“... Poverty does not just mean financial insecurity, but rather it refers to the “chronic deprivation of the resources, capabilities, choices, security and power necessary for the enjoyment of an adequate standard of living.” - Canada without Poverty
Today marks the first day of Living Wage Week, an initiative by Living Wage Canada that seeks to celebrate activists and employers across the country that have taken steps towards tackling poverty by advocating and/or implementing a living wage for minimum wage earners. With the aim of building a national living wage movement, Living Wage Canada advocates that all families and individuals should earn an income allowing them to enjoy the basic necessities of life, live with dignity and have the ability to participate actively in society.
What is a living wage?
We are all familiar with the concept of a minimum wage, which is the lowest wage rate an employer can pay an employee. The minimum wage is set by the provinces and territories based on economic conditions, cost of living along with many other factors. However, workers across the country who earn a minimum wage are struggling to afford even the basic necessities of life. Essentially, increased costs of living such as rent, gas prices, utilities and others have dramatically outpaced increases in wages. What a living wage provides, then, is an income that takes into account the actual costs of living in a specific community and ensures that families can afford the basics such as food, clothing, housing payments, child care and transportation, to name a few. So far, Alberta is the only province that has committed to the implementation of a living wage by 2018.
The increase in advocacy for a living wage is not only happening in Canada, but in the U.S. and UK as well, signaling an international outcry. The demand for a living wage simply highlights the fact that a minimum wage fails to approximate the basic expenses of individuals and families, pushing them into a state of poverty and financial insecurity.
A living wage is calculated based on a family of four with both parents working full-time for 37.5 hours a week and does not cover finances needed for owning a home, savings accounts or paying off debts. Living wages will also vary from each community, as the cost of living in Toronto ($18.52), for instance, will be far more than Windsor ($14.15).
No policy proposal is without its critics and there are many misconceptions around the concept of a living wage which the Living Wage for Families campaign has worked to dispel:
- One critique of the living wage is that companies will hire fewer employees as a result of increased labour costs. However, studies show that businesses usually absorb cost increases related to living wage policies through a combination of price and productivity increases, reduced turnover and redistribution of staff.
- Some worry that a living wage will hurt local business owners. However, as small businesses gain their revenue from their community, an increase in wages indicates more purchasing power, putting wages earned back into the community.
- Others argue that if wages go up, prices go up. However there is no correlation between the two, as costs rise all the time without workers receiving a pay increase. Indeed, one study in Seattle found that the increase in minimum wage to $15/hour had no impact on the prices of goods and that costs went up by the same amount in Seattle as they did in surrounding communities that didn't see a raise to their minimum wage.
With this said, despite the benefits that a living wage would bring to those working minimum wage jobs, is it really needed in a country as prosperous as Canada? Is poverty actually a problem here? The answer is an absolute yes.
Poverty & Homelessness in Canada
It has been unequivocally established that poverty and homelessness are strongly correlated, where a loss of income acts as a major factor associated with homelessness. Thus, to help us gain a deeper understanding of our nation’s problem with poverty and its impact on the lives of Canadians, Canada without Poverty provides a helpful snapshot on the state of poverty and homelessness at this time:
- 1 in 7 (or 4.9 million) people in Canada live in poverty.
- Poverty costs Canada as a whole between $72 billion and $84 billion annually.
- Low-income families are not only more vulnerable to poor health than those earning a living wage, they use more healthcare resources because illness can make it harder to get out of poverty. Poverty can lead to sickness because of inadequate housing, poor nutrition, and less access to preventative health care. For example, poverty costs British Columbians $1.2 to $3.8 billion a year in increased health costs.
- Between 1980 and 2005 the average earnings among the least wealthy Canadians fell by 20%.
- Over the past 25 years, Canada’s population has increased by 30% and yet annual national investment in housing has decreased by 46%.
- Due to the epidemic of unaffordable housing in Canada, almost 1 in every 5 households experience serious housing affordability issues (spending over 50% of their low income on rent) which puts them at risk of homelessness.
- In Toronto, one study found that there were approximately 5,219 people who were homeless in 2013. Roughly half of the homeless population were on wait lists for affordable housing during the same period.
- Estimates place the number of homeless individuals living with a disability or mental illness as high as 45% of the overall homeless population, where people living with disabilities (both mental and physical) are twice as likely to live below the poverty line.
- 21% of single mothers in Canada raise their children while living in poverty (7% of single fathers raise their children in poverty), where women who work full-time earn about 72 cents for every dollar earned by men.
- Women parenting on their own enter shelters at twice the rate of two-parent families.
- Due to Canada’s history of colonization of Indigenous land and populations, Indigenous Peoples are overrepresented amongst the homeless population in virtually all urban centers in Canada.
- 1 in 2 Status First Nations children lives in poverty.
- 1 in 5 racialized families live in poverty in Canada, as opposed to 1 in 20 non-racialized families, where racialized women living in poverty were almost twice as likely to work in manufacturing jobs than other women living in poverty.
One important factor to be pulled from these statistics is that poverty occurs on a wide scale across race, gender, ability, citizenship status and space. It is clear, then, that despite misconceptions of poverty and/or homelessness as individualized failures, the massive scale at which 1 in 7 Canadians experience financial insecurity signifies that poverty is a structural, systemic problem that requires structural and systemic solutions.
A living wage & homelessness
A living wage for families experiencing poverty poses many benefits such as the ability to afford nutritious food and adequate housing, more time to spend with one's family, not having to juggle several jobs, time for civic engagement, positive early childhood development, increased psychological well being, reduced stressors from financial insecurity and several more.
However, despite the multiple benefits that the implementation a living wage would bring for those already earning a minimum wage, these benefits would not be accessible to those who face difficulty in gaining employment all together. Contrary to popular belief, many individuals experiencing homelessness are employed, where one study found that out of 3.5 million Americans experiencing homelessness, 25% have jobs. Yet overwhelmingly, individuals experiencing homelessness often face barriers to attaining and maintaining employment that include:
- No access to a phone or permanent address
- A lack of work-appropriate (or interview-appropriate) attire
- Gaps in employment history
- Unreliable transportation (inability to afford a vehicle or public transit fares) to get to interviews and/or employment
- Conflict between hours of work and hours of operation of homeless services including shelter access and meal programs
- Health and/or mental health issues can interfere with work, and lack of food, sleep and rest can make maintaining employment difficult, if not impossible
Other studies have found that for parents experiencing homelessness, inaccessibility to childcare is a barrier to employment. This study also found that along with an overall reluctance to hire individuals who have or are experiencing homelessness, stereotypes surrounding homelessness were pervasive and cast considerable doubts on the ability for individuals experiencing homelessness to obtain or maintain employment. It is also important to note that individuals experiencing homelessness are not a homogenous group, and that those experiencing homelessness that also face hiring discrimination based on race, citizenship status, disability, sexual orientation and gender are therefore even more vulnerable.
In light of the barriers identified above, it is clear that addressing and preventing homelessness through the eradication of poverty cannot be done by isolated interventions. Solutions such as reverting the decline in Canada’s social safety net, implementing a living wage, creating sustainable jobs, and providing affordable long-term housing supports to those who desperately need them are all necessary as we move to approach homelessness and poverty via a preventative framework.
For more information, visit Living Wage Canada to learn more about the Canadian Living Wage Framework.