NDP’s living wage is a dead-end for workers

It was a positive sign that on Labour Day the NDP came out in support of an immediate $15 minimum wage for federally-regulated workers. However, this one step forward was followed by another step backwards. The NDP’s Labour Day statement also tied further increases to the minimum wage to the concept of a “living wage”, saying they will raise the federal minimum wage to a living wage by the end of their first mandate. This only sows confusion in the fight to raising wages and workplace standards.

Most workers use the rhetoric of a living wage as a way of describing a “fair” wage compensation in relation to their living standards. Used in this more general sense, the rhetoric of a living wage is understandable. But the actual concrete policy and strategy of advocating for living wages adopted by some of the labour leadership and the NDP brain trust is a huge problem for workers.

Tying wages to social spending

For policy wonks and academics, the living wage is a calculation of the wage workers would have to make to cover their basic needs. The modern living wage movement can be traced back to the efforts of trade unionists and anti-poverty activists in the 1990s to pressure cities in the United States to adopt living wage policies for municipal workers and contractors. While initially successful in cities like Baltimore, Boston, and Milwaukee, the movement failed to achieve major gains. Legislation passed at the municipal and state level only ever covered a small amount of public sector workers. By the mid 2000s the campaign and the labour movement’s involvement fizzled. In Canada, Living Wage Canada and its local groups are the main force pushing this policy.   

At its core the living wage is an academic exercise, where academics dream up model families and workers and then calculate their cost of living in a given region. It is a very top down and arbitrary way of setting a wage, which does not involve or even consult workers. 

Living wage calculations tie wages to social spending. This is a problem. If workers win an increase in social spending, such as reducing fares for public transportation, pharmacare or dental care, those wins are factored into the living wage. This means the living wage would actually be lowered every time workers win some social spending improvement. This is exactly what happened when Trudeau’s child tax credit was introduced, and the Living Wage movement actually viewed this reduction of the living wage as a win for workers! This begs the question, how can workers get ahead wages and spending on social programs are pitted against each other?

Dividing workers

The living wage is calculated by region (often municipal). Instead of raising a common floor of wages for all, the strategy of a living wage actually works to create more divisions amongst workers. For instance, under a living wage policy, airport workers in Hamilton, Ottawa and Toronto could all earn different wages for doing the same job, even though they could work for the same company doing the exact same job. Maybe you think, “well that is fair because of the cost of living is different.” But what if someone works at Pearson airport and lives in Hamilton?  What should define their living wage: their place of residence or place of work? If it is the former would workers at Pearson doing the same job who live in Hamilton, Barrie and Toronto all make different wages?

The entire history of the labour movement has been about fighting to get rid of wage differentials based on gender (the first minimum wage in Ontario was based on gender), race, age, status and geography. These divisions weaken the collective power of workers. Lower standards anywhere are a threat workplace standards everywhere.

We should be fighting for a uniform wage floor and getting rid of exemptions, because this increases the power of all workers to raise the floor.

Capitalism loves wage differentials. It gives the bosses an opening to pit workers against each other and undermine solidarity. Wages based on a regional standard of life calculation also opens the door for employers to pursue regional differentials for other employment standards. Imagine workers in Toronto getting five sick days, as opposed to three sick days for workers in Kingston. This is absurd, but this is the logic of tying workplace standards to the regional cost of living.

Unintended consequences

It is surprising to see some in the labour movement supporting a strategy of a living wage. The language of a living wage for unionized workers is dangerous. Using a rhetoric that defines X amount of wages as a living wage could all too easily be thrown back in the faces of unionized workers at the bargaining table. For example, the living wage in Toronto is $21.75. Now imagine workers at a union making $23 demanding $25 from their employer. Employers would easily flip the script on workers at the bargaining table and the wider public: “What are you complaining about? You have a living wage already!” Rather than help raise wages, the living wage calculation for the labour movement can very well set up an artificial wage ceiling.

This is especially dangerous for the many regions across Canada that have a living wage calculation that is below or just above $15. Is the NDP saying those workers don’t deserve a wage increase over the next four years? Their living wage position effectively argues they don’t. And what happens if the NDP wins and spends more on social programs, like pharmacare, that will lower the living wage calculation?

The NDP announcement about the living wage is confusing at best and nonsensical at worst. How can they enforce a living wage as a minimum wage for federally-regulated workers, when the living wage is calculated regionally? The most likely outcome is a national living wage calculation, which would in effect dispense with the whole academic exercise of a living wage. This will lower expectations. For instance, in Toronto news stories ran with NDP promising a $21 living wage by 2023 — which is not actually its policy. What happens when this fails to materialize?

Top-down policy vs. bottom-up movement

The living wage movement in Canada movement is very cozy with employers. It has a theory of social change that aims to morally convince employers to sign onto a pledge to pay workers a living wage. There is no oversight or enforcement. There is no involvement of workers. Empowering workers is not part of Living Wage Canada’s program. 

The NDP’s strategic minds, and some in labour leadership, chose to ignore the Fight for $15 and Fairness movement on the ground and back a living wage policy. The living wage policy will disorient, disarm and confuse the movement to fight for stronger workplace standards.

If the NDP had come out for a hard $20 minimum wage by 2023 for all federally-regulated workers, it could have been electric. It would have helped to push the movement further and wider. Having a concrete demand like $20, as opposed to a wishy-washy living wage, would have made it easier to unite workers in struggle.

By pursuing the half-baked policy of a living wage by 2023, the NDP has squandered a real opportunity to advance the fight for higher minimum wages across the country.