Job cuts in the public sector will hurt economy

Herald editorial ignored the facts, says Gil McGowan

Your editorial (“Unions overlook runaway costs,” June 27) was heavy on opinions, but light on facts.

Nurses, teachers, and health-care professionals have all taken two years of zero salary increases through recent negotiations. And those zeros come on the heels of a meagre 1.75 per cent increase in 2016.

The argument that public-sector workers should “share the pain” felt by workers in the private sector during the recent recession also ignores the fact that they didn’t “share the gain” of private-sector workers during the oil boom of 2004-2014. At the height of the last boom, the private sector experienced an astonishing 6.2 per cent yearly growth in average weekly earnings, with oil and gas exceeding even 6.5 per cent. In the same period, a registered nurse got a pay increase of three per cent, while teachers got two per cent.

Right now, the average hourly wage rate for forestry, mining, oil and gas extraction is $44, $14 higher than the Alberta average. Workers in educational services make an average of $33.90 an hour. In health care and social assistance — the bulk of the public sector — the average wage is $31.50.

It’s nothing more than a pernicious myth that public-sector workers are fat cats compared to private-sector workers. In 2011, the average public-sector worker in Alberta made $62,340, the private-sector average was $62,750. Since then, private-sector wages shot up with the boom, while public-sector wages grew more modestly.

And even with the recession, Alberta’s private-sector wages have remained robust relative to other provinces. Multiple studies show there is little difference in average compensation between private- and public-sector workers, and that where a difference exists, it is largely because the public sector has a smaller pay gap for women.

But calling for cuts to public-sector jobs and wages as Alberta recovers from a deep recession isn’t only unfair to the workers in question; it’s also unwise from an economic point of view. It is precisely because Alberta is facing a fragile economic recovery that cuts to publicsector jobs and wages should not be made.

Laying off a nurse or a teacher won’t bring back jobs for unemployed drillers or pipefitters. What it will do is increase the number of unemployed Albertans and shrink the economy by weakening overall consumer purchasing power — in other words, fewer people spending fewer dollars in Alberta businesses, exactly when we need people spending more.

Then there’s the matter of who works in our public sector. Public-sector jobs skew heavily toward women, particularly in education and health-care fields. So, not only is an attack on the public service an attack on women, but in many cases, the woman’s public sector salary has kept the family afloat during the recession when the man lost his private sector job.

So, cutting public-sector wages during a recession will actually hurt the very families that conservative budget-cutters say they want to protect.

Finally, the editorial missed the fundamental point of the Alberta Federation of Labour’s Next Albert campaign: Alberta is facing a global energy transformation. Fracking in the U.S. has turned our biggest customer into our biggest competitor while driving down oil prices. Oil and gas companies are responding by automating away jobs. At the same time, the world has started the process of moving away from fossil fuels: our key export.

All of these trends add up to the biggest economic challenge ever faced by our province.

What does this have to do with public sector spending ? Lots! In order to prepare ourselves for these tectonic economic shifts, we need to ramp up investment in things like education, infrastructure and diversification. If we don’t, we won’t be prepared to manage the threats and seize the opportunities presented by the energy transformation.

In this light, deep public-spending cuts are literally the last thing we need at this moment in our province’s history.

Laying off a nurse won’t bring back jobs for unemployed drillers or pipefitters.