On public sector wages

Commentary by former AUNBT executive member Fred Donnelly in yesterday’s Telegraph-Journal:

On public sector wages
June 9, 2014

In recent times there has been unrest, including strikes and lock-outs, at several of New Brunswick’s public universities. These disputes have taken place within the legal context of the province’s collective bargaining legislation and partly involve efforts of faculty to keep pace with national salary scales for their profession.

In a recent commentary on this situation (Telegraph-Journal, June 5) Fred Hazel made a number of contentious statements with a populist spin.

He asserted that professors’ salaries “come largely from provincial taxpayers and students”. The province of New Brunswick and the University of New Brunswick have published their 2014-15 budgets so let’s introduce some necessary qualifications to that assertion.

In the New Brunswick budget of $8 billion, 36.4 per cent is federal transfer payments, for which we have the wealthier western provinces to thank. Of the remaining 63.6 per cent, only 75.6 per cent comes from taxes, leaving a remainder of 48.1 per cent of the provincial budget derived from taxes.

Some of this goes to public universities and, indeed, University of New Brunswick derives 60.3 per cent of its funding from this source. If the source is evenly distributed, then 48.1 per cent of UNB’s 60.3 per cent comes from taxes, or 29 per cent. Professorial salaries and benefits in turn make up just over half the UNB budget.

While it is true a good portion of university budgets come from student tuition, there is a big difference between a legal requirement to pay your taxes and the choice of an individual to attend university. The two should not be lumped together indiscriminately. No one is forced to attend university or to attend university in a particular province. Moreover a portion of the best students pay down their fees with scholarship monies derived from endowment funds, not their own or the taxpayers’ pockets.

What is offensive about this continued anti-public sector populist mantra is the damage it does to the province. The constant effort to pit private against public sector workers is shamefully divisive and sends a negative message to the effect that some types of employees [teachers, nurses, civil servants, librarians, professors] are second class participants in our economy. If they engage in a labour dispute with their employer, as they are entitled to under our laws, critics play the source of income card, implying that such workers are ungrateful or “unrealistic”. At the same time the Hazelian argument could just as easily be turned against private sector workers. They largely derive their salaries and benefits from the goods and services we purchase from them and, in some cases, government grants to the private sector. Why shouldn’t they also be paid less? Back in the real world of this province, it should be in the economic interest of every New Brunswicker to be sympathetic to wage/salary demands seeking to close the gap between a local group’s remuneration and that in other parts of the country for that type of work. It doesn’t matter whether they are professors or plumbers, private or public sector, or they make more than you do. Consumption now accounts for about two-thirds of a modern economy and if everyone in an area is paid, say, 20 per cent less, then it will be 20 per cent harder to sell goods and services to them. It also encourages an outmigration of our people who will seek higher pay and benefits offered elsewhere. The knee-jerk opposition to public sector pay increases setting one part of the population against another is a variation on the “race-to-the-bottom” policies so attractive to some decision makers. We need to tell our politicians, CEOs and administrators that New Brunswickers will not accept a third-world status within Canada. However well-intentioned, Mr. Hazel’s toxic economic cocktail of misunderstandings, private sector special-pleading and attempts to stoke the fires of divisive politics is very damaging. He is quick to blame a militant union for “frequent” strikes but UNB has had one short strike in 33 years since unionization. His musings feed the mindset that has helped to send yet another generation of our young people away to find work elsewhere.

Fred Donnelly 
is a retired UNB professor.

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Categories: Media, PSE funding