This post was previously published on my old blog on October 27th 2011
Andrea at So Over Debt and Jackie at Money Crush posted what their hypothetical budgets would be on a minimum wage salary so I figured that I would do the exercise as well to give everyone a Canadian perspective.
Minimum wage in my province is 9.65 which, with a 40h week and 50w per year, would gross me a salary of 19 300$ per year. The government would also kick in another 815$ per year in sales tax refunds. If I had a child, I would get another 290$ per month (3 480$ per year) but, since I have no idea what expenses would come with being a mother, I will omit that money.
The 815$ from the government is tax-free but the 19 300$ has a 14% marginal tax rate (1 588$). In addition, the provincial government will take 5.025% to put towards my pension (1 013.25$) and I will need to make unemployment contributions of 4.95% (955.35). I will also need to make contributions towards my health care (300$/yr).
My grand total after all the deductions would be: 16 258.40$ per year or 1 354.87$ per month.
|Rent||600||600$ is about the average rent in this city for a decent apartment in a sketchy neighbourhood|
|Utilities||100||I would budget about 100$ per month for heat/electricity (it could be more if the apartment is poorly insulated – it could be less if the apartment is like my last one and has no heaters).|
|Transit pass||75||No cars in this household…|
|Internet||65||Internet access is extremely pricey in Canada|
|Groceries||200||I might be a bit overboard in this category but personally, I’m a foodie so I would rather sacrifice in other areas of my life than give up the food that I like|
|Personal care||50||Soap, shampoo, toiletries, the occasional treat|
|Savings (10%)||135||I have saved my entire life and, like food, would rather cut back in other categories than stop saving|
|Cell phone||75||I’m in a three-year contract so my choices would be to a) pay 75$ per month, b) Stop paying and destroy my credit score or c) pay a fine of 490$|
|Total:||1300||I would have 54.87$ leftover every month|
In all honesty, I think that being poor in Canada is much, much easier than being poor in the US. First of all, while we don’t have food stamps (to my knowledge), everyone who is low- and middle-income receives a tax rebate each month. I think that, when everyone is receiving a form of government assistance that is disguised as a “tax rebate”, it makes people less hesitant to rely on the government in times of need.
The two major reasons that my budget works are that a) our minimum wage is almost 10$ per hour and b) we have almost-free health care. In my scenario, if I had to pay for any dental work (which is only covered by the government if you are receiving welfare) or eye care, my budget for the money would be shot and I would probably have to go into debt or use my savings. As I would only be saving 135$ per month, I predict that my savings account would stay pretty much stagnant month to month as little expenses would be considered emergencies with such a low income.
My budget is perhaps a little unrealistic since, as a single person, I would probably rent an all-inclusive room at about 400$ per month vs having an apartment all to myself.
My final thought on this exercise is how foolish some people are. I understand that there may be circumstances beyond your control but here are a few pieces of information for my American friends:
1- In this province, we only study up until grade 11 for our high school diploma and we still have the highest drop-out rate in North America
2- In this province, all trade programs as well as the first two/three years (depending on the program) of post-secondary education are free. These two/three year programs lead to a college degree in anything you’d like – languages, science, veterinary assistant, music, computer science etc.
3- In this province, university education costs 2 100$ per year
All of this to say that my province has really garnered itself a sense of entitlement. We expect that we will get jobs at 10$ per hour and have extra money thrown in by the government. We expect that our health care will be free. We expect that we need to put no effort into our personal self-improvement to keep up a decent standard of living.
In short, not only is it possible to live on a minimum wage salary in Québec, the lack of further education (or in some cases, basic education) in this province has led to a society that is full of minimum wage workers in every neighbourhood – and no one’s saying a thing.