Wednesday, June 24, 2015
United Way Perth-Huron
A Living Wage: What it takes to make ends meet in Perth and Huron Counties
With the cost of living expenses such as food and housing continuing to climb, what does it now take to make ends meet? The Social Research Planning Council (SRPC), a supported partner of United Way Perth-Huron, in partnership with the Regional Labour Market Strategy project for Perth County, Stratford and St. Marys and the Huron County Health Unit has investigated the actual cost of living in our community and has released their latest report about the living wage for Perth and Huron Counties.
A living wage is the hourly wage a worker needs to earn to cover their family’s basic everyday expenses after taking into account governmental benefits, taxes and payroll deductions. For Perth and Huron County, the living wage amount has been calculated as being $16.47 an hour.
Ryan Erb, Executive Director of United Way Perth-Huron, noted that “calculating a living wage is only the first step.” He was encouraged that “so many people – business owners, economic development staff and others – have participated in this process. We all agree on one thing: people need to make ends meet. Getting there is a longer journey, but one worth travelling together.”
The living wage formula for Ontario is based on the nationally agreed-upon household structure of a couple-family with two young children. The costs associated with this family structure would also support other family types at different stages of the life cycle, for example, young adults who are planning a family or older workers who are nearing retirement. Due to government transfers and deductions the rate is not significantly different for individuals without a spouse or dependents. The costs of living expenses included in this calculation are conservative and reasonable, and provide for basic essentials such as food, clothing, shelter, transportation, and healthcare. What is not included are credit card or student loan debts, savings for children’s education or retirement, pets, lifestyle choices (such as alcohol, smoking), caring for disabled or elderly family members, or emergencies.
Research shows that living wages help improve the overall quality of life in a community and lifts children out of poverty by giving families a basic level of economic security, and allowing them to live without the constant stress of deciding which bills to pay. In our community half of all households (or approximately 26,000 people) have a total household income below the annualized living wage rate of $60,000 per year. This is a significant challenge.
Several employer focus groups were held to discuss what the impact of offering a living wage in our community might be for an employer. Overall there was a very positive reaction to concept of a living wage, although there was a mixed response to the actual monthly cost of living that was calculated. Some felt the budget was too conservative; others were surprised at just how much a family of 4 requires. Although openly receptive to joining a community-wide advocacy campaign to raise awareness of what it takes to make ends meet, several employers commented that living wages might have “unintended consequences” on community life. That if wages were to increase that municipal taxes and the cost of local products and services, such as a cup of coffee, would go up. However there are many factors that contribute to the costs of a product or service, not just wages.
What is often not taken into account is the social costs that result from low-wage work and poverty, such as poor physical and mental health outcomes, low levels of educational attainment, increases in homelessness, and high consumer debt-to-income ratios – costs borne not only by low-wage families but also by corporations, government and society as a whole.
Additionally, a living wage benefits employers in many productive ways. Employers who pay living wages report lower turnover and absenteeism rates, and greater employee engagement and loyalty. The extra money working families earn is spent in the local economy.
Shelley Groenestege, a local business owner shared that “Everyone should be treated with dignity. When employees feel valued, that they make a difference, a company is strong. We all grow together. We have been very fortunate to have great employees that produce an excellent product. We are pleased to have the living wage identified for us so that we can make sure we are doing our part in support our employees.”
For further information, please visit http://perthhuron.unitedway.ca/social-research-planning-council/living-wage.
For more information or to set up an interview, with Ryan Erb, Executive Director of United Way Perth-Huron, or Tracy Birtch, Director of Social Research and Planning Council, contact 1-877-818-8867 or 271-7730 or via email at srpc@perthhuron.unitedway.ca.
|