A Living Wage for Toronto

August 28, 2014

There is a profound misconception among politicians and voters in this city and elsewhere, that spending money is a bad thing. Our current mayor, (and now two of his main competitors) uses most of his energy fighting every instance in which money might be involved, stating that it is better to keep every penny securely squirrelled away in the name of “keeping taxes low”, even if citizens wind up spending far more in other ways as a direct consequence. It makes me wonder what his Cadillac SUV runs on, since it would be much cheaper to not spend actual money on gas.

People in general see money as going in only one direction – out and away from them. They very often fail to connect the benefits that their dollars bring. They don’t want to pay the heating bill, but they enjoy having heat. They don’t like buying groceries, but they enjoy eating.

The fact is, money is largely circular. People make money and they spend money and because they spend money, demand for products and services increases, more jobs become available, and consequently more people have money to spend.

By contrast, when you are running on empty, with no money in your pocket, you have to make choices, such as pay for rent or pay for food; or skip buying medications. It’s hard to go out and look for work when you have no coins for bus fare, and no-one to watch the kids. When there is no money, the economy curls into a fetal position, unable to progress.

Miserly economics is not the same as prudent economics. Miserly economics is both foolish and fatal.

Recently the mayors of New York City and Chicago have been very public about the need to institute a living wage in their cities, and I feel the same should be done here in Toronto.  They feel, as do I, that the established minimum wage is unrealistic, unfair, and counterproductive. To pay basic rent and basic bills and put food on the table, a person in Toronto needs to make at last $16 per hour and minimum wage is nowhere close to that and this is even more inadequate for people with children.

I feel that the city should take a leadership position in mandating a living wage for businesses that wish to operate within city limits, especially those who wish to do business with the city in a vendor/supplier relationship.

A living wage is not a handout. It does not represent the creation of “cushy civil service jobs,” and it is not about padding the bill. By paying people a wage that allows them to properly live and work in this city – something the provincially-mandated minimum wage was supposed to do – all taxpayers benefit from reduced strain on the social system. Hard-working people are able to purchase the necessities of life, and in so doing they contribute to the economy. The money goes out and then it comes back.

According to the CMHC, housing is considered affordable when a household does not spend more than 30% of its gross income on housing costs (rent, mortgage, utilities). But in 2013 average market rent for a one-bedroom apartment in Toronto is $1,007/month. For this unit to be affordable, a household must be making at least $40,280/year or $19.37/hour (assuming a 40-hour work week, 52 weeks/year)

Furthermore, according to data from the National Household Survey, in 2011, 44% of renters and 28% of homeowners spent above the affordability threshold on housing costs. By this standard, someone making minimum wage in Ontario makes $22,880/year and could afford to spend $572/month on rent and utilities.

In Ontario, 1 in 5 renters spends more than 50% of their gross income on housing. These renters often make difficult decisions between paying rent and paying for food, clothing, medication, transit or other basic needs. Because renters tend to make lower incomes than homeowners, about 70% (Ontario wide) live in housing that’s too small, too expensive or in need of significant repair.

Toronto is a smart city. It is well-regarded around the world for a wide range of accomplishments. We are inviting the world to our doorstep next year with the Pan-Am games, yet there are more children living in poverty in this city today than there were when the fiscally illiterate Mr. Ford took office.

Enough with the grandstanding and empty words. The other candidates for mayor have given this topic only slippery lip service or have passed the buck back to the province. Not acceptable. This city can, and should fix its own wagon.

As such I am calling for an institution of the living wage here in the city of Toronto. We are a grown-up city. Let’s act like it.

##

Related posts