What Is a Living Wage?

A living wage is the hourly rate that allows working people to have a decent quality of life. Calculated for a family of four with both parents working full time (37.5 hours per week), it provides enough income to cover basic expenses like housing, food, clothing, utility bills and transportation, plus a modest amount for health insurance (prescription drugs and dental care), recreation and entertainment.

“No one who works full time should have to live in poverty.” This statement several years ago by former president Barack Obama, echoing similar statements by many other people, underlies the call to employers to pay their employees a living wage.

How much is a living wage in Halton?

The living wage is the hourly rate that ensures that a person working full time, full year, earns enough to participate in the normal life of their community. In Halton the rate has been calculated by researchers at Community Development Halton (CDH) to be $20.75 per hour (2021). If the employer pays benefits, the hourly rate would be reduced accordingly.

CDH works in close partnership with the Ontario Living Wage Network (OLWN), Since we last made calculations in 2019, new policies that provide support to families with children have been introduced by the provincial government. Combined with changing family demographics, it has become clear that expenses for a reference family of four is no longer the most representative for living wage calculations in Ontario.

New supports for families with children meant that living wage calculations were coming back with reductions over the 2019 rates. Yet we all know the cost of living has not gone down. Inflation has quadrupled since the beginning of 2019 and is at a 18-year high. Our calculation was no longer reflecting reality.

The 2021 calculations take into account a weighted average between a family of four, single parent with one child, and a single adult.

Because of this change in the calculation process we are not able to easily compare calculations from 2019 to those updated this year. In some communities, living wage rates have remained close to previous calculations while other rates have increased more dramatically. The 2021 living wage rates reflect changing demographics in our province and increases in inflation. We believe they accurately reflect the realities of costs in Ontario.

You can see the updated 2021 calculations at Calculating a Living Wage for Halton – 2021 Update

The 2019 report, Calculating a Living Wage for Halton – 2019 Update, is available at https://cdhalton.ca/2019/11/04/calculating-a-living-wage-for-halton-2019-update/

The 2016 report, Calculating a Living Wage for Halton – 2016 Update, is available at https://cdhalton.ca/2017/05/02/living-wage-2016-update/

The 2013 report, Calculating a Living Wage for Halton, is available at https://cdhalton.ca/2013/05/17/living-wage-discussion/, as all as A Discussion of a Living Wage for Halton: https://cdhalton.ca/2013/09/03/cd1806/

What about the minimum wage?

On June 1, 2017 the Ontario Government announced that the minimum wage would rise from $11.40 an hour to $14.00 an hour on January 1, 2018, and to $15.00 an hour on January 1, 2019. As about 30 per cent of workers currently earn less than $15 an hour, these increases will be welcomed by many thousands of workers. Overall, they will raise many thousands of families above the poverty line. However, the $15 an hour wage rate was not implemented, as a new provincial government was elected in 2018 that froze the rate at $14 an hour until September 2020. Then it was raised to $14.25 an hour and in October 2021, to $14.35 an hour.

While entirely welcome, the minimum wage of $14.35 an hour in 2021 is still over $6.00 an hour less than the living wage for Halton in 2021. That extra amount is significant as it would enable a typical family to afford, not only the basic costs of housing, food, utilities and transportation, but also many other things that most families take for granted.  Instead of living on the edge of poverty, they would be able to participate in the normal life of the community in which they live, and that would contribute greatly to their sense of well being.

Basic Income or a Guaranteed Annual Income

The living wage campaign is only one approach to boosting incomes in an economy in which many people work for low wages.  Another approach is to ensure that all households receive a Basic Income (or a Guaranteed Annual Income) sufficient to put them above the poverty line.  The Ontario Government launched a Basic Income Pilot project in the spring of 2017, but saw an early cancellation of the pilot when a new provincial government was elected in 2018. See the report, Basic Income Consultations: What We Heard, March 2017: https://www.ontario.ca/page/basic-income-consultations-what-we-heard, https://files.ontario.ca/bi_wwh_final_english.pdf

Precarious employment

In the Greater Toronto and Hamilton Area (GTHA), only half of working adults have full-time jobs with benefits and security. All the rest are “precariously employed”—working either full-time or part-time with no benefits or job security.  Many have jobs that are temporary or casual, or they are hired on short-term contracts.

A recent video about precarious employment in Halton brings to life some ways in which precarious work affects people, particularly young people:

When one of the people in the video is asked how she would feel if she were paid $15.00 per hour, she answers, “That would be awesome!”  That amount is less than the living wage for Halton, but her heartfelt response draws attention to the constant struggle of people suffering from what has been called “the scourge of low wages.”

2 Thoughts on “What Is a Living Wage?

  1. John Goodings on June 20, 2017 at 1:24 pm said:

    Your work is essential. This is a major way in which to advance Canadian society. The immediate question: how do we pay for it? I firmly believe that if \”the 1%\” were to pay an additional 5% in tax, there would be two immediate consequences: (a) it would generate a LOT of money; (b) it would not affect their lifestyle AT ALL. Only politicians can bring this about. We need more politicians who have vision for the longer term, and the guts to do what is right.

  2. do you mean the .1%. Rather then increase wage and cause layoffs and open the door for automation killing jobs, why doesnt the brain trust just reduce tax on min wage earners so tehy effectively get an increase. then there wouldnt be the 50000
    lost jobs that the Financial accounting office of ontario has identified

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