Corporate social responsibility means paying a living wage
Seth Klein, Deborah Littman, Adrienne Montani and Tim Richards
Vancouver Sun
September 30, 2008

Families who work for low wages often face impossible choices: Buy clothes or heat the house, feed the children or pay the rent. The result can be spiralling debt, constant anxiety and long-term health problems.

In many cases it means working extremely long hours, often at two or three jobs, just to pay for basic necessities, leaving little time to spend with family.

In British Columbia, the contradiction between a strong economy and growing economic insecurity is especially stark. For five years running, B.C. has had the highest child poverty rate in Canada.

The story of child poverty is very much a story of low wages. More than half of B.C.'s poor children live in families where at least one person works full-time.

Something is not right when families are doing all the right things yet still struggling to meet basic needs.

A living wage is one of the most powerful tools available to address this troubling state of poverty amid plenty. For those employers committed to ending child poverty, this is truly where "the rubber hits the road."

A living wage is not the same as the minimum wage, which is the legal minimum employers must pay. The living wage calls on public and private sector employers to meet a higher test, for both their direct staff and their main contractors.

It reflects what a family needs to bring home, based on the actual costs of living and raising children in a specific community. It would allow families to escape poverty and severe financial stress; ensure healthy child development, and participate fully in their communities.

Our recent report, Working for a Living Wage 2008, calculates what the living wage is for both Metro Vancouver and Greater Victoria. The calculation includes basic expenses for a two-earner family of four with two young children (such as housing, food, clothing, child care and transportation), and also incorporates government taxes, credits, and subsidies. It assumes both parents are working full-time.

But the living wage is also a conservative, bare-bones budget, without the extras many of us take for granted.

… The bottom line: The living wage in Vancouver is $16.74 an hour, and $16.39 in Victoria.

Importantly, our living wage calculation is also enough for a single parent with one child, although a single parent with two children would have a much tougher time.

Living wage movements have been gaining ground over the past 20 years, across the U.S., the U.K., and in a number of Canadian cities.

In 2004, the mayor of London responded to broad public pressure by agreeing to annually set an official living wage figure for the British capital. All workers employed by the Greater London Authority -- either directly or on contract -- are paid at least that amount.

A growing number of leading U.K. corporate employers now see the benefits of paying living wages, such as HSBC Bank, KPMG, and PricewaterhouseCoopers.

Some of these employers were reticent at first, but most have found important benefits to becoming a living wage employer: Improved recruitment and retention; higher productivity, and being able to market oneself as a living wage employer.

The living wage is not just about employers, however. Government policies and programs also have an impact on our standard of living, and as a result, on the living wage. Direct government transfers can put money into the pockets of low-income families.

However, most government transfers and subsidies (such as the Canada Child Tax Benefit, the GST credit, and B.C.'s child care subsidy program and rental assistance program) are reduced or eliminated once a family reaches an income well below the living wage.

The living wage is also affected by public services. For example, a public child care system, increasing the stock of affordable housing, or lower public transit fares would all decrease the amount employers need to pay to provide a living wage.

If employers feel unable to pay the living wage, but remain committed to ending child poverty, then they should become advocates for these kinds of policy changes.