The province’s Fair Wages Commission was in Victoria last week asking for views on how best to increase the minimum wage to $15 an hour.
Increasing the minimum wage is a means of making life more affordable for those unable to get a higher-paying job.
It doesn’t really address the problem we have in Greater Victoria.
We have as close to full employment as we are ever likely to see. Our unemployment rate is the lowest in the country at 3.3 per cent.
In October, the Greater Victoria Chamber of Commerce hosted a roundtable discussion among 30 of Victoria’s largest employers and they unanimously said finding and keeping employees is their biggest problem. These employers are not paying minimum wage.
Greater Victoria is one of the most desirable places to live in Canada, so why aren’t we attracting more workers?
We don’t have a shortage of jobs — we have a shortage of everything else it takes to function in the workforce.
First, there’s the high cost and unavailability of housing. I’m not even going to talk about home ownership in a discussion about the minimum wage, except to say that when you can’t afford to buy, you rent.
Our vacancy rate is at .07 per cent according to the Canada Mortgage and Housing Corp. If you can find a place to rent, the average rent for a two-bedroom is almost $1,300 a month. Anecdotally, it’s more like $1,650 for a place you’d want to live in. But we’ll go with $1,300. That’s $15,600 a year.
Second, there’s the high cost and unavailability of child care. The average price in Victoria for full-time licensed care is $970 a month. That’s if you can find it. We have one licensed child care space for every eight infants and toddlers. And our population of children under 11 grew by nine per cent from 2011 to 2016. But let’s say we can find child care, that’s $11,600 a year.
The third issue is the high cost and unavailability of transportation options. We need enough public transit that it’s a viable alternative to the car. That means it comes frequently and it gets to your destination quickly and it’s cheap. Otherwise, you need a car, and that costs between $8,000 and $9,000 a year. That doesn’t include parking, if you can find it.
So the total cost for the average rent, child care and car for one year is $35,200. And a few essentials are still missing — such as food.
Full-time work at $15 per hour is about $31,000 a year, before taxes.
Another note about wages. In B.C., they’ve been rising at or above the cost of living: 2.5 per cent in 2017 and 2.2 per cent in 2016, according to the Conference Board of Canada. That’s higher than the Consumer Price Index at two per cent.
So employers are keeping up with inflation, but they can’t overcome the lack of availability and affordability of these other key factors that make it possible to work.
So, yes. The minimum wage should be increased at a pace that does not cause financial trauma to employers who pay minimum wage. The more predictable and gradual the increase, the better.
But to help the majority of employers and workers, here are some additional things that the province could do to help:
1. Figure out a way to help the University of Victoria build student housing. The province restricts the university’s ability to borrow to build housing. The university estimates that students occupy at least 10,000 rental units off-campus. Ten thousand new units on campus would free up a lot of low-rent housing.
2. The government promised $10-a-day child care. That would have a huge transformative effect for the better on licensed child care. It would drop the average cost per child from $11,600 to less than $3,000 a year.
3. The mayors in the region have asked for two cents a litre of gas tax from the province to expand bus service. And we need bus lanes to and from the West Shore so the bus can get through traffic faster than the car. That’s a start to making the bus a real option. A year’s worth of bus passes is about $1,000.
If the province did those three things, it would make Victoria a more viable place for all workers and employers. And, as an added benefit, it would move a $15 minimum wage closer to a living wage.
Catherine Holt is CEO of the Greater Victoria Chamber of Commerce.
