Report outlines challenges of adopting living wage policy in the Sault

It would cost $721,550 to bring all municipal employees in Sault Ste. Marie to a living wage, but a staff report urges a cautious approach to ensure wage increases don’t get out of hand.

A report headed to city council Jan. 8 said the non-profit Ontario Living Wage Network (OLWN) certifies businesses and municipalities that pay a living wage – an hourly amount the group recalculates each November.

The hourly rate varies depending on where you live. The highest living wage rate is in Toronto at $25.05 an hour. The lowest is $18.65 in the southwest areas of the province. In northern Ontario, it is $19.80.

In the Sault, all full-time city employees already make more than a living wage. Bringing all part-timers up to a living wage would cost $402,144, while increasing the pay of summer students would cost $319,406.

But getting certified by the OLWN would mean the city would no longer be able to control pay rates for certain jobs, the report said. The network sets the living wage and its members must pay it or lose their certification.

After being set at $16.20 in 2021, the living wage estimate in the Sault rose by more than 21.6 per cent in 2022 to $19.70.

The hourly rate varies depending on where you live. The highest living wage rate is in Toronto at $25.05 an hour. The lowest is $18.65 in the southwest areas of the province. In northern Ontario, it is $19.80. (Source: ontariolivingwage.ca)

Another issue is what’s known as “wage compression,” where people in higher job classifications suddenly make the same as less skilled staff, breeding resentment.

“Wage compression occurs when the pay of one or more employees in a lower job band is very close to the pay of more experienced employees in the same job or of those in higher level jobs, including supervisory positions,” the Sault staff report said.

WAGE COMPRESSION

“This can result in inequity within the corporate pay grids, which can lead to employee disengagement and retention issues, particularly for positions directly senior to the position(s) who received the larger wage increase.”

There were four businesses in the Sault that joined the OLWN, but one of them, Odd Job Jacks, closed in December “due in part to labour costs,” the report said.

The report recommends the city gradually adopt the living wage policy without joining the network.

“This would allow the corporation to advance the living wage goals on an approved schedule and with the level of resource investment that works for the organization, while allowing the corporation to retain control over employee salaries and purchasing processes/requirements,” the report said.

“The corporation would then not be committed to actions or wage rates in the future that may not be feasible.”

Read the full report here.

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