Why Minimum Wage is Not a Living Wage

Did you know that 40% of Canadian adults are worried that they will never be debt-free?

One of the most common problems Canadians face is earning enough to cover household costs, and this is largely due to a significant difference between the minimum wage and a living wage.

Statistics suggest that around 40% of people who file a consumer proposal or go bankrupt earn up to 40% less than the median income.

Hard-working people are struggling with debts, not because their spending is out of control, but because they don’t earn enough.

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The differences between a minimum wage and a living wage

A minimum wage is often confused with a living wage.

In reality, these two figures could be very different.

The minimum wage was introduced to protect workers and ensure that every employee earned a guaranteed amount per hour.

The living wage relates to the amount you would have to earn to live comfortably in a specific area.

As the cost of living varies from one part of a city, province or country to another, the living wage should be adjusted to take this into account.

The trouble with the minimum wage is that it doesn’t factor in the cost of living.

Broadly speaking, the minimum wage is the same across Ontario, despite the fact that it costs a lot more to get by in the centre of Toronto compared to a smaller town.

On average, you need to earn at least $14 per hour to live in Canada, but in some cities, the figure is considerably higher.

According to Living Wage Canada, the living wage in Toronto is $22.08.

The gap between the minimum wage and the living wage causes thousands of Canadians sleepless nights.

Almost 45% of adults claim that financial worries have a negative impact on their mental health.

Some provinces, including British Columbia and Ontario, are planning to increase wages, but there is still genuine concern for the future.

Is there a solution?

If you’re struggling to make ends meet, or you’re worried about borrowing more money or paying off debts, there are solutions.

One option is to work with a credit counsellor to identify ways of saving, pay off debts and learn to budget.

It’s also beneficial to look for employers and businesses that offer to pay a living wage, rather than the minimum wage.

If pressure grows on employers to increase wages in line with the cost of living, this may become a more universal approach in the future.


Household debt is rising in Canada and this is partly due to the fact that many people are not earning enough to cover the cost of living.

Low-income jobs don’t provide the funding required to pay bills, especially in the larger cities.

The minimum wage is a good idea in theory, but it needs to increase to prevent more Canadians from getting into debt.

If you’re concerned about debt, contact us for expert advice.

Information on Consumer Proposals

Consumer Proposals in Canada – An Alternative to Bankruptcy
What is a Consumer Proposal?
How to Amend a Consumer Proposal
What are the Benefits of a Consumer Proposal?
What are the Steps in a Proposal?
Consumer Proposal Eligibility
What Debts Are Erased in a Consumer Proposal?
Is There Life After a Proposal?

Canadian Bankruptcies

How to File for Bankruptcy
What is Bankruptcy?
Bankruptcy FAQs
How Does Bankruptcy Work?
What is the Cost of Bankruptcy in Canada?
How to Rebuild Credit Following Bankruptcy
Personal Bankruptcy in Canada
What Debts are Erased in Bankruptcy?

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