As businesses continue to struggle with the labour shortage, providing a Living Wage could be one action employers can take to attract and retain employees. But what is a “Living Wage”? It’s the calculated hourly amount a family needs to cover basic living expenses to live above the poverty line. The Living Wage calculation in Canada is based on a two-parent family, with two children, each parent working full-time; the calculation refers to the theoretical income that allows families to afford adequate shelter, food, child care, medical expenses and other necessities[i]. The Living Wage varies by region, as the cost of living depends on regional differences in housing, transportation costs, and food, among others. Regardless of the variation, the Living Wage is typically higher than the minimum wage set by governments. While a Living Wage may seem high to some, in fact the Living Wage still does not cover additional expenses such as saving for home ownership, debt repayment, university education, retirement, or caring for a seriously ailing family member[ii].
Figure 1 Living Wages Across British Columbia, calculated for 2021 year *Cowichan regional Living Wage calculated based one use of two vehicles, instead of one vehicle and one monthly transit pass
In British Columbia, businesses can become certified as Living Wage employers. The Living Wage for Families Campaign is the official Provincial certifier for employers across the Province, and works with regions to calculate the Living Wage. In the Cowichan region, the Living Wage was calculated by Social Planning Cowichan to be $19.13 per hour[iii]. This is a conservative estimate, predicated on affordable options – but is still much higher than the Province-wide minimum wage of $15.20 per hour. While typically the Provincial standard for a Living Wage estimates the cost for transit with one vehicle and one monthly public transit pass, understanding that public transportation is limited in the region, the Cowichan Living Wage is based on the need for two vehicles per household. While different than other calculations for more urban areas, the estimate for Cowichan was formally accepted as the official wage for certification processes by Living Wage for Families Campaign BC.
The business case for providing a Living Wage
“The business case is well documented”, says Natasha Pei of Living Wage Canada, “there are two main points: lower turnover and increased productivity. For employers, it shows a willingness to value and invest in employees, which in turn allows staff to be more productive, not having to stress about meeting their basic needs like paying bills on time, finding adequate housing, and eating nutritious food. These employees then become more committed, and results in less absenteeism or outright quitting”. As employee recruitment and training can be time and resource intensive, a loyal and committed workforce results in overall cost savings for an employer[iv].
In the broader community, paying a Living Wage shows the public that a business is committed to being an ethical employer. As consumers continue to demand corporate responsibility from those they purchase goods and services from, businesses paying a Living Wage may become more attractive to consumers; resulting in an overall positive public image and reputation in the community. Further beyond the single employer, a Living Wage can benefit the broader community by stimulating consumer spending, and increasing overall economic activity.
Going from the Minimum to a Living Wage
There’s widespread agreement that providing a Living Wage is something to aspire to, but it can be difficult to make the leap from paying a minimum to livable wage. “There’s always an upfront cost”, says Natasha Pei,” but the investment is worth it, because in the long run you see the savings in productivity and lower absenteeism”. Anastasia French of Living Wage for Families BC adds “A Living Wage is the basic starting point that an employer should be paying to ensure their employees can make ends meet.”
In British Columbia, the Living Wage for Families Campaign provides a phased approach to becoming a certified Living Wage employer, so businesses don’t have to do the jump all at once.[v] A living wage can also be made up of wages and benefits, so any that an employer offers (such as additional paid leave or a health and dental program) can lower their living wage requirements. “Living Wage employers have found huge benefits to joining the program,” says Anastasia French, “as well as the impact on their staff, they’ve also found that it has helped promotion and public recognition of their business”. A recent survey found that 97% of participating certified Living Wage Employers in BC found it advantageous, with publicity and positive public image being the top cited benefit[vi]. The campaign works with employers and provides online and print promotional materials including decals and plaques, as well as listing Living Wage Employers on their website.
For more information on becoming certified, visit LivingWageforFamilies.ca
[i] “What is a Living Wage?”, Living Wage for Families Campaign, https://www.livingwageforfamilies.ca/what_is_living_wage
[ii] “Canadian Living Wage Framework: A National Methodology for Calculating the Living Wage in Your Community”, Living Wage Canada, http://www.livingwagecanada.ca/files/3913/8382/4524/Living_Wage_Full_Document_Nov.pdf
[iii] “Living Wage Cowichan”, Social Planning Cowichan, December 2021, https://837ca6f7-25f5-4710-a0b7-534316823682.filesusr.com/ugd/20b695_8697eea6467d4305a0fd8129cbe36d7a.pdf
[iv] “The Business Case for Paying a Living Wage”, Living Wage Canada, http://livingwagecanada.ca/files/7213/8269/9483/Living_Wage_doc…pdf
[v] Becoming a Living Wage Employer, Living Wage for Families Campaign, https://www.livingwageforfamilies.ca/become_a_living_wage_employer
[vi] Living Wage Employer Survey Results [Report in Preparation], Living Wage for Families Campaign
