Four years ago New Westminster, B.C. became the first Canadian municipality to institute a living wage policy. It’s been so successful that Vancouver is attempting to follow suit.
The living wage policy requires the municipality to pay its employees ─ and others who are on contract to do city jobs ─ enough to cover the main living expenses such as food, clothing, shelter, and transportation.
Joan Burgess, New Westminster’s director of human relations, says the city has no regrets and she has not seen any negative impact arising from the policy. Before the living wage came into effect, most municipal workers were already meeting it. The policy took care of all the remaining underpaid workers by increasing the hourly rate to a national high of $20.68.
Municipalities procure services through a bidding process and now those who want to win contracts with New Westminster know they are required to pay the living wage. Otherwise, stresses Burgess, “they’re jeopardizing future work with the city.”
In the past four years, according to Burgess, just four complaints have been filed by subcontractors who were not paid adequately. All four were resolved after an audit.
B.C.’s minimum hourly wage is currently $10.25 — less than half the living wage in New Westminster. Nunavut owns the country’s highest minimum wage at $12 per hour; Ontario’s is $11.
While New Westminster’s experience has been positive, Arthur Lammam, who wrote a report for the Fraser Institute in 2014 argues that unlike minimum wages ─ which tend to benefit those in lower-earning industries ─ living wages tend to target workers already in higher-skilled professions who are not at risk of poverty.
As more and more Canadian municipalities move toward setting up a living wage, there will be more data in the coming years to assess the pros and cons of this policy.