9/27/12

Are public sector cuts 'tame' compared to private sector?

Dwight Duncan claimed yesterday that compared to the belt-tightening endured by workers in the private sector, his legislation restricting collective bargaining in the public sector "is tame stuff".

Sounds like a claim worth investigating.

Wages are the most important single item bargained -- for both workers and employers. So it's a pretty good way to compare outcomes for different sorts of workers.

According to Ontario Ministry of Labour own data, public sector and private sector workers have done about the same in collective bargaining. In 2010, private sector annual wage settlements averaged 2.0%, while the public sector averaged 1.9%. In 2011, the private sector averaged 1.9% versus the public's sector's 1.6%. So far this year (January through July) both public sector and private sector have averaged 1.7%.

Compounded, the private sector is actually 0.4% ahead of the game.

Duncan, perhaps might claim that if you went back more than the last two years seven months, a different picture might emerge.  And true enough, the private sector did worse than the public sector for eight out of the ten years from  2000 through 2009.  But the public sector did worse than the private sector eight out of ten years  from 1990 through 1999.

So, taking the longer term into consideration, it's about a wash.

This, of course, says nothing of the blessed few earning a salary. As reported many times here, they are doing much better. This year and next they are projected to get 2.7% average increase. The salaried class did even better in 2011.

 


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