Public sector wages

[meni0n]

Where did he advocate that?

I don't particularly agree with the scheme that he advocated for, but I don't see where he stated they wouldn't have the right to collective bargaining. If you're referring to the right to strike, that's not at all the same thing. I actually think the question of the right to strike for public servants is one of the better questions he's brought up, and I am huge supporter for the right to collective bargaining.

rly:

It's sad that you feel this offended by someone discussing public sector compensation.

His opening post literally said he wants to set compensation in stone and tie it to the national median to remove the union's ability from bargaining for compensation. That is exactly what he was proposing, removing the ability of the unions from negotiating compensation for the people they represent.

My employer is the Government of Canada. I may work in the public interest but I am still employed by the Government. The OP has not provided a shred of evidence to suggest public salaries are way out of line. He based his point of view about how unfair it is for the public service to be able to bargain for their raises while some private company decided to give less to their own workers. So instead of thinking of how to improve compensation at this private company, the OP decides that he doesn't like the fact the public service can negotiate their compensation and that removing that right is somehow the most logical thing to do, all because he pays "their salaries".

 

[ballz]

His opening post literally said he wants to set compensation in stone and tie it to the national median to remove the union's ability from bargaining for compensation. That is exactly what he was proposing, removing the ability of the unions from negotiating compensation for the people they represent.

My employer is the Government of Canada. I may work in the public interest but I am still employed by the Government. The OP has not provided a shred of evidence to suggest public salaries are way out of line. He based his point of view about how unfair it is for the public service to be able to bargain for their raises while some private company decided to give less to their own workers. So instead of thinking of how to improve compensation at this private company, the OP decides that he doesn't like the fact the public service can negotiate their compensation and that removing that right is somehow the most logical thing to do, all because he pays "their salaries".

I guess I read that part as talking about the right to strike as he was talking about "holding taxpayers hostage." I also read the wage premium (i.e. median wage + 2%) to be the part that would be negotiated... i.e. instead of negotiating your gross salary, you are negotiating the wage premium.

You keep saying he doesn't have the right to bargain because he's in the private sector but that's just not true so I'm not sure how you're concluding to that. Even if he doesn't have union (which the workers could start if they want one) everyone can always bargain with their feet.... which is what gov't workers would do if the wage premium was too low and there were better alternatives in the private sector.

I honestly didn't think that public sector wages were higher was even controversial, but okay... Fraser Institute says they are on average 10.6% higher in Ontario... and that's not factoring in what is almost always a better benefits package. You'll see that the OP is not the first person to suggest using the private sector wages as a means to control public sector wages. https://www.fraserinstitute.org/article/control-government-spending-in-canada-by-aligning-public-sector-pay-with-the-private-sector

And the actual report... https://www.fraserinstitute.org/sites/default/files/comparing-government-private-sector-ON-2018.pdf

 

[meni0n]

I never said he didn't have the right to bargain. I said that just because his union didn't bargain hard enough or his work place doesn't have a union and the wage increases were just given to them by the company, doesn't mean that's an excuse to propose taking away bargaining rights from public service employees.

I'd like to see those numbers for the CS category. I can tell you right now that there are a lot of specialized positions that are very underpaid. I could leave today and make 30-40k more elsewhere in the private sector. Those numbers may be true perhaps for a clerk position but not for a lot of the other classifications. Also, some of the research you provided seems quite off. They compared private vs public just in Ontario. How about we go and compare private vs public wages in Alberta or BC? I don't even know how some public service employees are able to live in BC.

I still don't see how tying public service wages to the private sector, where the incentive is to pay employees the least amount possible to maximize profits, make any sense. Perhaps it's the private sector that's underpaying their employees and not the public service overpaying theirs?

 

[ballz]

I never said he didn't have the right to bargain. I said that just because his union didn't bargain hard enough or his work place doesn't have a union and the wage increases were just given to them by the company, doesn't mean that's an excuse to propose taking away bargaining rights from public service employees.

