Despite the economic slowdown, most big public sector unions in Manitoba will not only see continued job security and increases to their salary during the uncertain times ahead, they’ll likely see pay hikes above the rate of inflation.

 

Consider the case of the Pembina Trails School Division. They recently signed an agreement with their teachers union giving teachers a 3 percent increase in salary and a $250 bonus next year. Considering the provincial government forecasts the inflation rate to be 0.6 percent for 2009, 3 percent is a huge increase. Unfortunately for most private sector employees, they tend to see wage increases consistent with the inflation rate. 

 

However, it doesn’t end there. Most big public sector unions, including teachers’ unions, have negotiated ‘steps’ for different job classifications. For example, in the Pembina Trails school division, a ‘class 5’ teacher (one with an under grad degree and a bachelor of education) will automatically progress through ten pay levels over a ten-year period. Regardless of merit, extra-curricular efforts or student outcome, teachers with more years of work automatically get paid more than teachers who have put in less time.

 

A first year, ‘class 5’ teacher in that division will earn $48,459 this school year while a second year ‘class 5’ teacher will earn $51,188. That works out to a 5.6 percent year-over-year increase. However, don’t forget about the 3 percent increase that the union negotiated and the $250 bonus.

 

When it’s all said and done, a second-year class 5 teacher will earn $52,020 next year – a 7.3 percent increase in just one year. If you’re finding the numbers hard to believe, go on the Pembina Trails Division’s website and look at the teachers’ union contract in the ‘staff’ section.

 

Nurses, firefighters, police officers, CUPE employees and most other big public sector unions all have similar steps and provisions in their contracts.

 

For a more global example, consider a 2007 City of Winnipeg report. It noted that although the number of city staff decreased from 1995 to 2006, the amount spent on salaries and benefits increased by $20-million above the rate of inflation.

 

Adding to the problem is the fact that public sector unions use each others’ gains to leverage even more out of taxpayers. Undoubtedly, the teachers union will use a favourable contract decision in one division when negotiating with other school divisions. Similarly, the Manitoba Nurses Union will point to what nurses are receiving in other provinces. Eventually another province will point to what Manitoba nurses receive. This vicious game of ‘public sector leap frog’ ultimately costs taxpayers millions of dollars each year.

 

So what’s the solution? First of all, public sector employees deserve a fair salary. No one would question that. However, the current approach completely ignores performance. Wherever possible, employees should be hired individually and paid based on the results they deliver for taxpayers. 

If you ask any school principal, fire chief or hospital administrator, they could likely pick out their best employees. Why couldn’t such managers be given reasonable funding each year to pay their employees based on performance? Many managers in the private sector do just that every day.

 

One thing is for certain, public sector unions getting generous and automatic pay hikes while the people who pay the bills aren’t, is neither affordable nor appropriate.