Living Wage Myths and Facts

MythThe minimum wage is the same as the living wage

 

 

FactThe minimum wage is different than the living wage. The minimum wage is the legislated minimum set by the provincial government. Thousands of families making the current minimum wage in BC are still living below the poverty line. A living wage calls on employers to meet a higher standard, to ensure that wages for their staff and major contractors reflect the true costs of living in a community and that parents can earn what they need to support their families.

 



MythCompanies hire fewer employees if paying the living wage increases their labour costs

 


FactStudies show that businesses usually absorb cost increases related to living wage policies through a combination of price and productivity increases, reduced turnover and redistribution of staff. Most workplaces don't have staff that they can do without. When BC raised its minimum wage from $8/hour to $10.25/hour in a relatively short amount of time there was a very small (1.6%) reduction in the employment rate for youth between the ages of 15 and 24 in BC (The Case for Increasing the Minimum Wage, 2015). This is a very small number and we can't be sure that the 1.6% reduction in the employment rate for youth was entirely due to the change in minimum wage or if there were other factors that changed how many youth were working.

 


 

MythLow wages only affect students and young people – they don't need a living wage

 

Fact.pngA significant number of low-wage workers have families. Paying the living wage will lift these families out of poverty. In BC, one out every three poor children live in families with at least one adult working full-time, year-round (BC Child Poverty Report Card). For example, if we look at workers earning $12-$15/hour only 5% are teenagers and 21% were young adults (The Case for Increasing the Minimum Wage, 2015). Many families across BC are struggling to make ends meet on low wages.

 


 

MythLiving wages hurt small businesses

 

 

FactA living wage policy is good for the local economy. Small businesses draw their customers from the local community, and higher incomes allow families to purchase more goods and services in their own neighbourhoods.

 

 


 

Myth If wages increase, prices in stores will go up

 

 

FactCosts rise all the time without workers receiving a pay increase; wages are just one of many factors contributing to the cost of an item. In addition, living wage policies cover only a small percentage of the labour force. When Seattle committed to raise their minimum wage to $15/hour researchers started studying consumer prices for goods. They found that the increase in minimum wage had no impact on the prices of goods, that costs went up by the same amount in Seattle as they did in surrounding communities that didn't see a raise to their minimum wage (University of Washington Minimum Wage Study, 2016).

 


 

MythWorkers need to educate their way out of poverty

 

 

FactUnder current government policies it is nearly impossible for low-wage workers to afford education or training so they can qualify for higher-paying positions and still have the time and money needed to care for their children effectively. In addition, the business sector will always need low-skilled service workers, such as janitors, cleaners and other support staff, in order to run smoothly and maintain service standards. Listen to Mary Lyn Diana from the Hospital Employees' Union talk about her attempts to educate herself out of poverty.