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Analysis

Federal Public Sector Workers’ Wages No Better Now Than in 2007, New Report Shows

PSAC strike has turned into "political theatre" for politicians, experts say

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Federal public sector workers’ wages, adjusted for inflation, are no better than they were in 2007, a new report from the Canadian Centre for Policy Alternatives shows.

“The average federal public sector worker’s wages only buy the same today as they did in October 2007,” the CCPA report states. “No other industry—none—has seen average inflation adjusted wages pushed back as far as federal public sector workers.”

Over 100,000 federal public workers hit the picket lines across the country on Wednesday with a two-year expired contract and no wage offers that kept up with the rising cost of living.

Even if the union wins its current wage demands of 4.5% increases each year for three years, “those average federal worker wages would still be 4.8 per cent below the industrial average,” the report notes.

“If the government’s position were to win in negotiations, average federal pay would remain 5.8 per cent below the industrial average by the end of 2022.”

Graphic via the CCPA.

Centre for Future Work Executive Director and Economist Jim Stanford explains that while PSAC’s demands have been “pretty modest” given the decline in public sector wages, the strike has become politically charged because political reputations are on the line.

“It’s politically advantageous to look like you’re being tough on “fat cat” public servants,” Stanford told PressProgress.

“A lot of the politicians pose using their own workforce as a kind of a prop, as a way of trying to demonstrate that they’re very prudent and tight fisted. It’s really political theatre in some ways.”

“The claim that public sector workers are better treated than private sector workers is harder and harder to sustain,” Stanford adds.

PSAC’s wage demands aren’t out of line with what other workers have obtained across the country over the last year. In fact, the average Canadian workers’ wages have increased by 5.4% annually according to the most recent Labour Force Survey.

“They’re actually not asking for a raise at all,” Stanford says.“They’re asking to keep their real wages constant, which is a pretty modest demand.”

Public Service Alliance of Canada members on strike at Parliament Hill in Ottawa

Photo: Luke LeBrun (PressProgress)

For example, Ontario construction workers obtained annual wages increases between 3 and 4% when 15,000 workers walked off the job last year – not far from the 4.5% annual raise federal workers want to keep up with inflation.

PSAC President Chris Aylward has said the majority of the union’s members make between $40,000-65,000 annually. Expired collective agreements show many public sector positions within that pay range. The expired agreements also show positions below $40,000 annually, with some as low as $28,000.

Politicians have made a habit of “authoritarian” moves to suppress public sector wages over the last few years, Stanford argues.

Trudeau’s Liberal government broke the Canadian Union of Postal Workers strike over pay equity with back-to-work legislation in 2018, as did the Conservative Harper government in 2011 with a bill later ruled unconstitutional.

Conservative premiers across the country have passed wage freeze legislation for provincial public sector workers over the last few years: Doug Ford capped Ontario public sector wages at 1% percent through Bill 124; Brian Pallister froze Manitoba public sector wages completely for two years with Bill 28; Jason Kenney demanded massive wage rollbacks from Alberta’s public sector over the last several years.

While unions have contested these wage attacks in court, the lengthy legal battles mean these public workers have gone years without any resolution or potential backpay.

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Niall Harney, Senior Researcher for the Canadian Centre for Policy Alternatives, notes Prime Minister Justin Trudeau is likely following bad advice from the Bank of Canada which has blamed rising wages for inflation.

“The Bank of Canada’s line throughout the last two years has been the cost of wages and the cost of labour is what’s pushing inflation. And that has just been patently untrue,” Harney told PressProgress. “That’s never been the reality of what any data shows.”

“What we know now is that, in large part, it’s the profits of especially grocery retailers and oil and gas companies that have pushed the cost of living up dramatically across the country.”

Harney adds that the federal government’s use of “much more aggressive moves” like back-to-work legislation has stymied collective bargaining in the public sector overall – even before inflation began to skyrocket.

“Public sector workers need to start raising their wages to catch up.”

According to Statistics Canada, the Consumer Price Index rose 4.3% in March 2023. Last year, the CPI rose 6.8% on an annual average basis.

 

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Emily Leedham
Reporter
Emily Leedham is PressProgress’ Prairies Reporter. Her reporting has a special focus on workers and communities, big money and corporate influence, and systemic racism.

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