Image: CCPA

Who works for minimum wage? Grumpy high-school students spitting on your cheeseburger? Retired Wal-Mart greeters? Not quite.

In Ontario, you can work 40 hours a week for minimum wage, and still finish the year 17 per cent below the poverty line. This is bad; we know poverty is expensive; and even the Economist concluded that “No-one who has studied the effects of Britain’s minimum wage now thinks it has raised unemployment.”

I sat down recently with Greg deGroot-Maggetti, who is Mennonite Central Committee’s People in Poverty Program Coordinator. Greg is also Chair of Living Wage Waterloo Region, co-chair of the 25-in-5 Network for Poverty Reduction, a regular contributor to the excellently rigorous Strategy at Work blog and a very skilled busker — look for him Saturday mornings at the Kitchener Market with his kids!

I wanted to talk with Greg about the growing living wage movement. We did; and, on the strength of his experiences and knowledge, we also talked about the nature of democracy and the importance of local civic engagement, putting our values to work despite an increasingly degraded labour market, and acting for good despite the world being the way the world often is.

Today is part one of our conversation — stay tuned for part two, this Friday.

Jesse Bauman: Most folks are familiar with “minimum wage.” How is living wage different?

Greg deGroot-Maggetti: Minimum wage is provincially legislated, and bears no relation to what it actually costs to live in a community. Living wage starts by asking the question: what does it cost to live in a community, and how much do you need to earn, if you’re working full time, all year, to be able to make ends meet? The idea is you have enough to cover your basics, but also enough to be able to participate meaningfully in the life of a community. So it builds in, in addition to things like food, housing, basic healthcare expenses, transportation, some money for recreation and leisure, maybe continuing education for adults, a week camping at a provincial park.

JB:  Could you briefly discuss the history of the living wage movement in Kitchener Waterloo and southern Ontario? How have your strategies evolved over time?

GdM: Starting in 2008 there was an effort to get the Region to pass a living wage policy, which among other things would require everyone who did business with the Region to pay a living wage. But in 2009, when council was looking at it, we were in the midst of a recession and there was an election…so the policy kind of got put to sleep. However, around the same time a variety of organizations in Calgary, British Columbia, and Hamilton were pushing for similar things, and then in 2013 the Region embarked on a comprehensive approach to poverty, which involved a number of forums. At one forum the Mennonite Savings and Credit Union was identified as interested in being a LW employer, and so wanted to know: what is a living wage in the Region?

So there were a few years where it looked like nothing much happened, but then when the time was right, we were able to launch the campaign pretty quickly…

JB: So, where are we now, in the living wage movement in KW?

GdM: We have 10 employers and several others who’ve approached us, and a couple others who are very committed to signing on, who already pay living wages. Over the next three years our goal is to have 70 employers sign on.

The other exciting thing is our work to develop this as a more formalized provincial network. So we’ve been working with Living Wage Hamilton and the Canadian Centre for Policy Alternatives designing a proposal for a provincial program — which we’ve just found out will be funded for 18 months! To get larger — sometimes national — employers to sign on, we need to have more standardized parameters. We’ve also recognized the importance of graduated membership, so employers can say “we’re committed to these principles, and we want to come on and work towards them.”

JB: You’ve said where you hope to be in three or so years. So, imagining there were no insurmountable obstacles or limitations, what would the Living Wage campaign look like in five and 10 years?

GdM: I don’t think there are any insurmountable obstacles. Again, it starts with this question, what does it cost to live? We often hear that work is the best path out of poverty. So living wage poses the question, what does that mean?

Living wage gives us the benchmark — if we really mean work is the best path out of poverty, then this is what folks need to earn.

A big challenge for employers is that all they know is the minimum wage, that’s what they’re used to. But that’s not insurmountable. We’ve got all kinds of employers in all kinds of sectors who are already paying folks well enough that they can live a decent life.

They’ve organized work in such a way that they can afford to pay a living wage. That’s really what it entails.

Sometimes you hear the argument that if you raise wages, you’ll lose jobs. In reality, that’s not what has happened. The CCPA just released a study called “Dispelling Minimum Wage Mythology.” Their conclusion? Between 1983 and 2012 there is “no consistent evidence that minimum wage levels affect employment in either direction. Instead, the research concludes that employment levels are overwhelmingly determined by larger macroeconomic factors.” [JB: Princeton researchers made a similar point years ago.]

JB: OK so you’re starting to anticipate my questions a bit here, but why do we need a living wage? Doesn’t the labour market ensure that people are paid what they deserve–the value of what they produce? Isn’t a minimum wage job better than no job?

GdM: Well there’s a cost savings for employers to pay a living wage. You retain workers — less hiring and training — and as they stick around longer, they become more productive. The other thing is that a major driver of economic activity or production is consumption. And people at the lower end of the income scale spend most of their money on basic consumption like food and transit. And most of that is in the local economy. So when wages go up for folks at the bottom that actually contributes to economic activity, makes for a healthier, more vibrant local economy. In fact, we know most of the low wage workers work for bigger companies.

Living wage is also an ethical commitment.

There’s no such thing as an amoral market economy. That’s total fallacy. It’s human beings, making decisions. So if we say work should be the pathway out of poverty, then we need to put our values to work, actually. And we can’t just act as if market forces will just find solutions that are in line with our values. They may. But we might find there are a lot of people working and still going to the food bank and showing up at shelters, and that, frankly, is immoral. So we need to have a conversation about what decent work looks like.

JB: I keep reading about “precarious” work in our economy: fewer permanent jobs with benefits, more contracts, unpaid internships, and part-time work that really makes it hard to get by on. Isn’t it a risk to advocate for higher wages in this climate? Can employers really afford this? Won’t they close up shop and move their operations overseas to some place there are no labor regulations?

GdM: Yeah, I hear this argued sometimes, but again, I think it’s a bit of a fallacy. I mean, look at who is making a low wage in Ontario. Are cleaning services going to pack up and start cleaning offices in Beijing? Or coffee shops or hamburger joints. No, they’re going to be where the market is, they can’t leave. And you can look at many Scandinavian countries, they’’e making sure that employees in those sectors are well paid, and it’s working, economically. [JB: Full time McDonald’s employees in Denmark make about 45,000 USD a year. Seriously.]

But an important thing to keep in mind is that living wage in and of itself is not the answer. Lots of work is still precarious. There are still lots of jobs that don’t give enough hours, and employers who misclassify people as independent contractors so that they don’t qualify for minimum wage.

Another thing that living wage can do is capture the value of workers benefits, i.e. what it would cost if you had to pay for these things yourself. So this means that as more basic services are provided collectively — extended health care, for example — the living wage actually goes down. If government stepped up and made pharmacare universal or made transit less expensive, or provided refundable tax credits for low income folks, well then the living wage would go down even further.

 

Stay tuned for part two!

Images: CCPA