4/23/12

Concession demands grow -- as Ontario economy grows

The Ontario government opened with the idea of a compensation freeze for public sector workers -- but now they appear to be calling for concessions. The Globe reports today that they simply demanded teachers accept a pay freeze for two years, no movement within the existing salary grid, and an end to retirement payouts for unused sick days.  


This while the Ontario economy continues to grow -- as it has since the latter part of 2009.  

Real growth of the Ontario economy over the first two years of the CUPE central hospital collective agreement (from the fall of 2009 to the fall of 2011) was 5.5% according to Ontario government figures.  Growth in terms of nominal dollars (i.e. growth including inflation) was 9.8%, with the economy growing from $582.2 billion to $639.4 billion. Workers wages, are, of course, paid in nominal dollars -- and have not increased at that rate in the hospital sector or elsewhere.

Over the calendar years 2009, 2010, and 2011 inflation increased 6%, exactly the same as the general wage increases for those years in the CUPE central agreement. For 2012, the Ontario government estimates inflation at 1.7% (half a percent lower than it's current annual rate of 2.2%).

TABLE 2.6 Ontario Economic Outlook
(Per Cent)

2009
2010
2011
2012p
2013p
2014p
2015p
Real GDP Growth
(3.2)
3.0
1.8e
1.7
2.2
2.4
2.5
Nominal GDP Growth
(0.9)
5.3
4.2e
3.4
4.1
4.2
4.3
Employment Growth
(2.5)
1.7
1.8
0.9
1.3
1.5
1.6
CPI Inflation
0.4
2.5
3.1
1.7
2.0
2.0
2.0
e = estimate. p = Ontario Ministry of Finance planning projection.
Source: Ontario Budget 2012, Table 2.6

Given the recession in 2009, total real economic growth over the calendar years 2009, 2010, and 2011 is estimated at only 1.5%, with another 1.7% estimated for 2012 (or 3.23% over the four years).  Nominal growth over 2009, 2010, and 2011 was estimated at 8.7%, with another 3.4% expected in 2012 (or 12.4% in total). These growth figures are a little worse than the first two years of the hospital agreement as they include most of the 2008/9 recession (which ended just as the hospital agreement began). 


The Ontario government is projecting economic growth in the period ahead. It estimates 1.7% growth in 2012, 2.2% in 2013, 2.4% in 2014 and 2.5% in 2015.

These growth estimates tend to be slightly lower than the government’s estimates in the fall of 2011. Private sector forecasts are slightly higher than government forecasts, but have also tended lower.


The Ontario 2012 Budget also reports that corporate profits increased 19% in 2010 and estimates a further growth of 13.8% in 2011. Corporate profits are estimated to increase a further 4.0% in 2012 and 4.6% in 2013. (This, of course, follows sharp declines in profits during the recession.)


Any way you slice it, the economy is growing -- and someone is getting that benefit.   But it is not workers.  CUPE hospital workers have kept up with inflation -- but only just.  And many other workers, in the public sector and private sector, have done worse.
  

4 comments:

  1. "Over the calendar years 2009, 2010, and 2011 inflation increased 6%, exactly the same as the general wage increases for those years in the CUPE central agreement."


    While I support unions, I have to point out my hubby and I worked for over 40 years...never for a union (unfortunately). Retired now, I can assure you we don't make a 6% increase in our income each year....not close. I wish the unions would find a way to support increases to those not fortunate enough to work in a unionized environment.

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  3. Thanks for your comment.

    I should note, however, that the CUPE central agreement only allows 2% annual increases in 2009, 2010, and 2011, not 6%.

    I agree that union's need to work with non-unionized workers to help improve their pay. OCHU has done a lot of work lately with the Ontario Coalition Against Poverty. The joint campaign has garnered significant media attention regarding the dire situation of the poor. But, no doubt, more needs to be done....

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  4. I understand, but that's 2% more than we are getting.

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