Why a living wage matters

By Vamini Selvanandan

With soaring food prices, unaffordable housing costs and rising energy bills, a living wage becomes ever more relevant for Albertans. Referring to the hourly wage a full-time worker needs to make to pay for basic expenses while maintaining a modest standard of living, a living wage is about ensuring dignity for all those who work and contribute to our economy.

It is not a way of offloading affordability challenges onto employers, but a way for governments, businesses and civic organizations to take collective responsibility for creating livable communities. Living wage calculations are made for specific communities and take into account municipal, provincial and federal tax deductions, financial supports and social services.

Shelter, childcare and food are some of the biggest costs in the calculation of a living wage, and such basic expenses can be significantly higher than what minimum wage can provide. In Alberta, the $15 per hour minimum wage has not increased in the last five years and is not indexed to inflation. So, for Albertans, minimum wage effectively decreases year over year eroding their purchasing power for goods and services.

Figures recently released by the Alberta Living Wage Network show that living wage in several towns and cities in our province is much higher than minimum wage and calculated to be $23.70 in Calgary, $22.25 in Edmonton, and the highest in Canmore at $38.80.

Ensuring that people earn a living wage has benefits for both individuals and society. People who live in adequate housing and can afford to buy healthy food for themselves and their children enjoy better physical and mental health, and raise healthy children. This in turn reduces the burden on our healthcare, social service and justice systems.  Additionally, a living wage allows workers to spend money in their communities, supporting local businesses and boosting economic activity.

For employers, paying a living wage is about more than “doing the right thing”, it is about making the right business decision. Savvy employers who pay living wages reap the rewards of their investment. In today’s climate of labour shortages, a living wage not only serves to attract workers during recruitment but also helps retain employees, thus decreasing the costs of rehiring and training. Living wages contribute to employee job satisfaction and overall health, and in doing so increase productivity. With loyal, happy and engaged staff, customers have a quality experience and keep returning.

Over a hundred employers, from small family-owned businesses to multinational corporations, have joined the Alberta Living Wage Network and committed to paying the living wage. Being certified as a living wage employer gives businesses a leg-up on their competition, signaling to customers that they care about their employees, and want to build sustainable communities with strong local economies.

But ensuring a living wage is not the sole responsibility of employers. Governments need to contribute to reducing the living wage through programs that make housing, childcare, transit and healthcare more affordable.

The Alberta government needs to raise minimum wage to better reflect what it costs to live a decent life in our province. They need to establish better labour standards, guaranteeing paid sick leave to workers and protecting us from the insecurity of precarious work. In collaboration with the federal government, the provincial government needs to provide universally accessible child care and improve access to health services through pharmacare and dental care programs.

Both provincial and federal governments need to make sure that income tax structures support a dignified standard of living. This means a more progressive taxation structure that requires low-income earners to pay very little tax, and high-income earners who can afford it, to contribute more.

Municipal governments can work with other levels of government to further reduce the living wage in their communities. They can support affordable housing projects, expand or create public transit that is affordable, accessible or even free, and provide services that increase food security for residents in their area.

When communities invest the time and energy in calculating a living wage, they are able to provide context to the affordability concerns of their residents. They create an instrument to use in advocating with employers to pay a living wage, and with governments at all levels to provide programs, services and tax breaks to effectively reduce the living wage.

As thoughtful and caring residents in a community, we too have a role to play in patronizing businesses that are certified living wage employers and using our influence with other businesses we frequent to ensure they become certified. Through voting in elections, writing letters to our elected officials and other civic actions, we can call on governments at all levels to strengthen affordability programs.

We must all take responsibility for creating and maintaining communities that are livable and where people and families can thrive. The living wage takes a systems approach to show how businesses, governments and civic organizations can work together to make sure that we can all live a life of dignity and fully participate in our community.

Vamini Selvanandan is a rural family physician and public health practitioner in Alberta.