Red Deer's 'living wage' outpacing province's minimum wage: Report

By Sheldon Spackman
December 5, 2018 - 5:23pm

An update on Red Deer’s living wage shows the province’s minimum wage falls below attaining a ‘decent standard of living’ in our city. 

According to the City of Red Deer’s 2018 Living Wage Update, a family of four with two parents each requires a wage of $17.74 / hour to meet the family’s basic needs -- higher than Alberta’s current minimum wage of $15 / hour. 

City of Red Deer Social Planning Manager Tricia Hercina says the report is an educational tool to create awareness around poverty prevention and assist the community in understanding what it actually costs to have a decent lifestyle in Red Deer. 

“There were three different scenarios they looked at,” explains Hercina. “They did a family of four with both parents, they did a lone parent with one child and they did a single adult. The impacts that contribute to that number are things like our rental markets and affordable housing options and the cost of food and childcare.” 

Hercina points-out Red Deer’s living wage of $17.74 / hr for a two-parent family of four is higher than in some Alberta communities but lower than others. 

“The relevance and importance is about having people understand what that number needs to be and doing their best to support that in our community,” says Hercina. “So the lone parent living wage is $17.44 / hr and the single adult living with a roommate is $15.11 / hr. The living wage provides the opportunity for individuals and families to live above the poverty line without government support programs.”

Hercina says families that don’t earn a living wage are at risk of poverty impacts. 

“Those things can include food insecurity, social exclusion because they can’t participate and compromised mental and physical health, as well as decreased education attainment,” states Hercina. “It makes it difficult to break those cycles of poverty if we can’t get folks to that living wage rate. The poverty cycle typically starts with families or individuals experiencing lower income than their expenses and so a family can quickly fall into challenges in securing food and housing instability.” 

She says all those things can impact health outcomes and even the potential development of children. 

“So it’s important we’re working with individuals and families in our communities to establish that living wage and working at preventing the poverty cycle from even occurring,” adds Hercina. “I think it’s a reality that we live in in our community and the dependencies on other government supplements and other programs that then kick-in is an on-going conversation. So as long as that minimum wage is below the living wage, we will continue to see the need for additional support programs and services.” 

According to the 2018 Living Wage Update commissioned by the City of Red Deer and authored by M. Haener Consulting Services, a living wage provides many benefits for individuals and families, the community as a whole and employers and businesses. 

For individuals and families, benefits of a living wage identified in the report include fewer people living in poverty, fair compensation, improved health and a better quality of life.

For the community, an enhanced understanding of local living costs, increased civic participation and increased spending in the local economy.

For employers and businesses, benefits of a living wage include improved labour productivity, decreased employee turnover, reduced absenteeism and improved customer loyalty. 

Guided by the Canadian Living Wage Framework, the report concludes Red Deer’s 2018 living wage is substantially higher than in 2016, with the ‘couple’ family experiencing the largest proportional increase at 28 per cent. A change to the assumption regarding the Paid Hours Worked per week (35 hrs in 2018, compared to 40 hrs in 2014 and 2016) contributed to the increase in the estimated living wage rates. 

Changes in annual expenses and government transfers were also cited as factoring into the change in the living wage required for Red Deer. 

To elaborate, the report notes both ‘couple’ families and single parent families saw declines in government transfers in 2018 compared to 2016. 

Despite those declines, in 2018, government transfers represented 21 per cent and 48 per cent total disposable income for the ‘couple’ family and single parent family respectively. 

To view the full report, click here.


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