Soaring cost of living—especially for housing—causes living wages to increase across BC
The 2024 living wage for Metro Vancouver has risen to $27.05 per hour, a 5.3% increase from last year. This significant increase highlights the region’s deepening affordability crisis fuelled by sky-high housing costs.
Living wages are also going up across the province as our new report shows.
While inflation has eased from record highs, essential costs like rent and food continue to rise faster than general inflation.
Government initiatives such as increases to key income-tested government benefits, ongoing child care affordability improvements and the roll-out of the Canadian Dental Care Plan have provided some relief. The savings, however, have been entirely consumed by soaring prices—especially for housing and food—leaving many households struggling to make ends meet.
What is a living wage?
The living wage is the hourly rate that each of two parents working full-time must earn to support a family of four in Metro Vancouver. It ensures a family can afford necessities, support the healthy development of their children, escape severe financial stress and participate in the social, civic and cultural lives of their communities.
People who work for low wages face impossible choices—buy groceries or heat the house, keep up with bills or pay the rent on time. The result can be spiraling debt, constant anxiety and long-term health problems. In many cases it means working long hours, often at multiple jobs, just to pay for basic necessities. Parents end up having little time to spend with their family, much less to help their children with school work or participate in community activities and we are all poorer for it.
The living wage is a powerful tool to ensure paid work results in a decent standard of living and enables a life that is about more than a constant struggle to get by. For low-wage workers, earning a living wage is a game changer. It means freedom from constant financial stress and an opportunity to plan for the future.
Gap between living wage and minimum wage widens
A strikingly large gap exists between the 2024 Metro Vancouver living wage and BC’s current minimum wage of $17.40 per hour.
The Metro Vancouver living wage has always been higher than BC’s minimum wage, but the gap narrowed considerably between 2018 and 2021 thanks to policy changes such as substantial minimum wage increases, the elimination of Medical Services Plan (MSP) premiums, introduction of the BC Family Benefit and significant new federal and provincial child care investments.
However, since 2021, soaring costs of living—especially for housing—have outpaced these affordability improvements. The gap has widened again, leaving many families earning less than it takes to get by.
Recent increases to the minimum wage have been welcome, but clearly far from sufficient and more must be done urgently to better support the nearly half a million workers in Metro Vancouver who earn less than the living wage (37% of all paid employees in the region).
What about other family types?
While the Metro Vancouver living wage calculation is based on the needs of two-parent families with young children, it is also meant to support all workers so that young adults are not discouraged from having children because of low wages and older workers have extra income as they age. This was the case when the BC living wage methodology was originally developed in 2008.
However, as governments have taken important steps to better support families with children in the last eight years, questions have arisen about whether this wage is sufficient for other groups.
This year, we produced preliminary estimates of living wages for two additional family types: a single working-aged adult and a single parent with a young child. These preliminary estimates suggest that the living wage for Metro Vancouver may not be sufficient to support a single person (who would need a wage of $27.36) or a single parent ($30.63).
However, in other communities with a lower cost of living, the living wage may be sufficient for other family types. Over the next year, we will refine these calculations in consultation with community partners, academic and policy experts, low-wage workers, unions and living wage employers to ensure a more inclusive methodology.
Getting to a living wage for all BC workers
The living wage movement calls on employers to pay wages sufficient to support families. And a growing number of BC employers are stepping up. Over 450 employers, including many small businesses, 10 municipalities, three First Nation Councils and three school boards have committed to pay their employees and contractors a living wage. In 2022, YVR became Canada’s first living wage airport.
However, voluntary action alone cannot solve BC’s serious affordability crisis. Coordinated government efforts at all levels are needed to both lift wages and lower the cost pressures people face so that all workers can thrive.
As a start, the BC government should raise the minimum wage to $20 per hour to narrow the gap between the minimum wage and the living wage. This would benefit over 400,000 people of all ages, working in every region of the province.
In addition to higher minimum wages, BC workers need pay equity legislation, stronger protections from wage theft and other workplace rights violations and meaningful access to collective bargaining so they can exercise the right to come together to negotiate better wages and benefits if they so choose.
The provincial government should also establish a living wage policy for both its direct employees and contractors and encourage all public bodies to follow suit (e.g., universities, hospitals, school boards).
Affordability depends not only on our earnings, but also on the benefits and government income supports we receive and the public services we can access.
More-generous government transfers can put money directly into the pockets of low- and middle-income households, as provincial and federal child benefits do for families with children.
Government benefits could do more to moderate the increase in the living wage amid a sharply rising cost of living. Many benefits, however, are clawed back steeply or eliminated at family income levels close to the Metro Vancouver living wage ($85,000 to $100,000 per year), which is considered too high for government support, yet in reality can barely provide a decent standard of living in BC’s largest urban centre.
Provincial and the federal governments must review all low-income transfers and credits regularly to ensure they are not clawed back at income levels that leave many families struggling.
In addition to direct government transfers, accessible public services and infrastructure can reduce out-of-pocket costs for families and thus lower the wage needed to afford a decent standard of living. These include affordable housing, universal access to low-cost child care, free transit for youth 18 and under and an expansion of publicly funded pharmacare and mental health services.
Without urgent government action to address the affordability crisis, the living wage will continue to climb. This means many BC employers will be unable to pay their workers a living wage, leading to thousands trapped with low wages and earning less than it actually costs to live in our province.
A coordinated effort to raise wages, expand public services and adjust government supports is essential to ensuring all BC workers can thrive, not just survive.
Notes
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Topics: Economy, Employment & labour
