Bomber Report

Get the latest news and features on the Big Blue as they battle in the CFL

View all features

Bomber Report

Winnipeg Free Press > Opinion > The View from the West > Living wages boost economy

The View from the West

Winnipeg Free Press - PRINT EDITION

Living wages boost economy

By: Marianne Cerilli

2/04/2009 1:00 AM | Comments: 0

In this time of economic hardship, living-wage policies are one way to stimulate our local economy. A living-wage policy is employed by at least 122 American cities with more than 70 others U.S. cities working on it. There are two Canadian cities, Calgary and Hamilton, making this commitment to ensure contract employees working on behalf of the municipality are paid a wage above the poverty line.

Someone on minimum wage in Manitoba will earn about $15,470 per year for a 35-hour week before taxes and deductions. This is for $8.75 per hour, which became the minimum wage on April 1. This is $6,196, or over 30 per cent, below the poverty line. If that minimum wage earner has a few dependents, then the family, after paying for food and housing, has virtually no disposable income to pay for other things like transportation, clothing, tenant insurance, and everything else. An economy with 20 per cent of workers with no purchasing power is not good for the local economy.

A living wage is calculated in various ways. One way is to tie it to the Low Income Cut Off or LICO, as Calgary has done. For a city our size, the LICO for an individual is $21,666 per year, or $11.60 per hour. The City of Winnipeg currently tenders contracts for services like janitorial service, security, tree trimming and snow removal. For Winnipeg, a living wage would apply for about 2,000 employees. The total cost for these contracts is millions of dollars. If these employees were paid $11.60 per hour instead of $8.75 it would be a $10-million investment into the local economy. Virtually all of this additional money would be spent on goods and services in our local economy. There would be a benefit to businesses and to various levels of government.

A study from Santa Rosa, Calif., examined how low-wage workers would spend their increased income. The highest spending would occur in housing investment and repair, household purchases, cars and car repairs and clothing, as well as child care and recreation. Paying off debt and savings for large purchases was also high. Studies show that in cities where living wages have been implemented, the actual costs to business average less than three per cent of revenue, and that increased sales or small graduated price increases easily cover these added wages. Furthermore, there is no evidence indicating businesses shy away from living wage areas. Actually, a thriving economy is more likely to attract new businesses and encourage expansion, thereby increasing employment in the community.

The federal government and its provincial counterparts could employ a living wage policy, not only to ensure their sub-contracted workers are paid a wage above the poverty line, but senior levels of government could also offer funds to municipalities to help cover the costs to pay living wages to people who work on behalf of cities. This could be part of a larger strategy to address poverty, something long overdue.

A living wage policy does not have to increase pressure on high-end civil servants at the municipal level, as the conservative Frontier Centre recently claimed in a policy paper. The centre raised many false alarms, including the notion that young people might abandon educational opportunities for work, but we really don't have to worry about living wages creating a disincentive to trash collectors giving up post-secondary education to earn under $15 an hour. Also, pay equity principles would apply so staff who are contracted by the city to do female-dominated jobs, such as child care, would make a living wage as much as other employees.

Living wage policies are one strategy that can be part of a larger poverty action plan that municipalities can undertake. This policy alone will not eliminate poverty, but it will make a big difference for poor employees under the control of municipal contracts, as well as add to the local economy.

Paying wages that cannot support an individual let alone a family is short-sighted. The difference between earning under $15,000 and $22,000 is significant, in terms of the quality of life and ability to participate in the community to play sports, go for dinner once in a while and afford tenant insurance. While government contracts that pay poverty wages contribute to a city of winners and losers, living wages are a win-win for everyone in the local economy and contribute to a city where everyone belongs.

Marianne Cerilli is a former NDP MLA and social activist.

Republished from the Winnipeg Free Press print edition April 2, 2009 A11

0 Commentscomment icon

You can comment on most stories on winnipegfreepress.com. All you need to do is register and/or login and you can join the conversation and give your feedback.

The comment period for this story has ended.

Follow

  1. Breaking News Alerts

    Sign up for our new Breaking News Alerts

  2. Editor's Bulletin

    Sign up for daily bulletins

  3. Winnipeg road closures

    Check if your commute is affected

  4. Blogs to Watch

    We pick our favourite local blogs for you to follow

  5. Breaking News Widget

    Create and embed a Winnipeg Free Press breaking news widget on your site or blog

  6. Twitter

    Follow our reporters and news feeds on Twitter

letters

Make text: Larger | Smaller

Our Communities

Poll

Should a grizzly bear that mauled three people in Yellowstone Park be killed?

View Results

Events

July 30, 2010

View all Events

Gavins Chance for Change

Golf Tournament Fundraiser includes 18 holes of golf, cart, smokie or hamburger for lunch and banquet dinner. Registration at 8:30 a.m. Shotgun start at 10 a.m. ...

[ View Full Event information ]