Opinion

Hey there, time traveller!
This article was published 06/07/2009 (5075 days ago), so information in it may no longer be current.

In the midst of a long, hot, stinky Ontario summer, our good friends at the Canadian Federation of Independent Business are doing their best to stir up a lynch mob.

The country’s largest city, Toronto, is currently gripped by a sanitation workers’ strike that has everyone on edge. Against this backdrop, the CFIB last week suggested there is a growing backlash against public-sector employees who enjoy wages and benefits that are far in excess of what is paid in the private sector.

In its annual report on the public-private sector wage gap, the CFIB argued the spread between public- and private-sector jobs can be as much as 17 per cent; when pension is added into the equation, the spread becomes as much as 30 per cent. The CFIB believes the public sector is (over)paying its employees by $19 billion, an act of largesse that drives up taxes and cripples business owners.

“That really is going to be very divisive for our society,” Judith Andrew, Ontario vice-president of the Canadian Federation of Independent Business, told the National Post. “It’s like reverse Robin Hood. Why should people with modest pensions be having to pay very onerous taxes to top up these rich pensions for… public servants?”

At a time when the garbage is piling up in parks and school parking lots, it’s quite opportunistic to suggest that public-sector workers are “stealing” from taxpayers. But to the CFIB, government wages are inappropriate and unsupportable.

With it’s timely campaign against sanitation workers, the CFIB gets top marks for marketing. Unfortunately, it gets a failing mark on economics.

To buy into the CFIB argument that public-sector wages are overly generous, you’d have to accept that the lower private-sector wages it espouses provide workers with a real living. And that’s just not true.

Minimum wage-earning Canadians are falling further and further behind in their desperate bid to keep up to the cost of living. To use the most hackneyed of expressions, the rich are getting richer and the poor are not only getting poorer, they are growing in numbers. If there is an argument for tax relief, it is at the bottom-most rungs of the income tax system.

It has always seemed odd that the CFIB has chosen to attack public-sector workers rather than support measures that help their own employees keep more of the spartan wages they earn. In the long run, by pushing politicians to pay government workers less, they are simply draining wealth out of the economy that could be used to purchase the goods and services flogged by CFIB members. Henry Ford knew what he was talking about when he theorized that more generous wages ultimately helps business.

The other macro-economic force the CFIB seems to ignore is that minimum wages are not only bad for society, it’s bad for business in a whole host of ways. The CFIB is clearly unaware that the country’s top private-sector employers do not pay minimum wages because it’s a penny-wise, pound-foolish way of doing business.

In general, top employers use industry-leading wages, above-average retirement benefits, enhanced health and wellness programs and more generous vacation and parental leave to get to where they are today, which is at the forefront of their sectors.

These companies know that happy employees are less likely to leave, are less likely to be tardy or chronically absent and are generally more productive than those who are paid at the bottom of the pay scale and have few other benefits. That all adds up to a more profitable company.

The CFIB wants government to pay its employees less and provide less generous retirement benefits, so that business taxes of all kinds can be reduced. The CFIB may suggest lower taxes would allow their members to provide more generous wages and benefits. And there’s probably some truth to that.

However, despite the onerous tax burden the CFIB is constantly whining about, it seems many companies already provide better pay and benefits. And rather than putting them at a disadvantage, it makes them more profitable.

The CFIB is trying to enrage Torontonians by exploiting their frustration with city sanitation workers. It’s a cynical ploy designed to distract us from the real issue: What exactly is a fair wage?

Private-sector workers may take the CFIB’s bait and focus all of their fear and frustration on those working in the public sector. Or they may begin to ask their private-sector employers why they aren’t getting a better deal.

dan.lett@freepress.mb.ca