There are various definitions of what exactly a living wage means, but Public Interest Alberta defines a living wage as the income required to maintain a safe, healthy standard of living in a community.

Unlike a minimum wage, which sets an arbitrary limit beneath which hourly wages cannot fall, the living wage starts by asking what wage level is sufficient to allow workers to support their families and enable them to enjoy a safe and healthy life.

In response to this question, various communities have advocated for and implemented living wage initiatives in different ways.

The most common initiative is to pressure a municipal government to pass a living wage ordinance, which mandates that municipal and service contractor employees must receive a living wage. Some municipal living wage laws are applied broadly, covering every municipal employee and contractor as well as companies receiving economic development subsidies. In other cases, the living wage rules have exceptions - only applying to contracts of a certain size or excluding certain groups of workers, such as non-profit agencies.

Similar initiatives have been implemented in some communities at larger institutions, such as universities and airport authorities, which have passed policies requiring that anyone working for the institution or a contractor must be paid a living wage.

Other advocacy groups have run campaigns to raise the minimum wage, either provincially or federally, to a level that is a livable amount. In these cases, one of the commonly accepted government measures of poverty, such as the Low Income Cut-Off (LICO), is often used to set the wage. This conception of a living wage simply says that someone working full-time should earn enough not to be poor, and the minimum wage is set at or above the LICO.

The living wage takes into account that the amount needed to live decently varies from community to community. In a major urban centre, it may not be necessary to own a vehicle, but it may be the only option for someone living in a rural area or in a municipality without a comprehensive public transit system. Likewise, the cost of housing varies tremendously from Fort McMurray to Lethbridge.

A major difficulty with defining a living wage is that people have different ideas about what is necessary to have a decent standard of living. Does an individual or family need a car? Should a family be able to save money for their children’s education or for their own retirement?

Should a living wage include being able to afford recreation and culture, such as access to sports programs, the art gallery and movies?

Questions such as these are a critical first step in developing a common understanding of what we mean by a living wage.

Three Components of a Living Wage

Discussions of a living wage need to be viewed in relation to other elements in society. Whether an individual or family in any community is able to enjoy a decent standard of living can be conceptualized as having three components:

The labour market: How much money are people earning for their work?

Public goods and services: What access do people in the community
have to affordable housing, education, affordable quality childcare, health care,
public libraries and efficient public transit?

Income security: What supports, including pension plans, child tax benefits, unemployment insurance and supports for the severely handicapped are available to people in the community?

Clearly, what constitutes a living wage is tied to other public policy decisions made by all levels of government. For example, if wages are low in dollar terms but families have access to subsidized childcare and public and postsecondary education is sufficiently funded to keep tuition and user fees low, they may be better off than someone with higher wages who has to worry about paying for childcare and saving for their children’s education.

In Canada and Alberta, successive governments have made policy decisions which have moved away from concepts of collective responsibility and have shifted costs away from government and on to individuals and families. Cuts in social programs, increases in user fees and an under-funding of public goods and services have meant an increasing burden has been put on families to pay for more.

At the same time, minimum wages have not kept pace with the increasing cost of living in Alberta, meaning stretched budgets for some and deep and persistent poverty for others.

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