I'd like to see those numbers for the CS category. I can tell you right now that there are a lot of specialized positions that are very underpaid. I could leave today and make 30-40k more elsewhere in the private sector. Those numbers may be true perhaps for a clerk position but not for a lot of the other classifications.

I still don't see how tying public service wages to the private sector, where the incentive is to pay employees the least amount possible to maximize profits, make any sense. Perhaps it's the private sector that's underpaying their employees and not the public service overpaying theirs?

The government also better be doing it's damn best to pay employees the least amount possible, how is this lost on you? It's not a charity, those are not just numbers on a computer screen, those are real dollars and there are a limited amount of resources. Why should taxpayers be forced to pay 10.6% above market rates? Is the government labour force 10.6% more efficient and therefore it's worth the cost? Or did the GOVERNMENT not bargain hard enough on behalf of it's stakeholders?

Did his union not bargain hard enough? Or is it because private sector businesses are *forced* to be more efficient by the market? And therefore they simply can't afford to pay workers an extra 10.6% plus defined benefit pensions, early retirement, etc. or their competitors will literally run them out of business. A reality that the government doesn't have to face because it is just borrowing us further and further and further into debt for political gain.

There's a fine argument to be had about whether we should be willing to pay a premium in order to get the most effective public service in the world, or maybe we don't need the most effective public service in the world. Or maybe we could have the best public service in the world for 10.6% cheaper if the government did a better job with human resources on our behalf.

 

[meni0n]

The government also better be doing it's damn best to pay employees the least amount possible, how is this lost on you? It's not a charity, those are not just numbers on a computer screen, those are real dollars and there are a limited amount of resources. Why should taxpayers be forced to pay 10.6% above market rates? Is the government labour force 10.6% more efficient and therefore it's worth the cost? Or did the GOVERNMENT not bargain hard enough on behalf of it's stakeholders?

Did his union not bargain hard enough? Or is it because private sector businesses are *forced* to be more efficient by the market? And therefore they simply can't afford to pay workers an extra 10.6% plus defined benefit pensions, early retirement, etc. or their competitors will literally run them out of business. A reality that the government doesn't have to face because it is just borrowing us further and further and further into debt for political gain.

There's a fine argument to be had about whether we should be willing to pay a premium in order to get the most effective public service in the world, or maybe we don't need the most effective public service in the world. Or maybe we could have the best public service in the world for 10.6% cheaper if the government did a better job with human resources on our behalf.

You missed the part for that 10.6% where it said it was comparing public vs private in Ontario. If you do exactly the same comparison in Alberta or BC, I bet you will have very different numbers. I actually prefer the Government to pay employees fair compensation for their services and not turn into a faceless corporation that prefers to take advantage of people and try to get away with  getting the most amount of productivity while getting away underpaying people because they can.

 

[ballz]

You missed the part for that 10.6% where it said it was comparing public vs private in Ontario. If you do exactly the same comparison in Alberta or BC, I bet you will have very different numbers. I actually prefer the Government to pay employees fair compensation for their services and not turn into a faceless corporation that prefers to take advantage of people and try to get away with  getting the most amount of productivity while getting away underpaying people because they can.

Apparently not... Alberta has pretty similar results here.

https://www.fraserinstitute.org/studies/comparing-government-and-private-sector-compensation-in-alberta-2017


If the government did it's job well, the public sector would get fair compensation, that's how markets work. The question is, are they really doing their job if we're spiraling into debt... and yet at the same time paying compensation that is quite in excess of "fair" by market standards. That's why people are looking at the private sector as a measuring stick... they expect their government to be competent and efficient and the private sector is a fair measuring stick.

I don't think "the government should pay extra, just because it's nice of them to do so" is a particularly strong argument.

 

[meni0n]

I don't know why you are assuming that the private sector is the one that is paying fair compensation, given that their main goal is profits. While the Government doesn't have that goal, maybe it's the public service that has fair compensation while the private is skewed because their motivation is different? There are different ways to look at this.

