Linda McQuaig Thaws Public-Sector Pay
Linda McQuaig puts the heat on Ontarioâ€™s public-sector compensation freeze in todayâ€™s Toronto Star.
Her excellent column begins by noting that the federal government has fended off proposed financial-sector taxes on the grounds that Canadian banks did not cause the global financial crisis. But Canadian public-sector workers, who are even less responsible for the crisis, are expected to make a monetary contribution to addressing its consequences.
McQuaig also notes that, right up until the financial crisis, Bay Street was lobbying for permission to operate more like Wall Street. In particular, she points to a C. D. Howe Institute paper that Travis flagged earlier this year.
The Howe, which peddled the deregulatory mantra that led to the crisis, should indeed be held to account. Its current publications provide almost no indication or acknowledgement that a crisis occurred. The Howe has reverted to simply assuming full employment in its approach to economic policy and worrying about egg marketing boards.
McQuaig cites me on the monetary value of Ontarioâ€™s proposed pay freeze. Of course, such an estimate depends on what public employees could otherwise negotiate.
The provincial governmentâ€™s preferred set of figures indicate a recent annual average of 3% for public-sector wage settlements. It seems reasonable to assume that the recession and fiscal austerity would have knocked that average down to 2% even without an explicit two-year pay freeze.
If someone making $25,000 per year lost two 2% wage increases, his or her annual salary would be $1,000 lower. According to Statistics Canada, wages and salaries totalled $42.8 billion last year across the components of Ontarioâ€™s public sector subject to the freeze policy. Avoiding two 2% increases would save public-sector employers $1.7 billion annually (substantially less than the annual cost of provincial corporate tax cuts).