GUEST COLUMN: Re-framing minimum wage

It would be a step in the right direction toward solving homeless problem

We normally think of subsidized housing as an extension of charity.  That is, if people are too poor to afford housing, well, it’s our Christian duty to help them out whether they work or not.  I want to argue here that subsidized or social housing is a subsidy to business as much as it is way of helping the poor.

Think of it this way.  If all employers had to pay their employees a living wage, which I figure for the Comox Valley to be between $18 and $20 an hour, there would be no need for subsidized housing except for people who are incapable of working because of a disability, old age or for some other reason.  If a person makes $18 per hour for a 40-hour week, they make $720 a week or $37,440 for 52 weeks.  At that rate, they could afford rent or a mortgage (at 30% of their gross income) of $936 per month.  Now that seems reasonable enough.  For a family of four with both parents making a living wage, their yearly income would be close to $75,000.

However, we know that most people in the Valley make nowhere near a living wage. In 2010, according to Stats Can, there were around 6,800 households making between $20,000 and $40,000 a year and another close to 4,000 making less than $20,000 per year after taxes.  That’s close to 40% of households in the Valley.  Add the 4,500 or so households who make between $40,000 and $60,000 and now you have 55% of valley households making under $60,000 a year. At the same time, about 6,500 households made over $100,000 a year on average after taxes.  Most of those households are in Comox. They can’t be expected to sustain the Valley economy by themselves.  A vibrant Valley economy needs more people making a living wage or close to it.

For a number of years now in Canada, provincial governments have set a minimum wage.  In BC, that’s $10.25 per hour. If you make minimum wage, your yearly before tax income is $21,320, assuming a 40-hour week for 52 weeks.  This means that you could afford a rent of about $533 per month.  If both spouses in a household make minimum wage, their gross income is around $40,000 per year if they work a 40-hour week, which they probably don’t.

So, to get to my point, in order to allow businesses to pay minimum wage requires government housing subsidies or people end up paying over 50% of their gross incomes on housing, a not uncommon scenario in the Valley which means they have very little money to buy other things, which explains all the empty stores in downtown Courtenay.

It used to be that people making minimum wage were kids living with their parents, trying to pick up a few extra bucks with a part-time job.  I don’t know this for certain, but I strongly suspect that more and more, minimum wage jobs are being held by regular people just trying to make it through the day and not by marginal populations like high school kids.  Whatever, the case is that housing subsidies are necessary partly because of the low wages businesses pay their workers.  I don’t blame businesses for this, but I do get riled up a little when people don’t recognize that we all pay in one way or another with our taxes so that businesses can survive and pay minimum wages to their employees.  We need to recognize social housing as an investment in our community, not as charity.

Roger Albert is the vice-president of the Comox Valley Social Planning Society and Faculty Emeritus at North Island College. He is a guest columnist for the Comox Valley Record, addressing social issues within the community. His blog, dedicated to the issue, is rogeralbert.org

 

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