Feb 28, 2011

The Frontier Centre’s dubious numbers about public sector wages


As if the Fraser Institute needed any help getting its message in the media, there are now a number of Fraser clones that are preaching the same message.  One of those clones, Winnipeg’s Frontier Centre for Public Policy, has gotten a lot of ink in the last few weeks with a report arguing that salaries for public employees have been going through the roof in the last decade.

The report showed up in a front page editorial in the Vancouver Sun under Barbara Yaffe’s byline.  It has been covered in other of the chain’s papers and the National Post. 

The Frontier paper argues that public sector wages have grown much more quickly than average wages since 1998.  It turns out that is true.  For public employees in Canada as a whole, wages rose by about 46% between 1998 and 2009.  Average wages rose by 30%.

But before you get out your tar and feathers and start looking for fisheries inspectors, park rangers and meter readers, there are a few other numbers you might want to consider.  It turns out the Frontier study gets its results by choosing the right dates, ignoring some elements of the data and by ignoring the comparison between unionized workers in the public sector with unionized workers in the private sector. 

First of all the data series Frontier uses was started in 1991.  If you use 1991 as the date for comparison, instead of the 1998 date Frontier chooses, the 16% advantage for the public sector falls by about half.  If you take overtime pay out of the equation, the advantage for public service work virtually disappears. 

The 1990s were a tough decade for public employees.  Governments across the country balanced their budgets at least partially by freezing public sector wages and cutting staff.  So with cuts in staff it is not surprising that more overtime pay resulted.  And of course, it is the employer who decides on overtime, not employees.

Yes, there was catch up in the last decade, but public employees as a whole only caught up to where they were 20 years ago. 

Frontier chooses not to compare changes in incomes of unionized public sector workers with unionized private sector workers.  Here in BC if you compare unionized workers in the public and private sector you will find that private sector union members have done far better than those in the public sector.  In one year public sector wages in BC actually fell by more than 3% when the government fired 10,000 women who worked in hospitals and replaced them with private sector workers making barely more than the minimum wage. 

What else does Frontier stand for?  They want to cut taxes, undermine unions (it’s called flexibility), sign more and tougher trade deals and slash government regulations.  As I said earlier, they are a Fraser Institute clone.  They get most of their money from foundations, including the Donner Foundation, the sugar daddy of Canada’s right wing.

But the Fraser institute and its clones are popular with newspapers in Canada.  How popular you ask?  The Vancouver Sun even reprinted an editorial from the Calgary Herald attacking a response by the Professional Institute of the Public Service (PIPS) to the Frontier study. 

Unfortunately, however, they didn’t even bother to print the PIPS letter on the subject.