Minimum wage – is the cost of living a burden low income workers or employers should shoulder?

British Columbia’s annual minimum wage increase went into effect last week with a 60 cent increase to $15.20/hour. Despite this increase, the minimum wage still falls almost $5 short of Victoria’s living wage for families. The 2019 living wage for the City of Victoria is $19.39/hour for families and even higher for individuals meaning the new minimum wage still leaves a large number of families and individuals living below the poverty line.

Increasing the minimum wage always creates tension at both ends of the spectrum– with people worrying about the clear fact that the minimum wage is still not sufficient while others worry about the price paid by local small businesses. There are win-win solutions.

The minimum wage places the burden of cost of living challenges on either individuals who are living in poverty or businesses. The government can spread that burden across taxpayers more fairly by addressing drivers of the costs of living. The recent changes to child care costs is a great example of this – the living wage went down for families when the government invested in affordable childcare.

A major driver of the high cost of living and high poverty rates within Greater Victoria, is housing. According to the 2016 census, 16,720 people within the City of Victoria are spending more than 30% of their income on housing and one in five are spending more than 50%. There is a dire need for an increase in affordable housing and this could significantly help close the gap between the minimum wage and living wage. The development of direct purpose built public or non-profit owned and operated housing is crucial.

In the shorter term, there are concerns by businesses hard hit by the pandemic now facing increases in wages. However, minimum wage workers are disproportionately concentrated in larger corporations that weathered the pandemic well and are profitable. These larger profitable businesses, such as multinational firms should, and are able to, pay the higher minimum wage. It is in the interests of our local economy to capture the profits being made locally by large multinationals through higher minimum wages that will be spent locally on goods and services.

Concern regarding the wage increase and its effect on small businesses is increasingly relevant in the current economic climate of COVID-19. For those small independent local businesses, wage subsidies and other supports will be crucial throughout the COVID-19 recovery period. Further, strengthening our social programs such as employment insurance would help to protect any workers negatively impacted.

One thing to remember is that with increased wages comes a stimulated economy- as people have more to spend, there is more spent in local businesses. This is particularly the case for lower income workers who have the highest likelihood of spending their money locally on goods and services instead of a condo in Hawaii. This is why studies are showing that minimum wage increases can have an overall positive impact on the local economy. These same studies are showing that there is room to move to higher minimums, even potentially setting a floor at 80% of average salaries.

The path to a living wage is twofold – Firstly, it requires public solutions to address the high cost of living, particularly housing and secondly, it requires making the minimum wage a living wage. Not only is this doable, but frankly, we can’t afford not to.

  1. Living Wage for Families Campaign. (2019). 2019 Living Wages Released: BC’s Childcare Investments Have Major Impacts. http://www.livingwageforfamilies.ca/2019_living_wages
  2. Statistics Canada. (2016). Census of Population, Statistics Canada Catalogue no. 98-400-X2016229.
  3. National Employment Law Project, Data Brief July 2012. https://www.nelp.org/wp-content/uploads/2015/03/NELP-Big-Business-Corporate-Profits-Minimum-Wage.pdf

Check out the CSPCs most recent living wage report: https://communitycouncil.ca/new-living-wage-for-great-victoria-2019/

A Doughnut Shaped Recovery for Greater Victoria

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Can doughnut economics help us build a just recovery that is within our ecological limits?

Are you a municipal leader or planner? A local business owner? A community leader? An interested community member? Are you working to merge social and environmental values in your work?

Join us to hear from Andrew Fanning of the Doughnut Economics Action Lab in Oxford, Julia Lipton, Head of Innovation for C40 Cities in Copenhagen, Councillor Ben Geselbracht from Nanaimo and other municipal and community leaders in regions that are implementing a Doughnut Economics approach.

Kate Raworth’s idea of Doughnut Economics, is arousing a great deal of interest. The idea is simple. The economy has to be large enough to provide a decent standard of living for everyone (food, shelter, sanitation, education etc.), but small enough to stay within our ’ecological ceiling.’

Amsterdam has pioneered it, other European and North American cities are following their lead and here in Canada, the City of Nanaimo recently agreed to adopt it. Greater Victoria is coming together to talk about it.

More information on Doughnut Economics:

– See this series of 7 very short videos from 2017, starting here
https://www.kateraworth.com/animations/
https://doughnuteconomics.org/tools-and-stories/2
– or this longer TED Talk version
https://www.youtube.com/watch?v=Rhcrbcg8HBw
– or this webpage – About Doughnut Economics
https://doughnuteconomics.org/about-doughnut-economics
– Information on Businesses and Doughnut Economics
https://doughnuteconomics.org/faq/businesses-and-the-doughnut
– The Doughnut Economics Action Lab (DEAL)
https://doughnuteconomics.org/
– DEAL is turning the ideas of Doughnut Economics into practice, and we are engaging in
some pioneering initiatives and pilot projects with cities, communities, educators,
businesses and governments to do so. Here’s an overview of our work to date.
https://doughnuteconomics.org/projects
– Three Times Colonist columns on this issue by Trevor Hancock 31 January 2021 – True prosperity is doughnut-shaped
https://www.timescolonist.com/opinion/columnists/trevor-hancock-true-prosperity-is-doughnut-shaped-1.24275001
-7 March 2021 – Circles and Doughnuts – The local economy we need (Published as ‘Circular
economy doesn’t go far enough’)
https://www.timescolonist.com/opinion/columnists/trevor-hancock-circular-economy-doesn-t-go-far-enough-1.24291204
– 14 March 2021 – A Doughnut economy for Victoria (Published as ‘Doughnut economy means
not spending $100M on interchange’)
https://www.timescolonist.com/opinion/columnists/trevor-hancock-doughnut-economy-means-not-spending-100m-on-interchange-1.24294174