Oct 25, 2011

Living Wage Policy: Why Municipal Governments should lead the way


By Michael McCarthy Flynn and Seth Klein

The Living Wage for Families Campaign, along with 54 organizations representing over 300,000 British Columbians, recently issued an Open Letter calling on all municipal election candidates to help low-income families in their cities by passing a Living Wage policy if they are elected (available here).

Many families are struggling to get by; they are working hard but just can’t keep up with ever rising living expenses. Despite the recent increase in the minimum wage, it is estimated that at least 25% of families with children in the Lower Mainland still earn less than a living wage income, that is, a wage that allows them to cover their basic living expenses (calculated at $18.81/hour in Metro Vancouver). Fifty percent of single parents with children don’t earn a living wage. This is especially true of the ‘hidden workers’ who support the work of our cities; the people who clean our buildings, who provide our security services, or who serve us our food.

Why should municipal governments care about this? Because it is municipal governments themselves that end up paying a large price for these low wages.   Families earning low wages mean there is less money circulating in the local economy, and parents (forced to take on more hours or a second job to make ends meet) have less time to spend with their children. Municipal governments and school boards consequently end up filling the gaps by paying for additional services and policing costs.

Some business leaders are concerned about the living wage. They claim that it will negatively affect the private sector. Yet leading businesses around the world are voluntarily agreeing to become living wage employers. Businesses like KPMG and LUSH in the UK, and now Vancity credit union here at home. These employers commit to pay the living wage, not only to their direct staff, but also to contracted staff in traditionally low-paying sectors. And here’s the big surprise – they have all determined that doing so is good business practice.

The call for a living wage has also been falsely labeled as a “union” demand. In fact, most people earning less than the living wage are not unionized. Moreover, the call for a living wage has come from a broad cross-section of organizations – faith groups, parents groups, immigrant groups and community organizations such as the United Way of the Lower Mainland and the Health Officers Council of BC. They understand that a living wage is key to ensuring healthy childhood development and community cohesion.

Opponents of the living wage have claimed that small businesses will go bankrupt, that cities will face huge cost increases, and that even your granny will be negatively affected. Yet these attacks conveniently forget to mention that countless studies have shown that the cost to cities of living wage policies are minimal – New Westminster’s Living Wage Policy is costing less than a quarter of one percent of their budget – or that families who earn living wages have more money in their pockets to spend in local businesses.

Wherever you stand on the political spectrum, nobody can deny the fact that many families are struggling to get by. The data indicates that child poverty in BC is mainly a low-wage story; the vast majority of the 100,000 children living in poverty have at least one parent in a low wage job, with a third working full time in the paid labour force.

This is an area where municipal governments can and should lead. In doing so, BC cities will be joining 140 US cities who already have living wage ordinances of some form.

Will living wage policies result in a slight increase in costs for municipal taxpayers. The short answer is “Yes, but only slightly.” But the real question is this: do we as municipal taxpayers want people employed –– on our dime –– at a wage rate that cannot ensure healthy childhood development or allow parents the time to be with their children and participate in the social and civic lives of our communities?

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Michael McCarthy Flynn is an organizer with Metro Vancouver Living Wage for Families campaign. Seth Klein is BC Director of the Canadian Centre for Policy Alternatives and a co-author of Working for a Living Wage.

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