SUN COLUMN: Why government employees may want to ask for a pay cut
SecondStreet.org recently asked governments across the country a simple question – when was the last time you cut pay for your employees?
The question followed many news stories in Canada about businesses struggling during the pandemic and having no choice but to cut employee pay – movie chain Cineplex, the Winnipeg Free Press, Chrysler, Canadian Football League teams, energy giant Cenovus and countless others.
But why weren’t there any headlines about government employees taking a pay cut?
Aren’t we all supposed to be “in this together”?
In fact, a pay cut would actually be in the best interests of government employees (more on that in a moment).
SecondStreet.org posed the pay cut question to the federal government, all ten provinces and 13 major cities. Incredibly, their responses ranged from decades ago to never.
The federal government informed SecondStreet.org they have “no data or any information that indicates that there has ever been a negotiated pay reduction.”
Quite the opposite has occurred. Research from the Canadian Taxpayers Federation shows over 312,000 federal employees actually received pay increases since the pandemic began. Some of those increases were even negotiated after the pandemic began.
Provincially, it has been decades since government employees took a pay cut. While many provincial governments cut employee pay, or reduced their hours during the 1990s, such measures have been almost non-existent over the past two decades.
The only major example of governments reducing employee earnings occurred in Manitoba in 2020 when the government required employees to take five unpaid days off. However, had Manitoba implemented a true pay cut the employees would have worked the same number of hours, but for a lower pay rate.
At the city level, we haven’t been able to locate any evidence of governments cutting pay. Ever.
Consider Calgary, a city that has struggled immensely for over the past five years. Data provided by the city dates back to the 1970s – no pay cuts over the past 50 years.
In Mississauga, four library positions will see a reduction in pay. The catch is that current employees aren’t affected – future hires for those positions will simply start at a lower amount.
To recap, millions of government employees were covered by our requests, no pay cuts.
So why on earth should government employees support a pay cut? Because a pay cut is better than being laid off.
Note that the federal government, and provincial governments right across Canada, are spending more than they’re taking in right now in revenues. Cities are facing financial pressures too. The status quo is simply not sustainable. Something has to give.
Typically, governments either address these situations by raising taxes or cutting services to address their financial shortcomings.
More tax increases right now would be toxic – countless businesses and families are already struggling. Tax increases would drive up unemployment and cause all kinds of social problems.
That brings us to service cuts – a measure which inevitably includes layoffs. Do government employees really want to face layoffs during such uncertain times?
Taking a 5 or 10 per cent pay reduction is far more appealing than the alternative – no income. Just ask those outside of government who have been laid off.
Colin Craig is the President of SecondStreet.org, a new Canadian think tank. You can reach him at email@example.com or follow him on Twitter (@colincraig1).
This column was published by Sun newspapers (Toronto, Ottawa, Winnipeg, Calgary and Edmonton) on October 15, 2021.
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