Fallacy of a living wage.

Notably absent from the conversation reported in a Nov. 11, 2023, Capital City Daily article, "Living Wage Symposium brought multiple sectors together to tackle the affordability crisis," was participation in it by any advocate for abandoning for-profit housing development – which has failed to deliver affordable housing and never will because it can't (link, link) – and reinvigorating instead Canada's historic, decades-long investment in social housing construction that ended in 1993.

"Affordability," as reported in the article, is discussed only from the perspective of individuals struggling to make rent and mortgage payments. But far larger social issues are implicated in the financialization of housing. For example, 1 in 5 dollars spent in BC are spent on rent.

This means that a disproportionate share of the surplus created by BC's productive economy, instead of being spent on training doctors, nurses, and other medical professionals for the future; properly staffing medical facilities to clinically acceptable standards in the present; and training other skilled workers across many sectors from schoolteachers to tradespeople to maritime workers, is disappearing into the derivatives casino, where illusory wealth is created by bidding up the prices of financial assets, not the least of which are houses, townhomes, and apartment buildings, with consequent ever-increasing housing costs for end-users..

According to the Conference Board of Canada, "Canadian financial institutions and pension funds held $7.8 trillion in assets at the end of 2018."

Meanwhile, in August, 2022, mortgage debt in Canada reached $2.06 trillion. (Mortgage debt in October, 2000 was $418 billion.) Non-mortgage household debt in August, 2022 was $724.2 billion.

For comparison, Canada's nominal GDP in 2022 was $2.14 trillion. (Real GDP, expressed at 2012 prices, flattening inflation, was $1.74 trillion.)

Canadians' total household debt is almost 110% of Canada's GDP

The enormity of the holdings of the FIRE (Finance, Insurance and Real Estate) sector is due to an exponential rise in house prices which occurred because treating houses as financial assets, as opposed to infrastructure in which people dwell, subjects house prices to the inflation financial asset prices experience because they are determined by a "market," not by how much it cost to build them.

Symposium participants seem also not to have noticed that increasing wages to a "living wage," which of course is necessitated by relentlessly increasing rents, amounts to a pass-through subsidy to the holders of residential properties, thus encouraging them to increase the rents they demand even further. Social housing, by comparison, aside from freeing individuals from having to pay predatory rents, minimizes workers' living costs, the consequences of which for the economy as a whole are far-reaching.

Reducing the cost of living, not subsidizing actors responsible for increasing it, helps keep wages and thus the cost of doing business – and prices – from increasing. This enhances companies' competitiveness on world markets, boosting a nation's current account. At 26.8%, Shelter, among the eight components of the CPI (Consumer Price Index, the most widely used measure of inflation), is one of the most significant destabilizing factors financializing housing has introduced into Canada's economy.

Finally, no mention is made of the fact that "Economics 101: Supply and Demand" is a smokescreen behind which real estate holding corporations – whose business model is to accumulate thousands of housing units and demand the highest rents for them the productive economy can be forced to cough up – hide the monopoly pricing power they exercise in driving housing prices into the stratosphere.