March 31, 2010
More on the growth in public sector employment
March 15, 2010
PSAC president says public servants not paid as well as private sector workers
In direct opposition to common belief, John Gordon of the Public Service Alliance of Canada says that civil servants are worse-paid than private sector workers:
“Here we are again,” says John Gordon, the president of the Public Service Alliance of Canada that represents 165,000 workers.
“Every time the government gets into [trouble] they kind of ramp up the rhetoric and the Canadian public starts to believe them . . .” he said.
In general terms, he added, his members’ wages run behind those in comparable positions in the private sector.
His workers are an easy target, he said, because the government fails to explain what it means to get rid of public servants — that services provided to the public would be affected.
For example, Mr. Gordon points to the work done by federal public servants during the H1N1 crisis to get vaccines in place and deal with the pandemic.
“It’s easy to broad brush it and say they should be freezing wages, which they have already done and cutting public services, which they are already doing . . .” he said, but added that the public has to ask itself what services it would like to see gone.
You see, unlike in the bloated private sector, where jobs are for life, and pensions are awesome, civil servants are overworked and underpaid. Any hint of reducing the costs of the civil service will automatically produce the most painful cuts for the public — that’s how the game is played. Even a freeze would somehow, through the arcane alchemy of public service financing, result in cuts only in the services most visible to the public.
Update, 16 March: An interesting sidelight to this is reported in Hit and Run:
California citizens are now encountering “state and local government officials [who are] increasingly . . . blaming budget cuts and furloughs when they withhold or delay the release of information requested under the state Public Records Act.”
March 13, 2010
Privatization? Let’s not be ideological!
Robert Fulford on the problems with unions in the public service:
Unions hate the very word “privatization.” And no wonder. Their present system is close to perfect: Their workers can’t be fired but can strike, as they do from time to time, demonstrating their power. They win most of their struggles with politicians, who throw billions at them just to keep them quiet. (After all, it’s not as if the politicians were spending their own money.)
This arrangement became commonplace in Canada about half a century ago, turning public-sector employees into princes of the working class who make more money than other people doing the same jobs, and receive more generous benefits.
Union members passionately believe this is no more than their due. The unions and their friends believe public ownership is fundamentally good, private ownership at best dubious. In 1994, when it seemed possible that Ontario would privatize liquor sales, the Ontario Liquor Boards Employees’ Union commissioned a study by a York University economist, Nuri Jazairi. He found, no surprise, that this was a bad idea and that the provincial government should continue to control every ounce of liquor sold within provincial boundaries, presumably for eternity.
But his report was most revealing when he turned to the motives of those who favour privatization. He suggested the idea sprang from “purely political and ideological reasons,” among which he listed “the control of public expenditures” and “limiting the role of government in managing the economy.”
It’s no surprise that the folks who benefit disproportionally from the current arrangement are the most vocally opposed to any changes which would reduce their advantages. If the government did get enough political will to go ahead and privatize, there’s no way (unless the government tied their hands in advance) that private enterprise would give — or could afford to give — their employees the same pay and benefits they currently enjoy under public ownership.
Update: Speaking of situations which could only arise under public ownership, here’s a perfect example:
More than 1,250 Ontario Ministry of Revenue employees will soon be receiving severance packages of up to $45,000 each — but they won’t be out of work. Most of them aren’t even switching desks. They’re simply being transferred from the provincial payroll to the federal payroll when the province moves to a federal harmonized sales tax this summer.
March 8, 2010
This sounds familiar
The other day, I wrote:
Once upon a time (and this is becoming long enough in the past to qualify as legend), government work was less well-paid than equivalent work in the private sector. The advantage of taking the lower-paid government job was job security: government workers had a “job for life” and a nice pension at the end of it. Private sector workers got more in the weekly pay, but generally had worse pensions and more uncertainty for long-term employment.
During the last generation or so, this basic trade-off has been lost. Government workers now get better paid than their private sector counterparts, still get practically guaranteed lifetime employment, and not-just-nice-but-very-nice pensions. No wonder governments have become the employer of choice.
Clearly I’m not the only one thinking this way, as Kelly McParland makes a similar pitch:
I like they way they put “bail out” in quotations, as if devoting billions of dollars to the rescue of Greece isn’t really a bail-out. Because in union-land, it isn’t. By definition, everything a unionized worker earns is deserved, because someone, somewhere agreed to pay it — especially workers employed by the government, who make up the bulk of the protesting Greeks. And since they earned it, there’s no reason they should make any sacrifices to help the country avoid economic disaster. No, that’s for little people, who don’t have government jobs.
Canada isn’t Greece, but it’s no healthier here to have a country divided into two classes. Class One: Public sector workers with safe, secure, well-paid jobs it is almost impossible for them to lose, with generous holidays, guaranteed pensions and protection against the economic cycles that prevail in the private sector. Class Two: Everyone else.
It used to be that the people in Class Two had an incentive for risking exposure to economic ups and downs. The pay was generally better, and it was possible to spend an entire career with a successful company and enjoy a pension at the end. Not any more. If events of the past few years have proved anything, it’s that no company is too big to fail, and there’s no guarantee benefits promised when you were hired are likely to be there when you leave. If the pension goes splat, like so many have, you’re on your own.
While the incentive to face the risks of the private sector have diminished, life on the government payroll has never been better. After all those nasty cutbacks imposed by Finance Minister Paul Martin, the Conservatives were elected in 2006, and have been spending wildly ever since. All the staff reductions have been reversed and the public payroll is bigger than ever. Salaries have largely caught up with private sector levels, and the pensions are just as rock solid as they’ve ever been. And you can’t be fired, short of indictment for murder.
At some point (and that point may be sooner than anyone believes), growth in civil service has to stop: there won’t be enough non-civil service jobs to pay for all the rest. Especially as government jobs become more and more attractive over their private sector counterparts. Why not take a job paying more money, with longer vacations, guaranteed pensions, and no risk of losing the job? You’d be crazy to take a job anywhere else, wouldn’t you?
