United Way Peterborough report highlights income ‘inadequacy’

A new report from the United Way Peterborough and District highlights what it calls income “inadequacy” across Ontario and its impact on public health.

Entitled “The Gap: Income (In)Adequacy,” the report reviews the past 34 years and shows how Ontario’s minimum wage and social safety net have both changed.

“There is an unspoken covenant between various levels of government and their citizens, and that is to serve people, to preserve communities, and to ensure opportunity for all to experience the fullness of life and their potential,” stated Jim Russell, United Way Peterborough and District CEO.

“Built into this notion is the belief that there should be a minimum standard of living for all people. When the cost of living outpaces income available through a minimum wage or social assistance programs, this minimum standard is not upheld as people are not able to afford basic necessities. Through this report, we are calling on readers to reflect, refresh, rethink, and renew how we understand adequate income as not something that is earned, but something that everyone in our community deserves access to.”

Betsy Farrar, manager of community impact, says the report highlights the “shortfalls” of other income types against the cost of living.

“Our research is highlighting how income rates such as minimum wage and social assistance are increasingly insufficient as the gap between these amounts and the cost of living widens year over year,” she said.

The report says Ontario’s minimum wage over the past 34 years has been frozen on four occasions, including a period of nine years. The minimum wage was frozen in 2018 and 2019 after increasing from $11.60 to $14 in 2018. The government at the time had promised a $15 wage for 2019.

Ontario’s minimum increased to $16.55 an hour in October 2023 and will increase to $17.20 this October.

The report challenges the “myths” that raising the minimum wage will cost low-wage workers their jobs, raise prices or hurt small businesses. The report notes a study in 2018 that showed while some jobs were lost, employment grew overall and unemployment fell to one of its lowest rates in years at 5.6 p er cent.

“When the minimum wage goes up, local economies benefit the most. Workers spend their money where they live, and because they operate on low incomes, most of their dollars are spent, rather than saved.

The report also highlights the “inadequacy” of social assistance rates, noting over the past 34 years, the disparity between Ontario’s social assistance rates and the cost of living has grown. Ontario Works (OW) and the Ontario Disability Support Program (ODSP) were introduced in 1998.

The report says today’s “value” of a social assistance cheque has “gone down considerably”

“An OW recipient has $2.51 less in our hourly calculation than in 1989, whereas an ODSP recipient’s hourly income has been reduced by $2.98,” the report states. “In annual terms, this is a loss in spending power of $4,393 for OW recipients, and $5,215 for ODSP recipients.”

Elisha Rubacha, the United Way’s community impact officer, says the results lead to food insecurity, contributing to an increase in health issues and further strains on Ontario’s healthcare system.

In 2022, the living wage for eastern Ontario was $19.05 per hour based on 35 hours of work per week, 50 weeks of the year. However, that has risen over the past year to $20.60.

More than 60 percent of food-insecure households in Canada are relying on wages, salaries or self-employment as the main source of income. Rubacha says it indicates too many of today’s jobs offer insufficient wages.

“Maintaining poverty is expensive,” Rubacha said. “For instance, adults in severely food insecure households in Ontario will generate health-care costs that are 121 per cent higher than those in food secure households.

“When even working people can no longer afford to eat properly, that illustrates a serious problem. Our social safety net similarly offers little protection from food insecurity, and in fact, has never been fully adequate to meet basic needs.”

The report also advocates for a guaranteed basic income. Ontario conducted a basic income pilot from 2018 to 2019.

Rubacha says the guaranteed basic income would mean a “world of difference.”

“They could have freedom to volunteer more,” she said. “They could do care work for the people in their lives who need care. All of that would be valued in a different way.”

The report concludes that many forms of income are “inadequate” to support basic needs.

“We can and must do better. Public health suffers when people do not have enough money, and that comes at a great cost to our communities,” the report concludes. “This includes many concrete financial costs, but it also includes the tremendous and intangible loss of human potential.”

“Improving incomes is necessary, whether that’s through a basic income guarantee, a higher minimum wage, more certified living wage employers, or all of the above. The suffering that results from
poverty is preventable. We can choose to prevent it. Together, we can end poverty.”

The United Way is planning a future community symposium on “healthy incomes” to discuss the links between income and health and to advance its local anti-poverty moment.

— with files from Germain Ma/Global News Peterborough