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How the living wage policy could impact post-secondary students in BC

July 20, 2015

“Vancouver has one of the strongest economies of any city in Canada, but too many families are struggling to make ends meet”, Mayor Gregor Robertson stated last month on why a living wage policy will be crucial for many of those working for the city. Just a few days later on July 8th, Vancouver City Council officially passed a motion to make the City of Vancouver a living wage employer

When the plan goes through, staff members and contractors working for the city will be paid at least $20.68 per hour, the current living wage rate for Metro Vancouver. According to The Living Wage for Families Campaign, the living wage is the hourly rate that a family needs to cover the cost of basic living expenses, such as food, shelter, clothing, and transportation, in a specific region.

While this campaign mostly caters to low-income families, I couldn’t help but think about what a living wage policy could do for post-secondary students (especially if more employers adopted it) who have also been struggling to make ends meet since the past few years.

In 2013, Business in Vancouver reported on BC having a significantly high cost of education while students’ wages are going down with respect to inflation rates in the province. The result? Students are working more hours and multiple part-time jobs to fund their education, which not only adds to their stress levels but also takes away a significant portion of their study and personal time. Additionally, we have all heard of recent graduates in BC finding it difficult to secure a job in their field of study and being forced to work minimum wage jobs. Those whom are lucky enough to find employment soon after graduating still have to contend with salaries that run on the low side. 

High student debt levels in BC

Source: 2013 BMO Student Survey. As per Business Vancouver, the high cost of education in BC is not necessarily a result of higher tuition fees (which are higher in some other provinces) but due to other factors including the high cost of living in the lower mainland and low wages.

Citing a 2013 CIBC World Markets report, The Globe and Mail reported that almost half of recent graduates in Canada are paid less than the national median income, which amounts to earning under $30,000 annually or around $16 per hour. In my own months of job searching in BC, I have come across few entry-level jobs for arts graduates that pay close to the living wage amount. Likewise, there have been a series of media reports recently on new graduates being worried about repaying their student loans because of having low-income jobs or being unable to find full-time employment in BC and various other parts of Canada. Mounting living costs in the lower mainland clearly do not help either. A focus on reducing student tuition fees and unemployment among new graduates is crucial but a living wage could certainly help in stemming some of the financial issues faced by students and graduates. 

Photo Credit: OFL Communications Department

However, there have also been a few reports lately on the negative impact of the living wage that merit a discussion. For instance, paying a living wage will increase costs for employers who may respond by cutting jobs or hours and therefore cramp an already restricted job market for new graduates. However, it is hard to say if that will truly be the case. A study by the Economic Policy Institute on the economic impact of living wage showed that various American cities paying a living wage have seen little to no reduction in employment opportunities. It also found little impact on municipal budgets after the introduction of the new wage policy, which reduces the possibility of job losses.

It is difficult to predict what the ultimate result of the living wage would be in Vancouver, especially since New Westminster is the only other Canadian city that pays a living wage and there is little data on its impact. However, the financial challenges that post-secondary students and graduates in BC are facing these days indicate that a discussion on how we can make living and studying in the province more financially feasible is more necessary than ever.  

Harleen Khangura is a volunteer with the Communications team at SFU Public Square and a recent graduate of Simon Fraser University.  

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