COLUMN: Poverty reduction and the Living Wage

Edmonton’s poverty reduction task force defined poverty as when people lack, or are denied, economic, social, and cultural resources.

The so-called Living Wage for our regional district has been figured to be a little under $20 per hour

Edmonton’s poverty reduction task force defined poverty as when people lack, or are denied, economic, social, and cultural resources to have a quality of life that sustains and facilitates full and meaningful participation in the community. It’s all about deprivation and isolation.

There are key vulnerabilities that make people much more likely to slip into poverty. These include:

Personal vulnerabilities like language ability, literacy, generational trauma, skills, and disability.

Disruptive events like job loss, injury, illness, violence, recession, or a death in family.

Life stages: child, youth, adult, parent, senior (some life stages entail inherent vulnerabilities, but we are also vulnerable moving from one life stage to another).

Systemic barriers like access, discrimination, racism, low wages, and bureaucracy around credentials.

(It’s interesting to note how many of these key vulnerabilities a new immigrant may be expected to have.)

These things were discussed last week in Revelstoke at an Economics of Poverty Reduction conference I attended with others from Nelson, including folks from the Nelson at its Best initiative. Statistics on poverty include that the number of people working for minimum wage has doubled since the year 2000; 42 per cent of poor people have a university education; and, according to the Payroll Association of Canada, 46 per cent of us are living paycheque to paycheque.

BC now has the lowest minimum wage in Canada, and the highest child poverty rate in Canada. One in five children in BC lives in poverty. Here in Nelson, 30 per cent of all earners make less than $25,000 a year, based on 2012 tax returns. That means they earn less than $15 per hour.

So, what on earth is going on? One thing that seems clear is that whatever we’ve been doing over the last couple of decades to address poverty isn’t working very well. The consensus at this conference from economists, bank managers, directors, and social service co-ordinators is that poverty is a function of the system we’ve built, that it’s caused by bad policy, and that things like the Living Wage movement are, at their core, a market response to bad public policy.

What’s the Living Wage, you ask? It is the minimum amount you need to earn to live a simple, but decent, healthy life in your community. It covers food, shelter, clothing, transportation, MSP, and a few sundries. It does not include paying off debt, or saving for the future. It basically covers today’s costs, today.

In our regional district, the Living Wage has been calculated at $18.42 per hour, presuming full-time employment. That works out to about $36,840 per year, gross income. It’s worth noting that Canadian cities don’t have the authority to set their own minimum wages; only the provinces can do that.

When I first heard about the Living Wage, it actually made me nervous. As someone who works on Baker St., I can tell you it’s not unusual for business owners in Nelson to make only $25,000 to $35,000 a year themselves. Their margins are tight. I worried that the literature portraying the Living Wage was based only on large, diverse urban economies, and not rural ones.

I felt a bit vindicated when a team of researchers from UBC broke down the impact of the Living Wage on employers by sector. As I thought, the retail, accommodation, and food and beverage sectors are the ones most likely to be financially impacted by adopting a living wage. With more than 60 coffee shops and restaurants in Nelson, and a main street full of small independent businesses, that’s nothing to ignore.

Still, many companies and institutions are well positioned to be early adopters of the Living Wage: financial institutions, unionized workplaces, providers of premium and luxury goods and services, and municipalities themselves, for example.

Knowing your community’s Living Wage is a good exercise. It’s more than $20 per hour in Vancouver double the minimum wage. Are we really saying that it’s okay to work 40 hours a week and still not be able to afford the basic necessities of life? Do we expect people working for minimum wage to have two jobs? What does that say about how they get to live the rest of their life? People working two jobs have little time for kids, civic engagement, church, health and recreation they get to participate very differently in society.

The Living Wage in Vancouver went down recently as a direct result of the federal government increasing the child tax benefit. The Living Wage is exquisitely responsive to policy changes like this. There are other ways the cost of living in BC could be lowered maybe getting rid of MSP premiums? (We’re the only province that still has this head tax.) Meanwhile, businesses and organizations that are up for it may want to start voluntarily phasing in wage increases. Lowering the cost of living and paying higher wages are just two tools in the poverty reduction toolkit.

To me the question is: how do we want things to be for one another in our community? Not just for me, or the business sector, or the social sector, but for all of us

Some of the best community development initiatives come from smaller communities. All hands on deck!

Nelson city councillor Anna Purcell shares this space weekly with her council colleagues.

 

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