New living wage a reflection of strained housing market

This graphic shows the breakdown of the 2025 living wage, $24.60 per hour.

The cost of housing and a lack of affordable options for residents of Perth-Huron across the income spectrum are primary drivers for the recently announced increase to the area’s living wage, which rose from $23.05 per hour in 2024 to $24.60 this year.

Announced by the United Way Perth-Huron and the Ontario Living Wage Network during Living Wage Week Nov. 10-14, a living wage shows how much a worker must earn to make ends meet and enjoy modest participation in the community. The calculations gather expenses for three types of households: two adults supporting two small children, a single parent with one child and a single adult. Results are aggregated and include any applicable government taxes, transfers and benefits.

“This year, the main driver is cost of living related to housing, primarily,” said United Way Perth-Huron executive director Ryan Erb. “We’ve been seeing housing increase for a number of years and rental housing, even right now in this region, has not begun to come down. So, what we’re seeing is a reflection of the market, frankly.”

According to Erb, the housing market is responding to a lack of housing supply across the spectrum, especially housing appropriate for those living on lower incomes or those who require specialized supports. As demand in the area increases with major draws like the Stratford Festival, the Stratford Chefs School and the University of Waterloo, Erb said there are fewer options that meet the needs of the community, with many residents paying much higher than a third of their monthly income.

“There is not enough housing that is affordable to the needs of the people in the community,” Erb said. “So, there isn’t the right housing, there isn’t affordable housing for seniors – people that want to downsize from their large house to something that’s affordable for them. There isn’t the right housing that’s available for people who are middle income – people who are raising children are having a hard time getting into the housing market – and rental rates, because of all of that, are continuing to grow.

“ … We have all these pressures on housing over and above the regular housing needs of our community, and those are all good things that we face in our community, but it does mean there’s just more competition in this particular region.”

Erb said part of the solution to the housing crisis is working with the Ontario Living Wage Network to certify local businesses as Living Wage Employers, ensuring they are paying their workers enough to live locally.

“A minimum wage as opposed to a living wage means you’re paying more than 30 per cent of your income towards housing,” Erb said. “We know from surveys and conversations with people in the community, oftentimes people are spending far more than 30 per cent of their income in that regard. And so, a minimum-wage job, even though we’re thankful the government has begun to index it to inflation over the last couple of years, it still doesn’t keep up with the gap that exists. We’re talking about $7-an-hour difference between what it costs to live in the community and what minimum wage is.

“ … We don’t pretend (paying a living wage) is an easy thing for every business to do. … But we have lots of evidence from businesses themselves that it improves their bottom line by improving productivity, reducing turnover, improving the mood of the workforce. … We know when we pay people at this level, they’re spending money locally in the economy. This is actually good for the local economy.”

Erb said the other piece of the puzzle is working with all levels of government to both increase the local housing supply to meet the growing demand and find ways to reduce the cost of living in other areas.

“Government has a role to play here. Things like $10-a-day child care, if it were to be fully implemented, would actually reduce the living wage, right? We can think about this as a community. It’s not only on the employers; it’s also on government, it’s also on all of us to talk about.”

At $24.60 an hour, the 2025 living wage for Perth-Huron is broken down as follows:

• 33.4 per cent goes to housing and related expenses like insurance and utilities;

• 27.2 per cent goes to expenses like clothing, medication and phone;

• 15 per cent goes to transportation, which has become more expensive in rural areas like Perth-Huron due to a lack of regional public-transit options;

• 13.8 per cent goes to food, another cost that continues to increase but not at the same rate it has in recent years; and

• 10.6 per cent goes to costs associated with raising children.

To learn more about the living wage or becoming a living wage employer, visit perthhuron.unitedway.ca.