By: Guest Columnist Kelly Ryback
Winnipeg, February 28, 2024 - City council will vote on adopting a living wage for 632 city employees as outlined in a report at the next council meeting on Thursday. Additionally, the report recommends that contractors, subcontractors, and organizations that receive city funding would be required to pay a living wage.
The Executive Policy Committee (EPC) voted to recommend for the report to be received as information on February 13th. This means they are not recommending the implementation of the living wage.
The current ‘living wage’ is calculated at $19.21/hour. The Manitoba’s minimum wage is $15.30/hour. The report states there are 632 employees earning less than $19.21/hour.This motion, as admirable and altruistic as it appears and intends, is simply not feasible, not necessary, nor is it responsible.
A portion of the 632 employees are students and young adults living with their parent(s), retirees on a side job, or have a partner earning more than the living wage. The position for a living wage is not applicable to those employees. Many of the positions are seasonal and/or part-time.
Most of the 632 employees under the living wage will be paid above the living wage when they reach the second to fourth pay increment as listed in the CUPE 500 collective bargaining agreement (CBA) therefore the ‘under the living wage’ is short-lived. This leaves a small number of employees below the living wage amount.
A big question is ‘can the city legally mandate that contractors etc be required to pay their employees the living wage as a minimum?’. How would that requirement be audited? If doable and enforceable, the contractor would just add the additional costs onto the city. City costs go up, taxes go up.
The city will then be required to review the overall pay scales in the CBA as many employees currently compensated at and above the living wage of $19.21 will demand a pay increase. Keep in mind there are over ten thousand full-time equivalent city employees.
Let’s consider the potential cost to implement the living wage, assuming a $2/hour pay increase for all applicable employees and contract employees. We will assume employees work seven hours per day and 232 of the 632 affected employees are seasonal (employed five months of the year). The additional cost to the city would be $1,780,800.00 annually (plus annual increases).
Then we must factor in the employees demanding a proportionate increase above the living wage. If we conservatively set that amount at one thousand employees, then the additional wage cost would be $3.64 million at $2/hour per employee. Double the amount of grieving employees and the cost doubles to $7.28 million. That is equivalent to a one percent property tax increase.
We cannot forget about the contractor employees and organizations that receive city funding. For every one hundred affected employees, the additional cost would be $364,000.00 passed onto the city.
Overall, the proposal would increase city costs in excess of $10 MILLION annually plus additional pension contribution costs. The city is in a financial deficit, the reserves are depleted, taxes and service fees are increasing. There are immediate infrastructure, services, and emergency response priorities that need to be placed ahead of the living wage proposal.
The CBA also includes a total of $1.4 million in a wage adjustment fund to be added onto the wages of the lower paying jobs. Therefore, a partial increase is already included in the CBA.
City employees receive evening differentials of $1.30/hour when the majority duration of a shift is after 4:00 pm. Overtime is paid at 1.5 times the hourly wage for the first two hours and double time after two hours. A city employee is paid an additional $10 for lunch when overtime exceeds two hours. A shift worker gets a paid lunch. In addition, employees receive additional ‘Long Service Pay’ once they reach ten years of service.
City employees receive one of the most generous benefits and vacation packages in the province with many benefits unheard of in the corporate (and unionized) community. They receive fifteen sick days annually that can be carried over. For employees who started prior to February 8th, 1995, 25% of their unused sick days are paid out in a severance package when they retire. Upon retirement, all employees receive additional severance pay based on the total years of service. It is not uncommon for long-term employees to receive over three months of severance pay for leaving their employment voluntarily.
FYI, there are over 4,200 city employees receiving annual compensation in excess of $75,000.00.
Wage increases are generally obtained through a time-served scale, promotion, collective bargaining, and job re-classification. These means should be considered instead of passing a motion through city hall. There are folks who have second jobs and side hustles in order to make more money.
The need for a living wage discussion is valid but just not at the municipal level. The living wage is NOT in the city’s lane. The provincial and federal governments hold that jurisdiction. All levels of government need to reduce waste and improve performance in order to lower the cost of maintaining a household. Tax rates and service fees need to be lowered so that the living wage amount can remain low and be affordable to the taxpayer.