 

[Bruce Monkhouse]

That's why people are looking at the private sector as a measuring stick... they expect their government to be competent and efficient and the private sector is a fair measuring stick.

Like Sears? Target Canada?  Nortel?  Bre-ex?  RIM? 

 

[ballz]

Like Sears? Target Canada?  Nortel?  Bre-ex?  RIM?

Sure... How much do those wages contribute to the "average private sector wage" which people are advocating be used as a measuring stick?

Cherry-picking companies that failed is just silly, I could come back with "like Google? Like Suncor? Like Manulife? It would be just as silly. Actually less silly, because those companies are part of the market and would increase the "average private sector wage" where as your cherry-picked example literally wouldn't factor into the equation.

 

[ballz]

I don't know why you are assuming that the private sector is the one that is paying fair compensation, given that their main goal is profits. While the Government doesn't have that goal, maybe it's the public service that has fair compensation while the private is skewed because their motivation is different? There are different ways to look at this. I also don't understand how you're tying public service compensation to the government going into debt. Is that the main factor that is dragging us into debt?

Everything the government spends money on is tied to the government going in debt, and public sector compensation is pretty large expenditure for all governments. It's also politically popular in the short-term with long-term consequences if mismanaged, particularly since cutting government jobs is extremely politically unpopular...
And yes, I'm just as critical about other forms of government spending than just compensation expenses, as we all should be.... like you said, we're all taxpayers.


What Danny Williams did to Newfoundland is a great example. As Premier he brokered a bunch of deals to bring in oil revenues and made Newfoundland a "have" province.... then, he increased government expenses because of all this new money coming in. We're talking an increase in government spending (not all in public sector compensation, but of course a big chunk of it) from $3.5 billion to $6.5 billion, a massive 86% increase in government expenditures.

The price of oil dropped and so the royalty revenues dropped, and Newfoundland was budgeted for a $2.5 billion deficit because of it, and do you know how politically impossible it is to cut government spending by 38% and during a recession to boot??? ... all of this was created out of essentially charity, it wasn't required 5-10 years earlier.... and now the government was running a $2.5 billion dollar deficient where as if they had not grown the size of government so much, they would have been running a $500 million surplus during a recession.

Newfoundland ended FY 2003 with $3.5 billion in expenditures and a pretty manageable $60 million deficit. That's right when Danny Williams took over. By the time he left, FY 2011 had $6.5 billion in expenditures. Due to recession and the drop in royalty revenue, by March 2015, they were expecting a $2.5 billion deficit even though expenditures remained at $6.5 billion...... this would have been a $500 million surplus, in a recession, but the political wins of increasing government spending for Danny Williams were too tempting and he basically sank the province with 70-90% approval ratings for doing so.

 

[mariomike]

, particularly since cutting government jobs is extremely politically unpopular...

Or going after collective bargaining rights, the arbitration system, and pensions.

Anyone remember Tim Hudak?

Tim Hudak feels heat over impact of job cuts on fire, ambulance services

OXFORD CENTRE, ONT.—Tim Hudak got a grilling about his promised 100,000 public sector job cuts from a “longtime, very dedicated Conservative” fearing the impact on fire and ambulance services.

“Municipalities make determinations on their fire and their ambulance,” added Hudak, who signalled intent to curb salary arbitration awards to emergency services workers.

https://www.thestar.com/news/ontario_election/2014/05/20/hudak_says_only_judicial_inquiry_can_get_to_bottom_of_gas_plants_scandal.html

Ontario election 2014: OPP officers' union launches anti-Hudak ads

Ads don't mention job cuts, but focus on collective bargaining, arbitration, pensions

Neither the police union ads nor the organization's president, Jim Christie, specifically mention job cuts. Instead they focus on Hudak's stance on pensions, collective bargaining rights, arbitration and wage freezes. 
https://www.cbc.ca/news/canada/toronto/ontario-votes-2014/ontario-election-2014-opp-officers-union-launches-anti-hudak-ads-1.2661984


Firefighters union issues anti-Hudak letter
https://torontosun.com/2014/06/04/firefighters-union-issues-anti-hudak-letter/wcm/f188f9a0-aeb6-453c-bcd7-5da6eeae3e74

"will face an arbitration that will be tilted in the “employer’s favour” making it “impossible” to ever get a “fair deal” again."

