Problem: The minimum wage does not reflect the cost of living in Canada. Not Even Close!
Typically, it is the retail employee, childcare worker, wait staff in restuarants, most service related jobs, who receive a whopping 10.25 hour as a minimum wage, with meager increases over periods of time (ie. after one year.50/hour) but these increases only add up to $20/week, based on a full time 40 hour work week, or more likely $10/wk, as most retailer employers/owners only want part-time workers so they do not have to pay benefits, holiday pay or sick leave.
‘..After covering housing, transportation and food most will not be able to sustain a reasonable standard of living. They are among the thousands of working poor in Canada.’ http://www.frugalcanadianliving.com/2008/06/minimum-wage-in-canada.html
Would you trade places with one of the slaves slugging away at your local Tim Horton’s, MacDonald’s, Foodland? If you are one of the lucky, living comfortably, the answer is NO you would not trade places.
So, let’s look at this problem within it’s simplicity, using the fact/truth that numbers can provide:
SENARIO 1 : 2 full time minimum wage earners, with one child
Income : 10.25 x 40 = $410/wk x 52 weeks = $21,320 x 2 = $ 42,640
Expenses/Cost of living:
personal income tax @ approx. 10% $ 4,264
rent 2 bedroom apartment: $1395 x 12 = $16,800
food: for 2 adults and one child: 100/week 400/mo x 12 = $4800
childcare: for 1 child 650/mo x 12= $7800
misc: home repairs/toiletries $30/wk x 52=$1560
transportation: ttc pass for one adult = $130 x 2 = 260 x 12= $3120
Utilities and phone/cable approximately 250/mo x 12=$3000
emergency/contingency fund: (approx 2 months rent) so put aside $250/mo=$3000
dental/medical (perscription drugs) $150/mo x 12= $1800
CLOTHING 200/mo x 12= $2400
misc: gifts/movie/restaurant-dinner out/order in pizza $50/wk x 52= $1820
This minimum wage calculation does not cover: Credit card, loan, or other debt/interest payments, owning a home with additional fixed expenses, one example being property tax at approx. $300/mo, family pet expenses, lost wages: due to illness or to take care of family member, SAVINGS: Retirement OR saving to purchase a home , education: adult or children’s post-secondary education
The expenses above add up to: $53,364
The wages for the two working adults (full time): $ 42,640
You can see the system is designed to benefit the banks-forcing people to go into debt just to survive!
As the numbers point out, ten thousand dollar per year in the hole AT LEAST (as I did this example very conservatively) so one must resort to loans/credit just to get by. Thereby, adding another fixed payment onto the monthly budget to pay the interest (and small amount of principal) of this debt. Doesn’t take a genius to see how people get into financial trouble and fast! If you have a one child/dependent and you/your partner has a minimum wage job, beware. But, almost any scenario really, single, children, no children, if one is receiving the minimum wage, one is barely surviving, living pay cheque to pay cheque with no end in sight. This also has a cost, as existing with this kind of financial stress can be emotionally, physically, mentally draining and lead into all kinds of illness.
SENARIO 2 : 2 full time LIVING wage earners, with two children
IN THE NEXT EXAMPLE A LIVING WAGE IS USED/CONSIDERED-WITH IT BEING BASICALLY DOUBLE OF THE MINIMUM WAGE CANADIANS ARE RECEIVING NOW
The following explanation of a ‘Living Wage’ and the monthly expense budget (of an average Canadian family of 4) is from: ‘Working for a Living Wage: Making paid work Meet Basic Family Needs in Metro Vancouver: 2012 Update’ Please refer to the link below for more details.
” A LIVING WAGE IS:
Based on the principle that full-time work should provide families with a basic level of economic security, not keep them in poverty.
The amount needed for a family of four with two parents working full-time to pay for necessities, support the healthy development
of their children, escape financial stress and participate in their communities.
For Metro Vancouver, the living wage in 2012 is $19.14 (*proposed-not actual in Canada)
A Bare Bones Budget
At $19.14 per hour for Metro Vancouver
or $34,835 annually for each parent
here’s what a family could afford:
$759/month (based on estimates by the Dietitians of Canada for a nutritious diet).
CLOTHING AND FOOTWEAR:
$1,436/month (includes conservative rent estimate for a three-bedroom
apartment, utilities, telephone, and insurance on home contents).
$468/month (includes the cost of owning and operating a used
car as well as a two-zone bus pass for one of the parents, replaced by a discounted
student transit pass, the U-Pass, for eight months of the year).
$1,168/month (for a four year old in full-time care, a seven year old in
after-school care, and six weeks of summer care). Notably, child care is the second
most expensive item in the living wage family budget after shelter.
MEDICAL SERVICES PLAN (MSP) PREMIUMS:
NON-MSP HEALTH CARE:
$133/month (the cost of a basic extended health and dental
plan with Pacific Blue Cross Insurance; does not include expenses only partially
covered by the insurance plan).
$91/month (allows for two college courses per year).
$223/month (two week’s wages for each parent, which
provides some cushion for unexpected events like the serious illness of a family
member, transition time between jobs, etc.).
$699/month (covers personal care, furniture, household supplies, school
supplies, some reading materials, minimal recreation and entertainment).
This living wage calculation does not cover:
Credit card, loan, or other debt/interest payments; Savings for retirement; Owning a home; Savings for children’s future education;
Anything beyond minimal recreation, entertainment, or holiday costs; Costs of caring for a disabled, seriously ill, or elderly family member; or
Much of a cushion for emergencies or tough times. “
The expenses above add up to: $5,288/month
The wages for the two working adults (full time) adds up to: $6,125/month
Note: these figure DO take into account money received from the government of Canada for child tax benefits and money paid to the federal/provincial governments for ie. income tax so are quite accurate but at the same time conservatively applied.
To continue with the implications of these 2 scenarios and the solution in tomorrow’s post
Check out the Bill of Rights @ the Equal Life
Foundation – a comprehensive approach to our Co-existence to ensure the Right to Life, Freedom and Dignity for All. Check out the Living Income Guaranteed – with solutions
that can be established in this lifetime
the disaster of a profit driven system.
Check out the FREE Downloadables at EQAFE! Educational series with Insights
and Practical Support.