The Ontario government has announced that the minimum wage will move to $11 on June 1. My colleague Sheila Block has drawn the links between the minimum wage, racialized workers and poor health. But what about the minimum wage and affordable housing?
The short answer: Even with the June boost, an employee working full-time for an entire year would still only earn about half the affordable housing wage – the amount of money required to live in a one-bedroom apartment in Toronto.
The average market rent for a one-bedroom apartment in the City of Toronto, according to the latest survey from Canada Mortgage and Housing Corporation, is $1,035. That number is not much different than the $1,028 in the Greater Toronto Area.
The federal government states, and most housing experts agree, that the threshold for affordable housing is 30 percent of income. That puts the affordable housing wage for Toronto – the amount of annual income required to pay for housing – at $41,400.
Working a generous 40-hour-week for an entire year would deliver a pay cheque of $22,800 – only a little more than half of the affordable housing wage.
Statistics Canada, in its Survey of Housing Spending, reports that the biggest share of income for those in the lowest quintile (poorest one-fifth of Canadians) goes to housing.
When housing costs continue to rise as a percentage of overall income to almost 50 percent (as is the average in Toronto) or higher, then people are forced to turn to food banks or cut back on basics like medicine, clothing and transportation. Or they risk economic eviction when they can no longer afford to pay the rent – as happens to more than 30,000 individuals and households in Toronto annually.
Research from the Wellesley Institute and others draws strong links between poor housing, poor health and early death.
So, what are the policy options?
It’s pretty simply, really: Either boost the incomes of poor individuals and households with a basket of measures that might include additional increases in the minimum wage, an increase in income transfers and/or tax measures; or boost the investments in affordable housing to lower the cost of housing for individuals and households.