A living wage is the hourly wage a worker needs to earn to cover their basic expenses and participate in their community.
A living wage is not the same as the minimum wage, which is the legislated minimum all employers must pay and is set by the provincial government. The living wage sets a higher test and reflects what people need to earn to cover the actual costs of living in their community. The living wage draws on community-specific data to determine the expenses to a family with two working adults and two children. Living wage employers voluntarily decide to pay a living wage because it's the right thing to do.
Why is it necessary?
More and more people are working for low wages. They are facing impossible choices — buy food or heat the house, feed the children or pay the rent. The result can be spiraling debt, constant anxiety, and long-term health problems. In many cases it means that the adults in a family are working long hours, often at two or three jobs, just to pay for basic necessities.
How is the living wage calculated?
The living wage is calculated based on the needs of a family of four with two parents each working full-time, full-year. It would also support a family throughout the life cycle so that young adults are not discouraged from having children and older workers have some extra income as they age. Communities across Ontario use the National Living Wage Framework to calculate their local living wage rate. This framework was developed by the Canadian Centre for Policy Alternatives.
The calculation also takes into account taxes and government transfers.
Ontario living wage calculations are based on Canadian Centre for Policy Alternatives-Ontario methodology. The Canadian Centre for Policy Alternatives’ Ontario office has developed a methodology for calculating the living wage in Ontario communities. This handy guide offers a step-by-step description of each component that goes into paying a living wage.
About the Ontario Living Wage Network
We're championing and showcasing the growing wave of living wage initiatives in Ontario.
We are a network of employers, employees, NGOs, non-profits, researchers, and proponents of decent work standards for all Ontario workers.
Together, we're changing the conversation about what the minimum standard of pay for low-wage workers should be in the province.
The Ontario Living Wage Network is grateful for financial support from: