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A Living Wage for Families

First Call: BC Child & Youth Advocacy Coalition

Columbia Institute Centre for Civic GovernanceFrom the Ground Up ConferenceMarch 7, 2009Adrienne Montani and Tim Richards

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What is a ‘Living Wage’?

Not a minimum wage, not legislated

Calculated for a family, not a single worker

Based on actual expenses in a given community, and taxes and gov’t benefits

Higher than the poverty line

The living wage call……

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The Need for a Living Wage For 5 years in a row, BC has had the highest

child poverty rate in Canada (21.9% in 2006, before tax)

54% of poor children in BC live in families where the adults work full-time/full-year or more.

Corporate social responsibility means paying a living wage. For those who want to end child poverty and ensure healthy child development, this is where “the rubber meets the road.”

Poverty as a social determinant of health

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Growing Inequality

Total Annual Income for Families with Children in BC

$0

$50,000

$100,000

$150,000

$200,000

$250,000

1993 1995 1997 1999 2001 2003 2005

Poorest Second Poorest Average Second Richest Richest

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Process for Developing a Living Wage

1. Brought together a group of academics, policy analysts, social partners and advocates to set a living wage

2. Outreach to stakeholders: First Call partner organizations and Living Wage Roundtables—social service groups, United Ways, faith communities; immigrant communities; union members, student and parent groups.

3. Focus groups with low income families and employers to receive feedback on and revise:

- assumptions in the calculation- the amount of the Living Wage

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Underlying Principles

The living wage enables the wages earners in a household to:

Feed, clothe and provide shelter for their family

Promote healthy child development

Participate in activities that are an ordinary element of life in a community

Avoid the chronic stress of living in poverty

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Assumptions and Methodology

The Living Wage is calculated for a family

of two parents and two children, aged 4 and 7 years;

with paid employment for seventy hours per week; estimated family expenses for 2007; and the four year old child in full time day care, 7 year

old in before and after school care and summer care.

Government transfers and taxes based on the 2007 tax year.

The family expenses are based in part on the HRSDC Market Basket Measure.

Family Expenses

Monthly Annually %

1. Food 652.00 7,826.00 142. Clothing & Footwear 192.00 2,300.00 43. Shelter 1,259.00 5,104.00 274. Transportation 523.00 6,272.00 115. Other 570.00 6,835.00 126. Childcare 982.00 11,784.00 217. MSP Premiums 108.00 1,296.00 38. Non MSP Health Ex. 133.00 1,596.00 29. Contingency Amount 195.00 2,344.00 410. Parent Education 83.00 1,000.00 2Total 4,696.00 56,357.00 100

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What Is Not Included?

The Living Wage is modest in comparison to community standards. It does not allow the family to

own a house; save for retirement; save for their children’s education; or service debt The recreation/entertainment budget is

very modest

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Total Family Expenses

The two-parent, two-child family has total family expenses of:

$4,696 / month, or$56,357 / year

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The Amount of the Living Wage

For Metro Vancouver

= $16.74 per hour

based upon the above family expenses, and factoring in government transfers and government deductions.

($16.39/hour for Victoria)

Formula for the Living Wage

Annual Income fromFamily = Employment +Expenses (Living Wage)

Income from EI and CPPGov’t Transfers - Premiums(CCTB, UCCB, GST, Federal TaxesChild Care Subsidy) Prov. Taxes

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Process for Calculating a Living Wage

The Seven Steps1. Deciding the Assumptions

A. Family size and compositionB. The hours of paid work per week

2. Determining the family expense amounts for your community (including consultations)

3. Calculating the government transfers received by the family

(CCTB, UCCB, GST Rebate)

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Process for Calculating a Living Wage

4. Calculating taxes and payroll deductionsA. EI and CPP PremiumsB. Federal TaxesC. Provincial Taxes

5. Calculating if available the Provincial Child Care Subsidy

6. Adjusting the wage amount to determine the living wage

7. Verifying the calculations (on-line calculators)

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What next? Some ideas…

What information do you need for a local calculation?

Compile information on local wages

of direct civic/BOE employees

of contractors’ employees

More ideas…

Build a strong community campaign for increased economic equality

Identify allies and champions

Community education and mobilizing support

Listening campaigns

Map low wage work and its impacts

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Resources

http://www.firstcallbc.org/about-currentProjects-LW.html

http://www.policyalternatives.ca/reports/2008/09/reportsstudies1958/?pa=4B59033D

http://www.qolchallenge.ca/news/viewnews.php?id=51

http://www.bclivingwage.org/

http://www.vibrantcalgary.com/livingwage/

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First Call: BC Child and Youth Advocacy Coalition

202-1193 Kingsway, Vancouver, BC V6H 3V4

Phone: (604) 875-3629/1-800-307-1212Fax: (604) 875-3569

E-mail: info@firstcallbc.org

Web site: http://www.firstcallbc.org/