Municipalities must act to keep escalating labour costs down – and prevent a “whipsawing” effect in which raises at the civic level of government are used as a precedent to justify raises at the provincial level, and vice-versa.
That was the pre-municipal election message that Jordan Bateman, B.C director of the Canadian Taxpayers Federation, delivered to members of the South Surrey White Rock Chamber of Commerce at its luncheon last Thursday.
No doubt mindful that he was addressing an audience that included two hopefuls in Surrey’s mayoral race (Couns. Linda Hepner and Barinder Rasode) as well as Surrey-White Rock MLA Gordon Hogg – Bateman included a pitch for one of the federation’s pet projects, a Compensation Equity Act.
“Could you legislate a way to make it illegal to pay public-sector employees more (for the same work) than those in the private sector?” he asked.
He suggested that having professional negotiators party to contract talks would be key in reducing the upward leap in municipal labour costs. (A petition for such legislation at the CTF website suggests salary caps for executives and classing pensions as deferred income.)
Referring frequently to a recently leaked Ernst & Young report that was commissioned as part of the provincial government’s core review process (see sidebar), the former two-term Langley Township councillor said it showed municipalities throughout B.C. are overpaying staff in comparison to provincial and private employees.
Prominent among municipal election promise clichés Bateman cited (“I’ve run on all these myself,” he confessed) is ‘keeping taxes low.’ He said addressing labour costs was one way to accomplish this.
“It’s very boring and unsexy to explain how you’re going to have fiscal restraint, but it’s absolutely vital,” he said. “The number-one cost for cities is labour – it’s not uncommon to spend two-thirds of the budget (on it).”
Bateman said that even figures going back to 1971 show government employees made seven per cent more than equivalent employees in the private sector.
“It used to be that if you’d go to work for a municipality you’d expect to make a little less up front, but you’d get a pension and benefits,” he said.
Now, he said, it appears the disparity between private and public runs between eight and 17 per cent – “CUPE said it’s only one per cent, while the Fraser Institute said it’s 13.6 per cent.”
The report indicates that between 2001 and 2012, municipal compensation jumped 38 per cent. In contrast, provincial core government service employees have had an increase of 19 per cent in wages – “a bit less than the 23 per cent rate of inflation” – while Crown corporation employees have received a 25 per cent increase.
In local terms, Bateman pointed out, over the same period the number of employees making $100,000 or more in the City of White Rock has risen to 24 – an 85 per cent increase, while Surrey now has 203 staffers topping that salary level – a 173 per cent increase.
Bateman’s critique extended to corporations – TransLink in particular. He noted that corporation executives received hefty pay increases in the form of “benefits and bonuses” during a 2013 pay freeze.
“Only in TransLink’s crazy world would a pay freeze mean a pay increase,” he said.