Thank you.
Good evening. Thank you for inviting me to speak with you. I'm Catherine Ludgate. I'm a manager in the community investment team at Vancity Credit Union, based in Vancouver. I'm actually in Saskatoon at a conference of all credit unions.
I'm Vancity's lead on our adoption of the living wage and its advocate to other employers to adopt the living wage. This committee knows the statistics about pay inequality in Canada and has heard and will hear from many more experts offering analysis and tools.
I'm here to talk about one of the tools that employers can use to address pay equity and the poverty that results from low-waged work. As The Globe and Mail recently reported:
Women are lagging at both the bottom and the top of the pay scale. At the lower end, women are more likely to earn minimum wage, work part time and live on low income, particularly if they are aboriginal or a visible minority. Erratic scheduling and insecure work makes life more difficult, especially for single mothers.
That was from just a couple of months ago from The Globe and Mail.
Many discussions about pay equity focus on the glass ceiling and the inequity of pay in middle-income management and leadership roles. Of course this must be addressed, but let us not forget about those workers who work full time, year round, in minimum-wage jobs, many of which are gendered roles, such as hospital workers, service workers, retail sales agents, clerical agents, and janitors.
This group of critical services is populated in large measure by women. In the absence of adequate minimum wages and important social programs such as universal and accessible child care, the voluntary adoption of the living wage is one tool that employers themselves can use to improve working conditions for women at the bottom of the pay spectrum in Canada.
It is a proactive model. It's within the reach of most employers. It is being adopted by credit unions across the country. It simply and directly addresses the low wages that are paid to some of the most vulnerable workers, some of the most vulnerable women in our communities.
I'd like to focus on the connection between low-wage work and inequality and poverty for the remainder of my remarks.
Canada, a country of very rich resources of all kinds—natural and environmental, social capital and community, educational and technological—is a country with a poverty crisis. By its own reporting, Statistics Canada notes that one in seven Canadians lives in poverty, meaning almost five million people. In a 25-year period, from 1980 to 2005, average earnings for the lowest-paid Canadians fell by 20%. In my home province of British Columbia, one in five citizens now lives in poverty, and a majority of those are working full time, full year.
What is to be done? We need federal and provincial poverty reduction strategies and we desperately need a federal housing strategy and a universal child care strategy, but concurrent with citizen advocacy to press for better public policy, employers ourselves can play a role in poverty and inequity in our communities. One of the best tools available to employers is the adoption of the living wage.
The living wage is a calculation of what it costs for a family of four—two income-earners and two small children—to address the cost of child care and to make basic ends meet. In metro Vancouver, that wage is now calculated at $20.64 per hour. That wage is composed of base pay offered by an employer and the value of non-mandatory payroll benefits, such as extended medical coverage or a transportation allowance.
The wage is updated each year based on a transparent methodology developed by the Canadian Centre for Policy Alternatives, and it calculates inputs such as housing, transportation, child care, food, household supplies, an education for parents, and some costs for social participation, such as enrolling children in limited after-school activities.
The living wage is not a luxurious wage. It doesn't include paying off any existing debt or saving for retirement or saving for one's children's education. It simply covers the costs of getting by at one full-time job per adult worker.
In B.C., we calculate that the living wage includes almost $4 an hour to cover the very high cost of child care and $1 an hour to cover the co-pay aspect of our provincial medical insurance program. With better public policy and programs around accessible child care and medical premiums, the living wage would be reduced to closer to $15.00 an hour, in line with various calls for an increased minimum wage across the country.
In the absence of those public programs, the voluntary payment of the living wage is how employers can address poverty and pay inequity in our communities.
My credit union became a living wage employer in 2011 and is proud to have recertified the new living wage rate each year. We actively encourage other employers, and in particular credit unions, to join us as living wage employers as a best practice for employers. By the end of 2015, seven credit unions across Canada had become living wage employers, and now we are eight.
We learned a lot as we became a living wage employer. We learned that where we had subcontracted out for labour supports—for janitorial, security, temporary agencies, and offsite catering—those workers who served us were making minimum wage, and those jobs were largely gender-based.
The janitorial staff were working at two or three jobs. They were at another workplace during the day and then cleaning our buildings at night. As we moved to paying a living wage through those subcontracts, those janitorial staff no longer had to work at multiple low-wage jobs. Janitorial staff can now work at one fair-paying job, and those moms now have time to participate in the lives of their families, to read to their children, to play with their kids. The security staff can now make food choices they hadn’t made before and can look after aging parents.
For our own staff, pride in who we are as an employer increased. Universally for living wage employers, the experience is that the cost of attraction, recruitment, and retention goes down significantly. Productivity goes up. Morale improves. In fact, morale improves for everyone as employers create more just, equitable, and inclusive workplaces.
Thank you, Madam Chair and members of the committee, for inviting me to speak today about the living wage. The voluntary payment of the living wage by employers is both the right thing to do and a best practice in addressing pay inequity for low-income earners.