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The Living Wage movement goes global

The policy has taken hold in the US, UK and is finally catching steam in Canada

By: /
11 August, 2015
Mixed reviews for Britain's budget. (Reuters)
By: Tom Cooper
Director of the Hamilton Roundtable for Poverty Reduction

In Canada today, more than 1.8 million workers do not earn enough at their jobs to pull themselves or their families out of poverty.  These are Canada’s ‘working poor.’

As a community anti-poverty activist, I’ve seen more and more working families struggling with hunger, unaffordable housing and social exclusion. In many Canadian cities like my community of Hamilton, Ont., families make impossible choices every day: perhaps whether to purchase their child a birthday gift or buy groceries for the week.

Canada’s not alone. Working poverty is a reality for many workers in Britain, New Zealand, Ireland and the United States. The U.S. Bureau of Labour Statistics has identified more than 10 million workers in the United States who receive employment incomes that are insufficient to cover basic costs for shelter, food, utilities and other necessities.

In its most profound manifestation, last year a Walmart in Cleveland, Ohio, announced it was holding a food drive for its own employees.

Minimum wages simply aren’t cutting it. Set at the national, provincial or state level, statutory minimum wages are often arbitrary, politically derived figures that don’t come close to meeting the actual cost of living.

Stereotypes abound, but according to the U.S.-based Economic Policy Institute, 88 percent of low-wage workers are not teens; they are commonly individuals in their 30s, 40s, 50s – often women, and sometimes single parents struggling to make ends meet. Many work full-time hours without health benefits in the service or retail sectors but simply do not earn enough at their jobs to escape poverty.

An emergent international effort led by coalitions of community activists, anti-poverty organizations, labour and faith organizations is attempting to stem the tide of low wage work. The Living Wage movement — while not formally connected across borders — is shaped by a common belief that work should lift workers out of poverty and enable them to earn enough to purchase basic necessities.

The concept isn’t new. U.S. President Franklin D. Roosevelt advocated for living wages in the 1930s: “By living wages I mean more than a bare subsistence level – I mean the wages of a decent living,” he said.

‘Living Wage’ calculations reflect the cost of a basket of goods and services in local communities; they are evidence-based and have been validated by many economists. Importantly, living wages also provide a worker with the resources needed to participate in their community and have some opportunities for social inclusion.

The modern living wage movement started in Baltimore, Maryland in the 1990s. Since then, Living Wage campaigns have spread around the globe, and are particularly active in the English-speaking world.

In the United States, grassroots campaigns have focused on encouraging municipal governments to adopt living wages for both direct full and part-time workers, as well as requiring companies that contract with the City to pay their employees a living wage.

Today, living wage ordinances cover more than 150 jurisdictions in the United States, including New York City, San Francisco, Chicago, Los Angeles and Seattle. In May, Los Angeles City Council voted to increase its minimum wage from $9 per hour to $15 per hour.

New York City’s living wage procurement policy will impact 18,000 low-wage workers. As New York Mayor Bill de Blasio noted last September, “We cannot continue to allow rampant and growing income inequality. Every tool counts.”

In the United Kingdom, London Citizens, a non-governmental, grassroots organization, launched the Living Wage Foundation in 2001. Led by a group of parents in the East End of London, the Living Wage Foundation found success in engaging private sector employers who were committed to the moral and business value of adopting living wages for their employees.

Nearly 1,600 large and small British employers including furniture retailer Ikea, food giant Nestle, financial services employer KPMG and the Chelsea Football Club are accredited Living Wage workplaces.

Scotland’s Living Wage campaign has focused on engagement of public sector employers. Through the leadership of anti-poverty organizations and Scotland’s labour movement, most public sector employers in Scotland: universities, school boards and local authorities are now accredited living wage employers, including the Scottish Parliament.

The Aotearoa (New Zealand) Living Wage campaign launched in 2013 and the Republic of Ireland calculated a Living Wage in 2015.

There’s been some backlash to living wages from small business associations and right-of-centre policy think tanks. Canada’s Fraser Institute released a paper in 2014 stating “living wage ordinances, like minimum wage legislation, create distortions in the labour market that have a negative impact on employment.” But research from both the U.S. and U.K. tells a different story. Reports show when living wages have been implemented, productivity improves and there’s a significant reduction in training costs and worker absenteeism. Local economies are helped as workers who earn more, spend it locally helping to drive growth.

While a little slower to take hold, Canada’s living wage initiatives have quickly built momentum to engage both business and local governments.

New Westminster, B.C., became the first Canadian city to officially adopt living wage in 2010. Only a few weeks ago, in early July, with support from B.C.’s Living Wage for Families campaign, Vancouver Mayor Gregor Robertson put forward a motion at city council to make that city a Living Wage employer. It passed unanimously.

More than 20 communities in Ontario have initiated local living wage campaigns. The public school board in Hamilton, Ont., was an early champion of Living Wages, in part because of its commitment to reduce child poverty in that community. As Hamilton-Wentworth District School Board Trustee Alex Johnstone (now an NDP federal candidate) said in 2013, “the best way to tackle child poverty in Hamilton is to ensure parents earn a living wage.”

Alberta’s new NDP government is considering implementing a $15 minimum wage and Canada’s New Democrats propose, if elected in October’s federal election, to increase the minimum wage for all workers in federally regulated industries to $15 per hour.  Up to 120,000 federal employees employed in federally regulated banks, telecommunications and transportation could benefit from such a policy according to the Canadian Labour Congress. The Green Party of Canada has proposed a Guaranteed Liveable Income to respond to the low-wage economy.

While political support for living wages is growing, the movement’s popularity also presents challenges.

In early July, UK Chancellor George Osborne released an emergency budget which included a compulsory living wage for employers. The government committed to lift all British workers over the age of 25 to a ‘living wage’ of £9 by 2020 but at the same time cut long standing tax credits for workers This resulted in an overall reduction in income for these workers. As Sarah Wiktorski of Scotland’s Poverty Alliance noted, “What the government attempted to do in the budget was to co-opt a social movement…and use it to hide the fact that they are subjecting thousands of low paid workers and their families to further misery.”

As awareness of low wage work grows and becomes part of the national policy discourse, it is likely that it will also become an issue in the forthcoming federal election.

Living Wage is not a fix-all, and must be adopted in combination with other social policies and government benefits; by doing so living wages can help promote dignity, opportunity and economic prosperity for workers.

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