The view from upstream: A new living wage

Greg deGroot-Maggetti

A local company in Waterloo Region is part of a revolutionary movement to improve health – one French-press coffee maker at a time.

It’s not the health benefits of the coffee, nor that their coffee maker is the greenest on the market. It’s not even the fact that Grosche International uses profits from the sale of their products to build water filtration systems for households with no access to clean water in places like South Sudan.

The revolutionary impact comes from Grosche’s commitment to tackle one of Canada’s silent killers: poverty. And they have done this by raising the base pay of their workers to $16 an hour, the calculated living wage for Waterloo Region.

Poverty and inequality are two of the most powerful influences on health and life expectancy. So much so that doctors have started screening patients for poverty. Health Providers Against Poverty have recognized that one of the best prescriptions they can provide some of their poorest patients is more income—making sure those patients are getting all of the tax credits and income supports they are eligible to receive.

Paid work is intended as a pathway out of poverty, but Canada is suffering from low-pay syndrome.

A recent report from CIBC Economics states that job quality in Canada is at its lowest level since the bank started tracking it in the 1980s. And the chief cause has been the rise in lowpaying jobs.

When more and more jobs are low paying, it’s not just an economic problem, it becomes a health problem as well.

Noted epidemiologist Kate Picket of the Equality Trust in the United Kingdom has helped document the corrosive effects of income inequality.

The Equality Trust has found that reducing inequality is better for population health, community safety, and economic vitality, among other things.

Picket suggests that a living wage policy is one of the best things for reducing health inequalities.

Grosche is part of a growing movement among employers who are committed to paying all of their workers a living wage or better. This includes for-profit businesses, non-profits, and public employers. In Waterloo Region, the movement has been led by Living Wage Waterloo Region, which has calculated the local living wage and set up a program to publicly recognize employers that pay the living wage or better.

To become a recognized living wage employer requires a commitment to paying all of your direct and indirect employees at least the living wage. This includes all full-time and part-time employees as well as contracted services, like cleaning or security, that work 120 hours or more a year at your organization.

The living wage is not the same as the minimum wage. Minimum wage is a government-mandated minimum. It is politically set and is not based on what it costs to live in a particular area.

The living wage is based on the actual cost of living in specific communities. It is about more than sitting on the poverty line. It reflects a decent, albeit modest, standard of living that allows workers and their families to participate in the life of their community.

In Waterloo Region, the living wage rate is currently $16 an hour, much higher than the Provincial minimum wage, which sits at $11 an hour.

Living wage employer programs, like the one in Waterloo Region, are voluntary. They encourage all employers to pay their workers a living wage and recognize those that make that commitment.

The Living Wage Employer Program in Waterloo Region recognizes that achieving the goal to raise all employees to the living wage rate or above may take time. Interested employers can enter the program at different levels while they implement changes to raise all employees to the living wage rate or above.

For instance, employers are not required to re-open contracts for things like cleaning services.

But when those contracts come up for renewal, they are required to let prospective service providers know of their living wage commitment and seek providers who are willing to pay a living wage for their staff working on that contract, if not throughout the whole organization.

Paying employees a living wage or higher lets them know they are valued and reduces the stress of worrying if they will have enough money to pay the bills—two factors that can improve mental and, consequently, physical health. But the living wage also benefits employers: employees come to work ready to work, they are not distracted by living expenses or by looking for another job that pays better. Employers have found there is less absenteeism and staff turnover; therefore, they are saving money by not having to hire and train new employees. And the living wage is good for the broader community. People have more income to support local businesses. Parents have more time with their children because they do not have to work multiple jobs.

And their improved health reduces demands on the health care system. In Waterloo Region, there are 14 organizations already enrolled in the Living Wage Employer Program. They include businesses like Grosche in Cambridge, Zero Environmental, GCP Industrial, House of Friendship, Mennonite Central Committee Ontario, the Workforce Planning Board, the K-W Community Foundation, and Mennonite Savings and Credit Union—one of four Credit Unions across Canada that are recognized living wage employers.

The broader health impacts of the Living Wage movement, those associated with higher earnings at the lower end of the job market and improved income equality across society, become more evident as the number of living wage employers and employees grow.

In the United Kingdom, where the Living Wage Foundation has operated for more than seven years, they now have more than 1,400 employers enrolled. When their living wage rate is updated in November of each year, it means a pay raise for tens of thousands of employees.

In Ontario, the living wage program is relatively new. There are living wage employer programs in Hamilton, Waterloo Region and Windsor. Toronto recently released an updated living wage calculation ($18.52 an hour). DUCA Credit Union has already announced its commitment to raise the pay of all its workers to the Toronto living wage rate or above.

The growth of the living wage movement in Canada is helped by established programs like Living Wage for Families in B.C. and Living Wage Canada, which has created a

Canadian Living Wage Framework. The Canadian framework helps local communities do their own living wage calculation and also provides a consistent methodology so employers know that while the living wage rate may vary from community to community, the wage reflects actual differences in the cost of living.

Creating healthier communities is about more than increasing health care spending. Every dollar that employers pay to make sure their employees earn a decent living wage is a fundamental part of the equation.

Greg deGroot-Maggetti of Mennonite Central Committee Ontario is the Program Manager for Living Wage Waterloo Region.