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Analysis

The Fraser Institute Wants Doug Ford To Reduce Ontario Workers’ Wages

Right-wing think tank argues Ontario could ‘reduce costs’ by paying public sector workers lower wages

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According to a new report from the right-wing Fraser Institute, Doug Ford hasn’t gone far enough in reducing public sector workers’ wages.

In the report, titled “Comparing government and private sector compensation, 2023 edition,” the right-wing think tank argues that Ontario could “reduce costs” by simply paying public sector workers lower wages.

According to a press release introducing the right-wing think tank’s report:

“At a time when governments are facing serious fiscal pressures, bringing government sector compensation in line with the private sector would help reduce costs without necessarily affecting services.”

The Fraser Institute’s report itself compares public sector workers’ wages with workers in the private sector. After adjusting for differences such as age, education, type of work, and other factors, the right-wing think tank concludes public sector workers earn only about 10% more on average than private sector workers.

But the Fraser Institute suggests Ford can also find other ways to reduce costs by taking a closer look at “generous non-wage benefits,” a category lumping in everything from “job security” and “unionization” to pensions and sick days.

Randy Robinson, Director for the Canadian Centre for Policy Alternatives’ Ontario Office, has doubts about the right-wing think tank’s claims.

The Fraser Institute’s report leaves out a key point, which is that private sector employers pay some workers “far too low,” Robinson told PressProgress.

“Past research we’ve published has shown no public sector pay premium for workers above the median income,” Robinson said. “The difference is all at the bottom end. Wages for low-wage workers are far too low in the private sector — that’s why there’s a difference.”

“Workers in low-wage occupations, who are disproportionately female and racialized, are better paid in the public sector than they would be in the private sector.”

Living wage calculations in the Greater Toronto Area show workers need to make at least $23 per hour to meet basic needs. Three years after cancelling a minimum wage increase from $14 to $15, Ford raised the minimum wage in Ontario to $15.50 on October 1, a move labour groups called an election ploy.

PressProgress is an award-winning non-profit news organization that uncovers and unpacks the news through original investigative and explanatory journalism.
Here is why you can trust our journalism ➔
PressProgress is an award-winning non-profit news organization that uncovers and unpacks the news through original investigative and explanatory journalism.
Here is why you can trust our journalism.

Robinson also disputes the Fraser Institute’s claim that the government is under “serious fiscal pressures.”

“There is no fiscal crisis,” Robins says. “At the provincial level in Ontario, the government’s financial picture is stable.”

Strong economic recovery from the pandemic and high inflation means Ford has more than enough revenue to pay workers fairly, Robinson explains.

Despite this, Ford has spent the last several years trying to drive down public sector wages through Bill 124, which caps annual wage increases for public sector workers at 1%.

The Ontario Superior Court recently declared Bill 124 unconstitutional. The Ford government appealed the court’s decision, despite knowing the bill contributes to Ontario’s health care staffing crisis.

Patty Coates, President of the Ontario Federation of Labour, says driving down wages further will only exacerbate the healthcare crisis.

“Caps on public sector wages negatively impact public services – plain and simple. We are seeing it clearly with Bill 124’s impact on the health care crisis here in Ontario,” Coates told PressProgress.

JP Hornick, President of the Ontario Public Service Employees Union, says the Fraser Institute’s report indicates the private sector should instead pay its workers more.

“CEOs made record incomes in 2021 and profits are at a 60 year high,” Hornick told PressProgress. “Perhaps the private sector might consider paying a living wage?”

“Enough is enough!”

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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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