Thursday, January 26, 2012

Rumblings of public-sector wage restraint

Last week, a University of Calgary study on public-sector wage increases made headlines. This week, the premier is musing about public-sector wage freezes in the midst of collective bargaining that doesn’t appear to be going in the direction the government wants.

An interesting corrective to the notion that public-sector wages in Alberta are rising twice as fast as the national average can be found here. In fact, Alberta public-sector wages are rising at roughly the rate of inflation (just like most other provinces)—it is the overall wage bill that is growing quickly.

Among the factors driving this are executive perks that few public sector employees see. One observer has suggested that the authors did not account for the effect of inflation on earnings growth (i.e., they are not using constant dollars) which, consequently, overstates the growth quite significantly .

-- Bob Barnetson

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