Living Wage Vancouver
Recently the topic of the living wage in Vancouver has been featured on several news outlets. Unfortunately, most segments discussing the living wage are often short and lacking details. We have decided to take the challenge and put together the living wage for a single individual residing in the City of Vancouver; arguably one of the most expensive cities to live in North America.
Before we begin, it is important to define the Living Wage, as it isn’t a common term.
The minimal hourly wage necessary to avoid indentured servitude. The living wage provides enough after tax income to afford an individual’s accommodations (rent not mortgage payments), enough groceries for three square meals per day, basic transportation, clothing necessary to look like a function member of society, personal security including telecommunications, and several miscellaneous expenses (i.e. bank charges, MSP premiums, toiletries, etc.).
On top of all the monthly expenses above, the living wage should allow the individual to be able to afford one night out per month. An individual who works a job who can only afford their bare necessities is considered a victim of indentured servitude. The living wage leaves no room in the budget for debt repayments, savings, or any major purchases.
We have to be realistic, most Canadians currently has consumer debt in one form or another. The living wage serves as a planning tool for those who earn well above the that hourly rate. Individuals can simply adjust their current livelihood (i.e. downsizing accommodations, reducing lifestyle costs, reducing monthly payments for services not be used, etc.) and then allocate their funds to pay off their debts. This will allow more flexibility to save up for short term & long term goals.
So how much is the Vancouver Living Wage?
Would you believe us if we told you that you would only need to earn $10.70 per hour full time? Unlike other articles and news segments, we decided to show our calculations, to ensure potential cynics have enough material before commencing a debate.
We were able to figure out the actual hourly rate by solving the monthly after tax budget and then figuring out the annual after tax income. Finally, we referred to the Federal and Provincial income tax tables to get the annual gross earnings, then we divided by 2,080 hours. We expect many individuals will challenge our budget; fortunately the figures above are there for you to review.
Considering that an individual could survive with the budget above, how much more would an individual need to afford a desirable lifestyle, pay off debts, and save for the future? Well it depends on the individual; therefore, we rolled up our sleeves and calculated the numbers for your convenience.
By balanced budget, we mean an individual could have a preferable budget allocation of 50% bare necessities, 30% lifestyle costs, and 20% for savings and securities (recommended allocation by industry professionals). The median income in Canada currently sits around the $23.84 wage presented in the table above. Also, there are new residential developments in East Vancouver starting at $200,000, which would allow an individual to become a homeowner in Vancouver. So it is possible to have it all in this city with very little.
An individual that allows for flexibility in their monthly budgets could find themselves with lucrative opportunities to live in a city that is deemed too expensive.
What do you think needs to be added or taken away from the Living Wage Budget?