Employment Precarity in Ontario and the Living Wage

Cayla Baarda

This past October, labour union Unifor hosted a ‘Good Jobs Summit’ in Toronto highlighting the need to develop practical public policy responses to the ongoing problem of creating good jobs. A few weeks later, on November 16, the Stronger Workplaces for a Stronger Economy Act (or Bill 18) passed third reading in the Ontario legislature. The Act was designed to support Ontario’s Poverty Reduction Strategy, and to increase protections for vulnerable workers. Yet despite proposing a number of corrective measures, concerns regarding part-time employment and precarious employment continue to be at the forefront of the labour policy debate.

Precarious employment is defined as employment with limited working hours and low hourly pay. The standard model of employment — based on full-time work with good wages and benefits — is simply not the reality for a growing number of Canadians. It has been estimated that precarious employment in the Hamilton-GTA region alone has increased by nearly 50 per cent over the last 20 years; and across Canada, roughly eight per cent of net job creation in the past year has been comprised of part-time work. Although Ontario may have seen job creation in recent years, policy-makers should be more concerned with the quality rather than the quantity of these jobs.

This new reality of work has daunting implications for household well-being. Precarious or vulnerable workers – which includes those employed part-time – are more likely to experience low rates of unionization, and therefore to have no access to benefits (including any form of retirement pension plan). Families facing employment precarity have difficulty with long-term planning and saving, therefore harming their economic prospects in old-age. Unpredictable hours can also impact a family’s ability to plan for childcare or to participate in community activities.

As a core component of its objective (to protect vulnerable workers and ensure a fair minimum wage), Bill 18 commits the province of Ontario to tie future increases of the minimum wage to the Consumer Price Index (CPI).  Tying the wage to the CPI – which measures the change in consumer prices over time — ensures that wage increases are predictable and consistent with the cost of living. Annual reviews of the minimum wages are set to be conducted in April of each year, in conjunction with assessments of the CPI, and any adjustments will be implemented by October. While this represents an important step towards improving working conditions for those in precarious, low-wage, or part-time work, concerns have emerged that it simply isn’t enough to truly help Ontarians.

Part of the argument for further reforms has come from an increasing push for the province to adopt a policy of “living wages.” A living wage considers what level of pay families need to be able to afford basic necessities and maintain an adequate standard of living. In 2011, the Social Planning and Research Council of Hamilton calculated a living wage for Hamilton of $14.95 per hour. This calculation includes food, rent, clothing, transportation, and child-care. Unlike the minimum wage, which serves as more of a corporate low-cost method, living wages are based on a household’s actual expenses.

The City of New Westminster, British Columbia, became the first municipality in Canada to officially pass a living wage policy in 2010 (although it has only been applied to municipal employees). Vancouver’s largest credit union, Vancity Credit Union, has also committed to paying its employees a living wage. Proponents of this policy have contended that, not only is it better business practice, but it also leads to more money circulating in the local economy – and as a result, more active communities.

South of the border, numerous cities across the United States have also gone ahead with implementing living wage policies. In October 2014, the same month in which the province of Ontario passed Bill 18, New York City Mayor Bill De Blasio emphasized the importance of living wages and of expanding the Fair Wages for New Yorkers Act. The Act, established in 2012, requires that employees of government-subsidized development projects are to be paid no less than a living wage. By increasing the living wage in 2015, De Blasio has contended that New York is “raising the floor for working families struggling to get by.” The U.S. now has over 150 municipalities which have passed living wage ordinances.

Given that wage policy generally falls under the jurisdiction of provincial governments, the adoption of living wages on a larger scale in Canada would prove challenging. In Ontario, wages are defined under the Employment Standards Act and are the responsibility of the Ministry of Labour. Municipalities would need to work individually with the provincial government to determine local costs of living, and ultimately to present the case that their workers require adequate pay both to live and to stimulate local economies. One way to do this could be through the Minimum Wage Advisory Panel, which gives a diverse group of business and labour representatives the chance to offer advice to the government on minimum wage policy.

Despite any and all potential complications, the momentum for this type of wage is likely to continue to increase, especially given that various municipalities — from New York to New Westminster — have already successfully begun to implement living wage policies. Vancity Credit Union has dubbed living wages “one of the best local economic development strategies we can employ.” Living wage policy may indeed present just the unique solution Ontario’s politicians and policy-makers are seeking to what is the worsening problem of employment precarity,

Cayla Baarda is a 2016 Master of Public Policy candidate at the School of Public Policy and Governance, University of Toronto. She holds a Bachelors degree in International Development from Guelph University with a specialization in Political Economy and Administrative Change. Cayla recently worked as a researcher with a social start-up in Copenhagen, Denmark. Her main areas of policy interest include education policy and foreign policy.

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