“I’ve seen this kind of destruction before — in the United States,” Schaitberger writes. “I have witnessed the heartache of firefighters losing their jobs, their pensions and their rights at the hands of malicious Tea Party governments that scared people into voting for them and then imposed the same destructive plan Hudak has promised for Ontario.”

 

[Navy_Pete]

For the point of it being difficult to budget based off the average income, you would have to set it up to say have at least a 2 year delay to ensure the data is accurately collected, much like how for this year statistics are mostly from 2017 and earlier the same would have to be done for the income as it is the only way to predictively do it. Possibly 3 years out (so say if it was the 2020 wage, it would be the 2017 income) so there can be better planning.

The legal questions are a more difficult one to answer. I am not a lawyer by any means, but you wouldn't necessarily be taking away the right to associate or bargain, you would be taking away one section of what they are allowed to bargain. I don't know if that would fly in a court of law or not, but it would be interesting to watch.

I actually am enjoying this debate as there are many interesting points being brought up that I hadn't considered (such as the possible legal consequences). Any more potential thoughts on what could be some good, bad, or otherwise complicated points?

It would be a highly divisive labour relations issue, so would expect a lot of challenges, strikes, etc.  All of that has a direct and indirect cost on the economy.

It would be a huge macro change, but I'm not sure what gain you would really have.  If it goes from someone negotiating a set salary, to a median income +x, you should expect the median+x to be the same as the salary as your starting point, so your labour costs won't go down.  There would probably be some guarantees required for a minimum salary, or some pretty significant performance possibilities to offset the salary risk. It would probably give any CFO a heart attack though.

Also no idea how this would affect people getting mortgages etc.

Overall this would probably push a lot of people out of government, and normally it's not the bottom third that has good alternate job options, so you should expect the general effectiveness to drop.

Rather than make sweeping macro changes, the best bet is to reform a lot of little things. At the federal level, you spend a lot of time doing a lot of processes for low dollar value or low risk items, with a lot of redundant reporting.

For example, for a standard travel claim, there is a travel approval submission with a rough budget for approval, and then the actual travel request with the actual budget.  Depending where you are, those go up to the ADM (basically a VP position) for the initial approval and can take weeks (so your booking costs increase). The actual travel request also has a similar approval requirement, and normally goes up to a manager level.

Normally you can assume the whole thing will take three to four weeks for routine and a few weeks for priority approval. I've also had my travel request audited a few times, so it was verified by a supervisor, manager and director, then independently audited. This was for a three day trip that cost less then $1k.

There is a massive amount of oversight, review etc but normally doesn't really scale well.  All of that has a massive resource requirement, and convinced that if you trimmed most of that, focused on the big ticket stuff, and actually penalized people that abused travel and hospitality, or otherwise mismanaged approved levels of spending authority, it would make a significant difference.

That's an obvious example, but there probably hundreds more. Some of it makes sense, but most of it has built up like layers of silt over the years, and there is a huge amount of reluctance to ever get rid of oversight (or track the LOE or cost impacts).

Specialist would spend more time working on their actual area (rather than so much time on bureaucracy and processes), you wouldn't get artificial cost increases from decision lag, and people would be generally happier.

If you do that on a broad scale, your administrative burden goes down, but you don't necessarily reduce your front end staff. So some of the management can either get reduced, or actually focus on management. Can't tell you how much time I spent running around on all kinds of other stuff that could have better been spent doing my core job, but if the paper didn't get pushed (and pulled, dragged, beaten into submission, then tracked down and start over) things weren't in place for work to get done.

