• Making a Responsible Budget Decision

    In the 2019 Budget deliberations an item of contention arose around removing $521,000 from the anticipated budget costs that was earmarked last year for a provincially legislated minimum wage hike. With the change in provincial government, that requirement was removed. It was the staff recommendation that we not proceed with a wage increase and remove that earmarked amount from the budget.

    Advocates have argued that “it was in the budget already, you shouldn’t remove it”. But of course things that were not anticipated had to be added to the operating budget, including additional funding for ambulance services to tackle growing response times ($590,000), cycle network maintenance ($408,000, required to meet new provincial standards), mental health funding for police officers ($161,000) and restoring seniors bus tickets ($285,000) transit access at a more affordable rate. In total, over $1.4 million in operating costs not planned for were added.

    The result, the increase this year is 2.7%. In comparison a senior in our community living on Canada Pension Plan benefits will receive only a 1.5% increase.

    Making budget choices is never easy. And whether in a council seat, or as resident of the city, budget decisions need to balance care and cost, and also need to be considered in context and in impact, not ideology.

    For context, the city has about 3000 employees and all of our full-time and permanent part-time positions pay above the living wage rate for London.

    The group of people who may have received a pay increase are in our part-time casual classification. At peak employment this could be 330 employees. The demographic of this group is dominated (90%) by 16-23yr olds. The average wage of this group is $17.50 an hour.

    For more context, these fall into two general groups, part-time casual employees who may work for several months or even year around at city facilities. These might be pool lifeguards, or arena concession stand staff, and on average these employees work 8-10hrs a week. The other group would be seasonal workers who might work as much as 30hrs a week, but would typically have only 8 weeks of employment. These are typically summer jobs and could be weeding gardens and collecting litter in city parks, to supervising a day camp. These are jobs that provide some extra pocket money for students, or a bit of savings for school, but they are not jobs anyone would reasonably expect to support themselves on. Depending on the job’s skill and training requirements, while entry level positions do pay minimum wage, other positions pay above that. In both cases employees are eligible for pay increases. This includes seasonal employees who return the following season, the City of London recognizes their past experience adds value to what they bring to the position.

    While private sector employers may hire at minimum wage and never offer a pay increase, the City of London does not keep people “frozen” at entry level pay.

    Another factor to consider is that the wage increase had dollar amounts built in for the City of London’s Boards and Commissions. This would be organizations such as the Kettle Creek Conservation Authority and the London Public Library. While the city could request those organizations increase entry level wages, City Council could not actually enforce that. In other words, we’d be writing a cheque with zero control over whether it ended up paying for what it was intended for.

    Understanding the context, we have to consider the impact. So what impact would have been made by leaving a voluntary half a million dollar pay increase for part-time casual positions in place?

    First, let’s keep in mind that this would be a permanent addition to the city’s budget. This represents about 0 .1% increase to the operating budget, a 0.1% that will be in the budget every year from now on. That means less flexibility for other programs or initiatives we might want to undertake, automatically lessening our ability to make a greater impact in another way.

    Next, let’s put the impact in perspective. If implemented now, this pay increase would benefit 283 people. For a seasonal summer student working 30hrs a week for 8 weeks that would represent an extra $240 in income over the course of their summer job. If we looked at an arena employee working 8hrs a week, for 8 months of the year (Sept-May hockey season) it would provide an extra $256.

    In contrast, the youth bus pass the City of London has subsidized for secondary school students—with 3377 passes issued so far—has a budget impact of $192,000 a year currently and the “kids under 12 ride free” transit program budget impact is $423,000. In other words, for about the same cost the transit subsidy cost has benefited 3377 secondary school students and allows every child under 12 to ride transit in London without paying fare, while the $15 an hour entry level wage would benefit 283. It’s easy to see which has the bigger impact.

    In addition the City also funds the “Income Related Transit Program” at $442, 770 to provide bus passes to low income Londoners. Approximately 2700 individuals were made eligible for this program in 2018, and a total of 14259 monthly passes were sold. The program has been experiencing a steady increase as well, with almost 1400 passes purchased in November alone, compared to 652 the first month the program existed.

    Currently these transit programs are not fully or permanently funded. The “Kids under 12” program has $150,000 of permanent funding, only a about 1/3rd of what is needed. The Low Income Pass and the Youth Pass are pilot projects. The Youth Pass was funded from a one-time surplus and while the Low Income Pass has some permanent funding, excess costs from both are drawn from contingency funds. This is not sustainable. We must either build another $1.2 million (another .2% property tax increase) for these new transit costs into operating costs into each year of the multi-year budget, or cancel them.

    We also have to consider what the London’s other needs are. Most Londoners know, we have a geared-to-income and affordable housing crisis in our community, a reality that was reinforced in local news recently: https://london.ctvnews.ca/waitlist-for-social-housing-in-london-jumped-in-2018-1.4275725. The impact we could make by dedicating half a million dollars to housing every year from now on that could help people of all ages facing income and poverty challenges, is far greater, and would be a direct long term investment in the fight against poverty in our city.

    We believe anyone working full-time in our city deserves an income that keeps them out of poverty. We believe in the concept of a living wage. In fact, considering the differences in cost of living across Ontario, we think a “living wage” bench mark is far better tool than the minimum wage. The minimum wage is a blunt instrument that doesn’t take into account differences in cost of living in Toronto vs London vs Chatham vs North Bay vs Ottawa.

    But we also think we are doing our society a disservice to present an argument that every job is a “living wage” job. And it is important to remember what is considered in calculating a “living wage”, which according to livingwagelondon.ca (a website from the Poverty Research Centre & MLHU) is the rate two income earners would need to earn to support themselves and two dependents and have money available for a basket of goods that includes not only housing, food and clothing, but social inclusion activities (for example sports fees) and a modest vacation. It is also supposed to factor in government benefits and transfers (in London for example, the transit subsidies are a government benefit provided to the casual part-time demographic but which is not factored into the current calculations).

    We admit, that the realities of the job market today mean good paying full time jobs are harder to find, that more people have to work from contract to contract or work two jobs to make ends meet. But those are not issues that a municipal government can tackle. The epidemic of temp agencies for example, needs to be tackled by the Government of Ontario through labour laws. London cannot do it alone. Pension benefits not keeping up to the cost of living falls squarely at the feet of the Government of Canada, not City Hall. To pretend that a symbolic gesture from London City Hall will change anything is just wishful thinking.

    Are we willing to dedicate an additional half a million dollars a year to combat poverty in London? Absolutely, but we need it to be in a meaningful and lasting way. Would we love to vote yes to fund this increase for our part-time entry-level casual positions? Of course we would. Unfortunately limited resources and the opportunity cost of those resources make for very tough decisions, and in this case, we do feel that that $521,000 every year, forever could be spent in ways that have a much greater impact towards achieving our City’s poverty reduction goals.

     

    Respectfully,

    Councillor Shawn Lewis, Ward 2 & Councillor Josh Morgan, Ward 7

Comments are closed.