Increased housing and food costs have resulted in an increase in the living wage across the province again this year.
Living wage is a calculation used to determine the bare minimum that a family of four, including two parents and two children, needs to make to get by. It takes into account various government benefits and is calculated by determining the cost of a basic basket of goods and services that meet minimum standards of living. In short, it’s the bare minimum needed to get by and have modest savings for emergencies.
In the Cowichan Valley, the living wage increased by 7.1 per cent in the past year to $25.20 per hour. That’s sitting pretty close to larger urban centres such as Greater Victoria ($25.40) and Metro Vancouver ($25.68).
Other Island communities saw even greater increases to the living wage in the last year. In the Comox Valley, the living wage increased by 8.7 per cent to $22.02. Out of 19 communities across the province, Nanaimo saw the largest increase to the living wage. It rose by 11.9 per cent to $22.87.
The increase, according to the Canadian Centre for Policy Alternatives, is largely due to increasing costs for necessities such as shelter, food and transportation. The increases weren’t offset by increased government benefits for things like child care and dental care.
“Some government initiatives have created some pretty big savings over the last year … but that’s basically just been eaten up by increases in other areas,” says Ryan Watson, an administrative assistant with Social Planning Cowichan who helped lead the living wage calculations in the Cowichan Valley region.
In the face of these increasing costs of living, Social Planning Cowichan and the Canadian Centre for Policy Alternatives are encouraging employers to pay their employees a living wage in order to support their health and wellbeing and support the local economy.
Why is the living wage important?
The Canadian Centre for Policy Alternatives says the living wage is important because it allows workers in B.C. to participate in their communities while affording basic necessities for survival. A living wage also supports the healthy development of children and the health and wellbeing of workers by helping them escape financial stress and giving them time to spend with their families instead of at multiple jobs.
According to the 2023 living wage report from the Canadian Centre of Policy Alternatives, a 2019 study says 29 per cent of workers aged 25 to 65 reported working in multiple jobs to make ends meet.
“The living wage is a powerful tool to ensure paid work results in a decent standard of living and enables a life that is about more than a constant struggle to get by,” the report says.
Living wage is different from minimum wage, which is the legal minimum that employers across the province have to pay. The minimum wage in B.C. is currently $16.75 per hour, almost $9 less than living wage in the Cowichan Valley. In the last two years, the gap between living wage and minimum wage has “widened rapidly,” according to the living wage report.
“Recent increases to the minimum wage (based on general inflation rates) have been welcome but clearly far from sufficient, and more must be done urgently to better support low wage workers in B.C.,” the report says.
The moving penalty
In 2022, the Canadian Centre for Policy Alternatives performed extra calculations to ensure shelter costs were more accurate to the current reality in the province.
Prior to 2022, data for shelter costs came from the Canada Mortgage and Housing Corporation. The data from CMHC aggregates what new renters are paying with the rent that long-term tenants — who benefit from caps on rent increases — are paying. But that skews the numbers, as the difference between new and long-term rents has “sharply widened,” the 2022 Living Wage report says. The data also only comes from purpose-built rentals and doesn’t account for the secondary rental market — which includes privately-owned condos or basement suites.
The new methodology used for living wage calculations reflects shelter costs more accurately, and was partially why living wage spiked across the province last year, with increases between 17 and 25 per cent.
This year, the same methodology was used to calculate shelter costs, Watson says, with the addition of data from the most recent census. In the Cowichan Valley, the cost to rent a three-bedroom home is estimated to be $2,384.78 per month, according to Social Planning Cowichan. This is an increase of around $312 per month — or 17.6 per cent — from last year.
Watson says the methodology to calculate shelter costs also accounts for something called a “moving penalty.”
“In previous years, there was sort of a presumed stability for rents. It was presumed that a family was living in a unit for a long period of time, but it’s now understood that that’s not especially realistic,” Watson says. “They often have to move for various reasons [including] finding work or evictions.”
British Columbia has the highest eviction rate in the country. The 2023 living wage report says evictions have become “a grim reality that is partly driven by B.C.’s reliance on the secondary rental market.”
Renters who have to move — for whatever reason — face low vacancy rates and rising rents and there is a large gap between rents for units that have just been turned over to a new tenant and those that have long-term tenants.
Other contributions to the increase in living wage
Following shelter costs, food was the second-most expensive item in the living wage family budget, according to Social Planning Cowichan. In the Cowichan Valley, food costs for a family of four were $1,280.19 per month — an increase of $74.36, or 6.1 per cent, from 2022.
“At the grocery store there’s all kinds of sticker shock,” Watson says. “That’s one that everybody’s noticed.”
According to this year’s living wage report, food prices in the province are increasing nearly twice as fast as inflation. The high food prices led to Canada’s Competition Bureau recommending efforts to increase and promote competition in Canada’s grocery industry. Recently, the heads of major grocery chains in Canada were called again to Parliament to explain their plans to stabilize food prices.
Transportation costs are the third-most expensive item in a living wage family’s budget, according to Social Planning Cowichan. In the Cowichan Valley, the cost of transportation sits at $953.32 per month.
Watson says that due to the lack of adequate transportation options in the Cowichan Valley and the rural nature of many of the communities, Social Planning Cowichan factored the cost of two vehicles per household into the calculations. In larger cities where transportation is more readily available, the transportation calculation typically only allows for one vehicle per household and the cost of taking transit — like a bus pass.
The increasing rents in urban centres are forcing many people to move to suburban communities, many of which are underserved by public transportation, the living wage report says. This increases their transportation costs and also lengthens their commutes to work, taking away valuable family time or time that workers could be spending on themselves and things that support their wellbeing, Watson says.
A push for living wage
Both Social Planning Cowichan and the Canadian Centre for Policy Alternatives encourage employers to pay a living wage and become certified Living Wage Employers with Living Wage for Families BC.
The living wage calculation doesn’t cover other expenses such as loans, debt, interest payments, retirement savings, education savings or costs of caring for a disabled, seriously ill or elderly family member. There also isn’t much of a cushion for emergencies, either.
“It’s just so bare bones, … there’s no extravagant entertainment or vacations or anything. You can’t really save for a house with these numbers. If you’re not meeting these bare minimums then you’re having to sacrifice something and not quite able to live the life that you might want,” Watson says. “It seems like such a high number for employers to pay but it really is the bare minimum.”
Watson notes that if employers provide non-optional benefits to employees, it reduces the amount they have to pay per hour to be part of the living wage program.
Policies to support affordable housing, rent control, lower food costs and better transportation can also help people meet their expenses, Watson says, and could go a long way to reduce the cost of living.
And the Canadian Centres for Policy Alternative says in its 2023 living wage report that direct government transfers can also support low- and middle-income British Columbians. For example, provincial and federal child benefits support families with children by putting money directly into their hands to meet expenses.
Right now, many people don’t qualify for direct transfers and subsidies despite the fact that they make less than living wage, the report says. For example, families making more than $62,175 don’t qualify for the federal GST credit. The BC Rental Assistance Program is not available to families making more than $40,000 — lower than the poverty line for a family of four in B.C.
The 2023 living wage report calls on governments to review low-income transfers and credits to ensure they are updated and adjusted with the cost of living in mind.
“When government transfers fail to keep up, the families hardest hit include workers who are already marginalized in the labour market, including single mothers, Indigenous people and recent immigrants,” the report says.
In general, Watson says the living wage increases the wellbeing of community members because it allows them to care for themselves and, in turn, show up for their jobs, families and communities.
