Minimum wage earners in N.L. can't afford rent, report says

There isn't a single province in the country where full-time minimum wage workers can afford to pay rent without using more than 30 per cent of their income, according to a report released Tuesday by the Canadian Centre for Policy Alternatives.

The rental wage is considerably higher than minimum wage in each province, the report reads, even in the three provinces with the highest minimum wages in Canada — British Columbia, Ontario and Alberta.

The report, written by economists Ricardo Tranjan and David Macdonald, calculates the hourly wage required to afford rent while working a standard 40-hour week and spending no more than 30 per cent of the income on housing. 

The findings are based on October 2022 data.

In Newfoundland and Labrador, where the minimum wage was $13.70 in October, workers needed to make over $2 more per hour, or 16 per cent — $15.94 — in order to spend less than 30 per cent on rent for a one-bedroom unit.

The average monthly cost of a one-bedroom apartment is about $800, according to the Canadian Mortgage and Housing Corporation.

Workers needed to make $18.08 to cover a two-bedroom apartment, which averages $938 per month.

In St. John's specifically, workers needed to make $16.60 for a one-bedroom and $19.96 for a two-bedroom, which run a tenant, on average, $851 and $1,033 each month respectively. St. John's also doesn't have a single neighbourhood with affordable one- and two-bedroom rental units for a full-time minimum-wage worker.

Despite what's known about the ongoing housing crunch across the country, the report says its findings should not be interpreted as simply a "supply and demand problem."

"At least three sets of factors make rent too high for low-wage earners: wage suppression policies; low supply of rental housing, especially purpose-built, rent-controlled, and non-market units; and poorly regulated rental markets that privilege profit-making over housing security and allow the use of rental accommodation as an asset class," the report reads.

"The mess in which we find ourselves is due to bosses keeping wages down, with help from provincial governments that set the minimum wage and federal governments that control monetary policy."

The report also compares rental wages and social assistance rates, a comparison of which "would arrive at even more dire findings."

According to Macdonald and Tranjan, in 2021 social assistance rates for single people who were considered employed were between 31 per cent and 51 per cent of the income of a full-time minimum wage worker, depending on the province.

The income of single people with a disability was slightly higher, between 32 per cent and 79 per cent.

The income of a couple with two children and receiving social assistance was between 55 per cent and 73 per cent of the combined income of two full-time minimum-wage workers.

According to a Maytree report on social assistance, updated in April, in 2021-22 there were on average about 20,000 cases of families or single adults, and slightly over 28,100 beneficiaries — individual claimants, their partners and dependent children — in Newfoundland and Labrador's income support program.

That's about seven per cent of the population under 65 years old. 

"Given Canada's chronic lack of investment in non-market housing, a large share of social assistance recipients rents in the private market, which is simply not financially possible, putting this population at an increased risk of homelessness," the report reads.

Read more from CBC Newfoundland and Labrador