Do you need a living wage or just watch your expenses?

In the province I live there is an organization called The Ontario Living Wage Network. It appears that their role is to shine a light on the benefits of paying a living wage.

Their Director of Programs and Services states that; “The living wage is the hourly wage that a worker needs to earn to cover not just their basic expenses (based on a 35-hour work week), but also have a little bit extra to participate in community. With that being said, it’s still a very modest wage because it doesn’t include savings for retirement or debt repayment. It’s meant to be a practical tool for employers to know they’re paying their workers a decent wage and a practical tool for reducing poverty through paid work.”

I believe the way to look at this is a two-way-street. First of all, I have all the compassion that I can muster for those who are not making ends meet financially. Secondly, I do have a concern over the attempt to force or embarrass employers to pay more to an employee for the reason that their wages are not meeting their daily expenses.

Let me give you some background. When I started my first business back in the late 70’s, I paid my employees first, and what was left over I got. And needless to say, the first 3 years were very difficult, and after having a young daughter, my spouse decided to go back to work to help us financially. We watched every nickel that we were paying out carefully. With this background, you can understand that being in business is not very easy in the first stages, and I would say that even though the business grew, it entailed hiring more staff. As we continued to grow, I decided to pay my staff in a very unique way. First of all, I decided what they were worth due to the work they were performing, and had a bonus system in place to bump up their income on the monthly basis. This had everything to do with their performance or execution of their responsibilities. The most interesting point for me in commenting about my attitude toward staffing was that as I was preparing this blog, I found the following on the BDC (Business Development Bank of Canada) website. It is called the ‘7 tips to set the right salary for your employees’. They are as follows;

1. Define your compensation strategy
2. Create good job descriptions
3. Benchmark
4. Establish a salary framework
5. Consider total rewards
6. Leverage your strengths
7. Revisit often

Keeping all this in mind, let’s look at The Ontario Living Wage Network statement that “a worker needs to earn to cover not just their basic expenses”. My questions are;

• What are the basic expenses this network speaks about?
• Are their basic expenses the same as the friend they have at work?

The reason I came up with these questions is that we all can control our expenses, but many times people don’t, then blame their employee for not paying them enough. Take for example the following expenses (for some) that were not basic expenses some time ago, and now they are;

• Buying Bottled Water in Places with Clean Tap Water
• Subscription Services to organizations like Bell/Rogers (phone services), Netflix, Spotify, and Amazon that keep increasing in price
• Service Fees on event tickets
• Designer logo merchandise that costs more than the quality justifies
• Weddings that cost as much as a house down payment
• High-End Coffee Drinks that cost as much as a meal
• Fancy Pet Accessories that are more expensive than human items
• Designer Baby Gear that out prices adult versions
• Upgrading to the latest Smartphone
• Delivery Fees that do not include tips
• Extended Warranties that rarely cover anything useful
• Paying for extra storage on your phone’s cloud service
• Designer Handbags that cost more than a month’s rent
• High-End Sneakers that are never meant to be worn
• Cars that come with a monthly subscription for features
• Fast Food Chains that now charge extra for dipping sauces
• Influencer-Branded Products that are just generic items with a markup
• Paying to unlock features in Video Games you already bought
• Furniture Stores charging separate delivery fees for each item

A question before I finish; don’t all of us need to be a lot stronger or more resilient in our spending habits?

To conclude I have a few quotations for you to ponder.

“He that is of the opinion money will do everything may well be suspected of doing everything for money.” – Benjamin Franklin

“When money is seen as a solution for every problem, money itself becomes the problem.” – Richard J. Needham