Making a Living: The Benefits of a Livable Wage for Workers and BusinessesMar 2, 2023
Over the past year, consumer inflation has steadily increased due to challenges to the supply chain, political issues and increasing consumer demand in some areas. Though inflation is starting to decelerate, workers are still experiencing high costs across all major areas including housing, food and transportation. This is compounded by wages that have not kept up with the rising costs. In Ontario, minimum wage is $15.50, which is only $2,687 per month or $32,240 per year.
In recent years, there has been a growing movement calling for the implementation of a living wage. A living wage is not the same as the minimum wage. The living wage reflects what people need to earn to cover the actual costs of living in their community, and draws on community-specific data to determine the expenses. In GTA/Toronto, a living wage is $23.15 and in Ottawa it is $19.60. There are numerous benefits for both workers and businesses who implement a living wage including:
Improved Employee Retention
When workers are paid a fair wage, they are more likely to be satisfied with their jobs and less likely to seek employment elsewhere. This means a business can reduce the costs associated with employee turnover, such as recruitment, training and lost productivity.
Another benefit of paying a living wage is that it can lead to increased productivity. When workers are paid a fair wage, they are more likely to be motivated and engaged in their work. This can lead to higher levels of productivity, as workers are more likely to take pride in their work and go above and beyond to deliver quality service.
Improved Customer Satisfaction
When workers are paid a living wage, they are more likely to be happy and satisfied with their jobs. This can lead to improved customer satisfaction, as workers are more likely to provide excellent customer service and go the extra mile to ensure that customers are satisfied with their experience.
Better Workplace Culture & Employee Morale
Many employees who work at positions that pay the lowest are more likely to be women, newcomers and marginalized groups in our communities. To make ends meet, they often have to work longer hours or take on second jobs. This can be physically and mentally exhausting.
Though there are many benefits to paying living wage, there are also some challenges:
Increased Labor Costs
One of the main concerns about paying a living wage is that it can lead to increased labor costs for businesses. This can be especially challenging for small businesses, which may not have the financial resources to absorb these additional costs.
Potential for Increased Prices
In order to offset the increased labor costs associated with paying a living wage, many businesses may need to raise their prices in order to remain viable. This could potentially lead to decreased demand, as customers may be unwilling or unable to pay the higher prices.
Demand for higher skilled workforce
With the increase in labor costs that would come from offering a living wage, many businesses will demand more experienced workers to justify the increased costs. This could make it more challenging for those new to the workforce and/ or with little experience to get a job.
While there are certainly challenges associated with paying a living wage in particular those in industries with smaller margins like hospitality, the benefits are numerous. By improving employee retention, increasing productivity, and improving customer satisfaction, paying a living wage can ultimately lead to a more successful and sustainable business in the long run.
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