Personnally I don't think public servants are the root cause of the problems Canadians complain about for the most part. What I've seen myself is that they get stuff done despite all the BS they have to wade through.  Sure there are plugs, but you get the same thing in private sector. Same with the empire building managers that kneecap progress for their own glory.

Most times I think we could benefit from a decade or so of benevolent dictatorship to burn the current system of processes to the ground so we can start over, and have that happen ever generation or so (to make sure it keeps up with modern requirements). Not going to happen, but a guy can dream.

 

[Cloud Cover]

https://torontosun.com/opinion/columnists/agar-public-service-pay-cut-in-order                                                                                                                                     

 

[Colin Parkinson]

Further to Navy-Pete post, my co-worker had her travel claim denied because the hotel was $2 over the approved city rate, for a 2 night stay. So she had to go back to the Regional director to get approval and then resubmit it. Imagine how much that cost in wage time....

 

[Bruce Monkhouse]

Public wages exploded during the years 2001 and 2009 by 6.7% by year.

That was just stupid hiring by a stupid Govt..  I doubt very much the actual wage increase over that whole time for OPSEU employees was even 6.7%.

I'd take the one percent cut IF I thought that would mean Govt. (whatever party) carried on the seriousness of spending less for at least a decade or so.  But I know all it would do is be "goody" money before every election.

 

[daftandbarmy]

Public wages exploded during the years 2001 and 2009 by 6.7% by year.

That was just stupid hiring by a stupid Govt..  I doubt very much the actual wage increase over that whole time for OPSEU employees was even 6.7%.

I'd take the one percent cut IF I thought that would mean Govt. (whatever party) carried on the seriousness of spending less for at least a decade or so.  But I know all it would do is be "goody" money before every election.

By 2030 there won't be too many people working for the public service. The message here for anyone working in a service sector job - unions or no unions - is probably something like 'be flexible, keep your education upgraded, networks connected, resume refreshed, mind open and personal debt loads low':

"Automation threatens public sector jobs, says PwC

Hundreds of thousands of public sector jobs could be lost by the early 2030s thanks to automation, says a Pricewaterhouse Coopers study.

Public administration and defence could experience job losses of 32.1% over the next 15 years, said research released by the accountancy firm on Friday."

https://www.publicfinance.co.uk/news/2017/03/automation-threatens-public-sector-jobs-says-pwc

 

[Navy_Pete]

I remember coming off a ship for a shore posting when DRMIS was coming online.  They sold it as automating a lot of tasks and streamlining processes.

Fast forward four years, and went back to the ship to find there was an explosion in digital paperwork and the amount of time required actually significantly increased. Most of them usually involved starting with something in word/excel, then uploading that into a notification that also required set up (partly because of the deployed server setup, but mostly due to fields available). Also, most management of work period work was still done on spreadsheets after extracting the data, with the trusty whiteboard in the office to track day to day.  The whiteboard and excel gantt chart were critical, and the only way we could figure out what was actually going on.

I'm convinced streamlining technology brings all the good idea fairies out of the woodwork. Replacing one twenty minute task with thirty 'streamlined' two minute tasks just because the technology exists doesn't result in more time to focus on actual management.

 

[daftandbarmy]

I remember coming off a ship for a shore posting when DRMIS was coming online.  They sold it as automating a lot of tasks and streamlining processes.

Fast forward four years, and went back to the ship to find there was an explosion in digital paperwork and the amount of time required actually significantly increased. Most of them usually involved starting with something in word/excel, then uploading that into a notification that also required set up (partly because of the deployed server setup, but mostly due to fields available). Also, most management of work period work was still done on spreadsheets after extracting the data, with the trusty whiteboard in the office to track day to day.  The whiteboard and excel gantt chart were critical, and the only way we could figure out what was actually going on.

I'm convinced streamlining technology brings all the good idea fairies out of the woodwork. Replacing one twenty minute task with thirty 'streamlined' two minute tasks just because the technology exists doesn't result in more time to focus on actual management.

