By calling for a two-year public sector wage freeze, NDP Finance Minister Rosann Wowchuk has embarked on a politically challenging, but taxpayer-friendly mission. On this initiative taxpayers need to stand behind her.
When the Canadian Taxpayers Federation met with Minister Wowchuk in January to present our recommendations for the 2010 budget, introducing a two-year public sector wage freeze was one of our top recommendations. The measure would go a long way towards helping the province address its massive deficit. After all, government salaries make up a significant portion of total expenditures.
As government employee salaries have been increasing by leaps and bounds over the past decade, it’s certainly justifiable to look at freezing, or even cutting pay levels to help the province balance the budget.
Doing so would recognize the pain of those who are footing the bill for the public sector salaries – employees in the private sector. Over the past two years, private sector employees have seen job losses, wage cuts and reduced shifts.
Big government unions like to talk about “solidarity,” well now it’s time for them to stand united with private sector employees and share the pinch of the economic slowdown. A mere wage freeze is the least public sector unions could do.
It certainly wouldn’t be out of the ordinary. Consider that New Brunswick’s Liberal government introduced a two-year wage freeze last year that affects everyone from their premier down to the employee who cleans his office.
Former Ontario NDP Premier Bob Rae introduced unpaid work days during the 1990s as did former Progressive Conservative Premier Gary Filmon.
It’s not like the public service is starving for jobs either. According to the provincial government’s civil service commission, the number of employees has ballooned from 13,752 in 2005 to 14,625 in 2009 – an increase of 873 positions.
On top of unparalleled job security enjoyed by public sector employees, many studies show that government employees not only earn more in wages, they also enjoy lucrative pension plans; something which has become non-existent in the private sector. According to Statistics Canada, as of 2008, only 21.3 per cent of private sector employees had workplace pension plans compared to 83.2 per cent in the public sector.
Clearly the public sector is not hurting.
Minister Wowchuk has noted that the salaries of health care staff and other government employees cost taxpayers approximately $3.77 billion annually. Should those salaries and benefits grow by 3 per cent or more annually for the next two years (as they inevitably would) that would boost costs by $120 million and $230 million respectively. The savings that would come from freezing salaries would certainly help the government slay the deficit.
A decade of wild spending has finally caught up with the provincial government. They’ll need to make cuts in a number of areas to slay the deficit, but when it comes to staff salaries, the Minister is on the right track. If she’s sincere in doing so, it’s up to us to stand behind her.
