to earn as much annually to cover their household expenses.
The 2019 living wage is $19.50 per hour, a nearly seven per cent decrease from last year’s wage of $20.91.
According to the 2019 report released today from the Living Wage for Families Campaign, this year’s decrease was a direct result of the B.C. government’s new investments into child care.
‘Significant gap’ persists
The province’s new Child Care Fee Reduction Initiative and Affordable Child Care Benefit mean that the costs of child care are lower for B.C. families.
Although the costs of living in Metro Vancouver are still relatively high, and constantly increasing, the decrease in child care costs offsets other living expenses.
Without new provincial investments into child care, this year’s living wage would be three dollars higher than it is right now. “The living wage wouldn’t be $19.50 now, it would be $22.47. The living wage would be going up very fast,” said Iglika Ivanova, a senior economist and public interest researcher with the Canadian Centre for Policy Alternatives in B.C. who co-authored the report, “Working for a Living Wage: Making Paid Work Meet Basic Family Needs in Metro Vancouver.”
Ivanova and Halena Seiferling, the organizer for the Living Wage for Families Campaign, note that although the gap between minimum wage and living wage is decreasing in some smaller communities across B.C., the updated living wage for Metro Vancouver is still significantly higher than the provincial minimum wage.
“The living wage in Metro Vancouver is still $5.65 more per hour than the minimum wage, even when it goes up in June. Over the course of a year that would be more than $20,000 in annual income for a family that they would miss if they’re only making the minimum versus the living wage. It’s a significant gap,” said Seiferling.
What is a living wage, anyway?
The Living Wage for Families Campaign calculates a single living wage based on a family that has two parents and two children, aged four and seven. According to Seiferling, they chose this model because this is the most common type of family in B.C., and because it is able to capture a wide range of different costs that families might encounter. It can capture future costs for young adults who may have children later on, and seniors who may want more financial support later in life.
Seiferling acknowledges, however, that some households who have children of different ages may still have other costs not accounted for in this model, and that other families may face challenges if they are already more vulnerable in work situations as a result of race, gender or immigration status.
The living wage is meant to ensure that the family is able to “pay for necessities, support the healthy development of their children, escape severe financial stress and participate in the social, civic and cultural lives of their communities.” This does not include costs such as saving for the future higher education of their children, or setting money aside for retirement or home ownership.
“The end goal that we’re working toward is ending working poverty, making sure that if you work, you shouldn’t live in poverty in your community, you should be able to have a decent standard of living and a good quality of life,” said Seiferling. “There is a role for everyone to play in that.”
Government can help dramatically, as this year’s calculations show, through policy changes and social spending which produce a myriad of long-term social and economic benefits. Employers do their part by choosing to pay their employees a living wage although it isn’t mandatory, said Seiferling.
Considering what this year’s decrease in the living wage means for families in B.C., Seiferling is cautiously optimistic.
“It's a really exciting win for families and children, but it also points to how costs are still increasing, particularly in the areas of housing and transportation and food,” she said. “We hope that more action will come in the other areas as well, such that families can continue to benefit even while the cost of living is continuing to increase each year.”