Frequently, the push to automate requires the individual to take ownership of all those tasks previously performed by a HQ staff. And with the advent and speedy progress of various apps, and other similar technology driven off the smart phone, we may see the elimination of administratively focused HQ staff.

The currently reality reflects your example though, more often than not, so we're likely to have to rely on the good ol' whiteboard and street smarts for a little while longer!

 

[mariomike]

https://torontosun.com/opinion/columnists/agar-public-service-pay-cut-in-order                                                                                                                                   

He does not seem friendly towards Toronto's unions: "Greed? Let's talk unions."

Even uses the Ford Nation "Stop the gravy train" slogan.

Says, "firefighters don’t work for the province, but municipalities. Their fight, if they have one, is with municipal councils."

What he does not mention is that the city's emergency services are at the mercy of Queen's Park when it comes to collective bargaining rights, pension, arbitration etc.

Greed? Let’s talk unions.

The unions who represent well-paid workers with terrific benefits are literally freaking out to the point of unprecedented scare-mongering over the possibility a Tim Hudak Progressive Conservative government will try to balance the books.

Firefighters have brought in help from an American union to spread the notion if Hudak is elected, none of us will be safe.

Not only is that ridiculous, firefighters don’t work for the province, but municipalities. Their fight, if they have one, is with municipal councils. And they are very well paid.

Ditto the union representing OPP workers: the Ontario Provincial Police Association.

Representing one of the most highly paid police forces in the world, they had the gall to run an ad attacking Hudak by telling voters we won’t be safe on the streets and in our beds if the PCs are elected.

Using an officer with a taxpayer-funded uniform and squad car, the ad originally didn’t identify the message was coming from the union. It was billed as a message from the OPP.

(This was eventually corrected.)

The OPP got a 5% increase in 2011, 8.5% this year, and are in line for more, so as to be ahead of the Toronto Police Association, as per their contract, which stipulates they are to be the highest-paid in the province.

Have you had a 14% pay bump since 2010?

Public sector unions spend millions each election, mostly on ads attacking the Progressive Conservative leader.

The Liberal party rewards them by growing government, adding more voters to their team each year.

The cycle of greed continues. The debt grows, and the burden is placed on the private sector, since government doesn’t make money, it just spends it.

In 2011, 4.3 million people voted. There are over a million public employees, plus their families. They have the power, along with other life-long Liberal voters, to win a multi-party election.

Public union employees on average have a better situation in terms of salary, benefits and retirement than do their counterparts in the private sector doing comparable work.

Voting Liberal in this election, if you’re a public sector worker, is an admission you don’t care about your friends and neighbours in the private sector.

You just want your gravy train to keep on rolling.
https://torontosun.com/2014/06/09/voting-liberal-are-you-feeling-ok/wcm/2bc1087a-1233-4ca4-b9dc-2c1c350a76a6

That's from 2014. But, there was lots more,
https://www.google.com/search?source=hp&ei=A8rRXIi9Ku-I5wK32KaoBw&q=%22Jerry+Agar%22+unions&btnK=Google+Search&oq=%22Jerry+Agar%22+unions&gs_l=psy-ab.3...3585.12043..12350...0.0..0.623.3415.0j17j2j5-1......0....1..gws-wiz.....0..35i39j0i67j0j0i20i263j33i21.LSjg7G_1fxI

 

[dapaterson]

We automate processes to eliminate clerical (lower-paid) functions, and replace their efforts with higher-paid people trying to understand the minutia of the processes the clerks did.

Of course, we rarely simplify the processes and take advantage of automation; rather, we automate a paper heavy process, retain its workflow, but add in computers making things longer, more complex - but with fewer people to deliver, and no one dedicated to the function.

Or, if you're some IT systems, you promise personnel savings, deliver a reduced solution late, but cut the personnel who should have been leading the transformation effort per your original schedule so you can claim an early RoI, and then wrap up millions over budget with a system that's fine on the shop floor, but not so good in deployed, austere locations with limited bandwidth.