Bashing unionized workers is a growth industry in Canada. Organizations like LabourWatch, the Merit Contractors Association, the Alberta Enterprise Group and the Canadian Federation of Independent Business spend enormous amounts of money to convince politicians and the general public that the biggest threat to economic prosperity is organized labour.
They pour seemingly endless resources into selling the premise that workers banding together to ensure decent compensation, safe working conditions and the assurance of a comfortable retirement is somehow a threat to democracy.
These organizations base a lot of their arguments on "studies" conducted by the Fraser Institute, a hardline right-wing think tank based in Vancouver that gets a lot of financial support from David and Charles Koch, the U.S. oil barons who bankrolled Wisconsin Governor Scott Walker and his crusade to crush unionized public sector workers in his state.
The Fraser Institute's latest salvo in its war on unions is a paper entitled "Comparing Public and Private Compensation in Alberta." Predictably, the paper's authors suggest that if the Redford Tories want to get the provincial budget deficit under control, they must bring unionized public sector workers' pay "in line" with the private sector.
The paper argues that public sector workers in Alberta enjoy a "compensation premium" over the private sector, including 10 per cent higher pay on average and a better retirement plan.
What its authors fail to grasp is that the 10-per-cent pay difference is largely due to the much wider wage gap between men and women in the private sector. It's not that women in the public service are overpaid, the real problem is that too many women in the private sector are getting ripped off by their bosses. Collective agreements and union representation are the best way to ensure equal pay for equal work.
The Fraser Institute paper touches on this, citing a 2010 study that showed men in the public sector averaged 5.4 per cent higher wages than their private-sector counterparts. Women in the public sector, meanwhile, enjoyed wages as much as 20 per cent higher than women in similar positions in the private sector.
Another study by the Canadian Union of Public Employees http://cupe.ca/economics/battle-wages-paid-more-public-private found that while women in the public sector made more than those in the private sector, men in the public sector actually made slightly less than men doing comparable jobs in the private sector. Because the majority of public sector employees are female, CUPE argues, the overall average is higher.
The Fraser Institute's paper is such an obvious distortion of the facts that you really have to wonder, what does it have against women, anyway?
As for retirement plans, the institute and all its patrons love to demonize public-sector defined-benefit pensions as some sort of gold-plated perk, a cash grab from taxpayers. What never seems to get mentioned is that front-line public sector workers pay into these plans out of their own pockets. Government of Alberta employees, for example, contribute 50 per cent of their pension savings.
The Fraser Institute paper also trots out the threadbare trope that public sector unions have taxpayers over a barrel. "Most of the public sector operates as a monopoly, which means there is no threat from competition (unlike private sector companies)," the authors write. "In other words, individuals cannot choose an alternative provider of government services."
But the reality in this province is that public employees can't shut down the government if their contract demands aren't met. Under the Public Service Employee Relations Act, Government of Alberta employees are denied the right to strike. So much for holding the government hostage.
Economist Todd Hirsch http://www.atb.com/learn/daily-economic-comment/Lists/Posts/Post.aspx?ID=269 points out that all Albertans -- private and public sector -- are paid 15 per cent more than the national average, and in fact the public sector "compensation premium" is much narrower in Alberta than anywhere else.
"This is a reflection of Alberta's highly paid labour force--especially for workers in the private sector," Hirsch wrote recently. "Wage competition is fierce throughout the province, and in order for governments to attract and retain qualified workers, they feel they have to pay wages competitive with the private sector."
Here's something to keep in mind whenever you hear these special interest groups railing against public sector pay, using questionable research from dubious sources. They claim they're advocating for average taxpayers, but that's nonsense. These groups represent businesses -- it's in their interest to keep all workers' wages as low as possible. The Fraser Institute exists to help them achieve that.