As the rate of inflation reaches levels not seen in Canada in almost 30 years, a growing number of businesses in Toronto are choosing to offer their employees a “living” wage 50% higher than the provincial minimum wage, a sum that reflects the particularly high cost of living in the Queen City.
Since 2017, 50 businesses have been certified by the Ontario Living Wage Network, which estimates that the average adult living in Toronto and working full time needs to be paid a minimum of $22.08 to support themselves. his basic needs. Nearly half of the companies that offer this wage to their employees — about $7 more than the provincial minimum wage — signed up for the Ontario Living Wage Network (OLWN) program in the past year.
Steve Waugh, co-owner of the Something in the Water microbrewery, obtained his certification on February 28. “We wanted to attract the best talent,” he says. Paying employees such a salary is not without financial consequences, he concedes, but the entrepreneur wants to ensure that his company projects values of fairness. The CEO of demolition company Demo for Your Reno, Punam Pathak, chose to obtain certification in November to recruit qualified people and improve the image of her industry, one of the last to professionalize, she says.
According to Craig Pickthorne, director of communications for the OLWN network, Canadian companies have valued their employees more since the start of the pandemic than before. Obtaining network certification allows companies to signal this new philosophy to the public, he explains. Entrepreneurs can use the network logo on their website for a fee of $50 to $1,000, depending on the size of their business.
This image is even more important because of the shortage of labor in the country. The Business Development Bank of Canada estimates that 55% of entrepreneurs have difficulty recruiting the employees they need. “In the midst of a labor shortage, everyone has more difficulty recruiting. If you can distinguish yourself as an egalitarian employer, you will have a much better chance of attracting employees,” says economist Armine Yalnizyan.
Costly inflation
The minimum wage of $15 an hour currently offered in Ontario is not enough, thinks the economist, who is associated with the Atkinson Justice and Social Economy Foundation. “Who can live on this salary? she asks herself. The average Canadian hourly wage has not kept up with inflation over the past twenty-five years, mentions Armine Yalnizyan, based on Statistics Canada data. In February, consumer prices across the country rose 5.7% from the same time a year earlier, the largest increase since August 1991.
The living wage of $22.08 can meet this inflation, the economist believes, even if the inflationary trend will not be permanent. But some entrepreneurs who offer the living wage even feel that this amount may not be enough. “I think it’s tough living in Toronto on a living wage,” says Steve Waugh. “Living on minimum wage must be extremely difficult,” he continues, an opinion shared by Punam Pathak.
However, companies that offer living wages are a minority. Some companies have too thin profit margins and cannot afford to offer an hourly wage of $22.08, explains Armine Yalnizyan. For others, the decision to pay the living wage may be based simply on the values of the responsible person, the economist explains.
Amber Stafford, owner of garden design company Garden Party, says she wants to value her employees more than anything else. Earning the green badge from the OLWN network doesn’t matter as much to him as living wage benefits. “The important thing is to offer work to humans that allows them to have enough money to live,” notes the entrepreneur in her thirties. The Toronto native sometimes even offers more than the living wage to new employees, even if the candidate asks for less during the interview.
Annual phenomenon
Each year, the OLWN network reevaluates the living wage that certified companies will have to offer. They then have six months to apply it, otherwise they risk losing their certification, explains Craig Pickthorne. Entrepreneurs interviewed by The duty assure that they want to continue offering the living wage even if inflation means that it must go beyond $22.08 in November 2022. “It will be difficult [pour certaines entreprises] when the hourly rate is going to go up,” admits Mr. Pickthorne.
However, it is also possible that the rate will decrease next year, since childcare is one of the essential elements calculated by the network. In mid-March, during a visit to Ontario, Prime Minister Justin Trudeau announced that an agreement confirming the Ontario government’s adherence to the $10 child care program was “imminent”. Toronto parents pay an average of $1,685 per month (compared to $175 in Montreal) for child care, one of the highest amounts in the country, the Canadian Center for Policy Alternatives assessed in 2019.
Employers should want more such deals, Armine Yalnizyan thinks, since it cuts their expenses, as evidenced by lower living wages. “It would take a burden off them,” she said.
This story is supported by the Local Journalism Initiative, funded by the Government of Canada.