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The quest for a 'living wage' gathers steam

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In signing what he called a "sweeping expansion" of New York City's Fair Wages for New Yorkers Act this week, Mayor Bill de Blasio was underscoring the mounting calls for a "living wage."

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It's a campaign that spans many Western nations. In Canada, you could say it's in its infancy on a national basis, though clearly there's momentum.

"Employers increasingly are recognizing the benefits of paying a living wage," said  Donna Jean Forster-Gill, project manager for Tamarack-An Institute for Community Engagement's Vibrant Communities Canada - Cities Reducing Poverty.

"I would say that we're in the position that we're learning a lot from the U.K. and the U.S., and from New Zealand."

A living wage goes beyond minimum wage, a hot-button issue on its own, particularly among smaller businesses, and is seen by some adversaries as a job-killer.

Indeed, says Living Wage Canada, it strikes a "higher test" based on what households need given local costs of living.

"The living wage is a call to private and public sector employees to pay wages to both direct and contract employees sufficient to provide the basics to families with children," the group says in its only definition.

"The living wage is calculated as the hourly rate at which a household can meet its basic needs, once government transfers have been added to the family's income and deductions have been subtracted," it adds, referring to things like the Ontario Child Benefit or day-long kindergarten.

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"The living wage gets families out of severe financial stress by lifting them out of poverty and providing a basic level of economic security."

In New York's case, the expansion takes in employees of commercial tenants in projects that get more than $1-million (U.S.) in a city subsidy. Before now, the law sheltered just about 1,200 people, according to The New York Times, but is expected to cover some 18,000 over the next several years.

The living wage is also being raised to $13.13 an hour, from $11.90, and probably will climb to $15.22 by 2019, according to the city. The impact, the city says, will be to boost the lowest-paid workers to $27,310 a year from $16,640.

"We are raising the floor for working families struggling to get by," the mayor said in announcing the move earlier this week.

"With this order, thousands of breadwinners working at projects that will be supported by taxpayers will earn higher wages and be more likely to receive the kind of benefits critical to supporting a family."

The leaders in the field, Ms. Forster-Gill said, are the U.K., where proponents boast 900 employers on board, and New Zealand, while more than 150 U.S. municipalities have passed local laws.

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In Canada, there are several local groups and a growing national base.

But unlike in the U.K., Ms. Forester-Gill said, you can't calculate a single living wage in Canada because the provinces and territories have different government transfers.

Vancity, for example, the British Columbia credit union that bills itself as one of the country's biggest "living wage employers," notes that metro Vancouver's living wage, pegged at $20.10 a hour, is almost double that of the province's general minimum wage of $10.25.

"As a living wage employer we are building wealth into the communities where we live and work," Vancity, which employs about 2,400 people, boasts on its website.

"It's one of the best local economic development strategies we can employ," it adds, urging other employers to join in the action.

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About the Author
Report on Business News Editor

Michael Babad is a Report on Business editor and co-author of three business books. He has been with Report on Business for several years, and has also been a reporter and editor at The Toronto Star, The Financial Post and United Press International. His articles have appeared in major newspapers around the world. More

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