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Minimum wage increase vs living wages. What’s the difference?

We all need to survive in this game of life and to survive we need necessities such as food, shelter and water. For all these things we need money and for us to get money we work. When we work we are paid a wage for that work done.

What we are facing now is run away skyrocketing living costs causing unaffordable living and poverty across the lower and middle class in Canada. Sometimes we get a wage increase at work because we are doing well or your company offers a wage increase braket based on performance. But this doesn’t always work too well especially when the cost of living spikes all of a sudden and then continues to gradually going up.

We are hearing the phrase “Minimum wage increase” and we need “living wages” being thrown around a lot these days, but what does it all mean?

many people use these terma interchangeably when in fact they are 2 completely different things.

Minimum Wage:

A minimum wage is just what the government puts in place as the minimum amount a business needs to pay an employee. This is the current government policy and the one the government seems to be sticking with.

Living Wage

With a living wage the amount can differ region to region and be more flexible for businesses that operate nationally. The way a living wage works is each region is surveyed based on the cost to by products and services when living in each region.

Now which is better you might be wondering.

Minimum Wage we are guaranteed to be paid not less than what the government has instructed the business to pay us. Sounds great, on paper. The problem with this model is the minimum wage can remain the same for decades while inflation keeps going up we get in to unaffordable living. Everything costs more and we get thrown in to poverty. When the government pushes a minimum wage increase only the minimum wage workers get that increase and doesn’t mean it’s enough for everyone depending where they live. In Canada there are many people making more than minimum wage all the way up in to the beginning bracket of the middle class that is living in poverty. If middle class workers are also living in poverty; how much help is that really going to do boosting the minimum wage to something that is still in the lower class bracket. Poverty is poverty and Canadas middle class is now poverty. This is why the minimum wage policy is a failure, because it doesn’t mean you will have a living wage

Living wage is more dynamic and flexible with the cost of living. With a living wage policy everyone is guaranteed exactly that, a living wage and not fall in to poverty because the wages always adjust to match the living costs by region of where the workers live. Simple as that.

If you want to know what the government parties are promising to help fix the issue of living costs check out our blog post here. Minimum wage increase and Canadas election 2021

Below is a side by side view of Minimum wage vs Living wage.

Living wageMinimum wage
Criteria
Calculations based on the cost of living by area. Food, housing, child care, location, health care, transportation, dental care and other necessitiesMinimum wages are also set and adjusted in different ways: in legislation or regulations; by the government-of-the-day or an independent board; and based on inflation, average wage rates or other economic factors
Regulation
There’s no established governing body for a living wage.It is governed by federal and provincial/ local governments
Inflation Adjustment
Accounts for various cost-of-living considerations that are already inflation adjustedIt’s not adjusted to compensate for the rising inflation
Amount
The compensation on a living wage varies from multiple factors such as marital status, number of children, location etcThe amount of a minimum wage is the same straight across the country no matter where you live and what the cost is to live there. The current Canadian minimum wage and the proposed $15/h are below the living wage in Canada.

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