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Workers' increases less than 1/2 of economic growth

Amidst all the hysteria over public sector wages (Tim Hudak has again demanded a wage freeze for public sector workers) it is useful to ask if public sector workers are taking more than their fair share of the economic growth in Ontario --or if they are falling behind.

OCHU's comments to the Don Drummond Commission on public sector reform in Ontario, reviews just that question and finds that since 1995 hospital wages have risen less than half as quickly as the nominal growth in the economy.

Wages are paid in "nominal dollars": they are not, unfortunately, protected against inflation.  So you might have a higher dollar wage than you did ten years ago, but if inflation has increased more rapidly than your wage, you are actually less well off.  As a result, the comparison between "nominal wages" and "nominal growth" (economic growth including inflation) is appropriate.  Are the nominal dollars we are paid keeping up with the nominal growth in the Ontario economy?

In fact since 1995 nominal hospital wages have gone up 42.6%, while nominal growth has gone up 96.9%.  Growth has more than doubled our wage increase.

Somebody is getting all that extra dough, but it ain't hospital workers.

And the story is similar for most other public and private sector workers as well.

Growth continues apace (the Ontario Ministry of Finance predicts 4% nominal growth this year and about the same for 2012 through 2014).  Hudak's proposal would ensure that somebody else gets all of that, while public sector workers get none.

It's no mystery where all that extra is going.  Inequality has grown rapidly over the last few decades and our ruling elites seem determined to continue this.

All the comments from OCHU to the Drummond Commission can be found by clicking here for the full brief  on the CUPE web site.
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  1. AnonymousDecember 19, 2011 at 11:23 AM

    Everyone should do their part from top to bottom. Do your part and take a wage freeze.

    We really are all in this together and if each side refuses to give an inch, we are in this ever escalating high cost of living, without either side refusing to budge an inch. Each side should show a little good will. There is a whole segment of society that is not rich and also not covered by union wages that are caught in the middle wondering how they are going to survive.
    Pat

    ReplyDelete

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