Finance Minister Dwight Duncan announces that public sector executives will have their salaries capped during a press conference at Queen’s Park in Toronto on Sept.20, 2012. (MICHELLE SIU/The Canadian Press)

Bill Tufts and Mark Mullins writing the article Tale of Two Crisis in the August edition of the Bay Observer claimed that public sector wages are 30% above the private sector and that Ontario’s deficit could be erased by eliminating this premium.  The cited source for determining this public sector wage premium was the Canadian Federation for Independent Business (CFIB) based on the 2006 census.

The CFIB report has been shown to be so fundamentally biased by so many independent researchers that no serious journalist would rely on it when writing an article. The CFIB’s report runs counter to every non-partisan, unbiased study done by academics over the last several years.

The census data for 2006 which was supposedly the basis for the CFIB’s actually shows the average full time pay in the public sector to be $49 655 and in the private sector $49 407 – a public sector premium of 0.5% not the 30% cited by your journalists.  Further analysis shows this small gap is almost entirely due to the smaller pay gap for women in the public sector than in the private sector.

Finance minister Jim Flaherty has also clearly acknowledged this in a 2011 speech to business students he said “Public service is good for you. It’s unlike any other career. It features long hours, relatively lower rates of pay than comparable positions on Bay Street … “.

Another idea expressed in the article was that unions take in so much money in dues that they can force politicians to bend to their will.  I wonder how these journalists could be so blind to what is happening to Canadian workers.

All Canadian unions together have been unable to stop the Harper government from removing collective bargaining rights from Air Canada, postal and CP employees. Unions could not stop McGuinty from ripping up large portions of teachers’ contracts.  The combined might of unions could not prevent government from making seniors wait 2 more years to collect old age security or from making employees pay more for EI in return for getting less.  Ontario unions could not stop Caterpillar from taking good jobs south or prevent the loss of hundreds of thousands of manufacturing jobs.  Does anyone seriously believe it was union lobbyists who convinced governments these outcomes, which hurt all workers not just union members, are good policy?

On a macro scale a recent Statistics Canada study documents that over the period 1981 and 2011 the average hourly wage of full-time workers rose by just 14 per cent. This compares to growth of over 50 per cent in real GDP per person over the same period.  The view that wages are “too high” boils down to saying that workers have no right to share in rising national income, all of which should go to profits and senior managers. Unions have been powerless to prevent this transfer of wealth.

By:  Bill Kuehnbaum



Providing a Fresh Perspective for Burlington and Hamilton.

One Comment to: Public Sector Wages are not what ails the Ontario economy

  1. Jay

    October 4th, 2012

    It’s hard to take your views on media bias seriously when your column leans so far left it nears topples over.


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