Living wage benefits workers and employers: United Way

By Ry Clarke - Lethbridge Herald Local Journalism Initiative Reporter on March 25, 2023.

Statistics Canada announced earlier this week that Canada’s annual rate of inflation cooled at 5.2 percent in February, their largest deceleration since April 2020, the start of the COVID-19 pandemic. StatCan notes that while inflation has slowed in recent months, increasing 1.2 per cent when compared with six months ago, prices have remained elevated. Food purchased from stores rose 10.6 per cent year-over-year in February, making it the seventh month of double-digit increases.

With affordability on the top of consumers minds these days, the cost-of-living crisis is affecting low-income groups with shoppers having to use more disposable income on essential goods and services.

With inflation taking a bite out of affordability, consumers are pushing for a living wage.

“The minimum wage is set by the provincial government. Right now that is $15-an-hour. The living wage, basically is a formula for individuals, families of four, lone parent families, that is designed for what the standard of living would look like based on calculations for your municipality,” said Jaci Zalesak, Executive Director of the United Way Lethbridge and South Western Alberta. “Lethbridge’s living wage is calculated at a rate of $20.30 an hour. That’s the weighted average – every municipality is different.”

Having a living wage has benefits for both employers and employees.

“When employers decide to pay a living wage it has an impact on their workers,” said Sharon Yanicki, volunteer with Social Health Equity Network of Lethbridge and Area (SHENLA) and member of the Alberta Living Wage Network.

“There is evidence suggesting that workers who get a living wage have less financial stress, they are able to participate in community life. They can move their life forward through opportunities in education, and participation in the community. It helps to also create a more stable workforce, because there is less turnover for your workers when a business that is able to pay for living wage. You have a more productive workforce when employees stay longer.”

Yanicki notes a study out of Seattle that looked at the price of goods and services when minimum wage was raised.

“It didn’t raise their prices in comparison to other communities in any significant way,” said Yanicki. “There are also studies by the Bank of Canada in 2017 when they were looking at what would happen in provinces that went ahead with scheduled minimum wages. I know a minimum wage is not the same as a living wage, but these studies have been done looking at the lowest wage employees. They found that a scheduled minimum wage increase would contribute roughly .1 per cent in 2018 to inflation in 2018. That .1 per cent compared to the 6.5-per cent increase in inflation in Alberta last year is not really much.”

The living wage looks for adequate compensation for employees so they can earn enough to cover basic expenses while still being able to participate in their communities. With inflation, the living wage climbs higher when goods become harder to afford.

“The government is doing a great job on trying to invest in transportation, topping up childcare, and investing in community programs. They are doing their part on helping keep the costs down or subsidize where they can,” said Zalesak.

“Everybody is doing their part, it is not just on the employers part on topping up wages. We all have to do our part on supporting each other.”

There is hope that affordability at the checkout will soon follow with inflation easing.

“We are looking at benefiting those who most need that opportunity to be able to afford to live in our communities. Living wage is beyond the cost of minimum wage. It creates a difference,” said Yanicki. “It is being able to live in a way that helps you meet your basic needs.”