VANCOUVER: Public sector workers are in the midst of difficult contract negotiations with the BC government to ensure wages keep up with inflation. However, according to Canadian Centre for Policy Alternatives, “ the government hasn’t been willing to come to the table with an offer that reflects the rising cost of living.”
Over the past two decades, BC governments have underestimated the budgetary resources available to them, which is again evident as they negotiate with public sector workers, senior economist Alex Hemingway says.
“These are workers who have been keeping critical services and institutions running through the pandemic and they deserve a fair deal that the BC budget can well afford,” Hemingway says.
Continuing to hold public sector wages down would mean eroding the standard of living for these workers, as well as undermining the recruitment of teachers, health care workers and early childhood educators, among many others. It would do little to ease key inflation drivers like the housing shortage, international oil prices and food supply shocks.
Hemingway says decent public sector raises can be accommodated in BC’s budget as it projects moderate but declining deficits over the next three fiscal years. These estimated deficit levels are already economically manageable and there is reason to believe they may turn out to be substantial overestimates, he adds.
“This practice of budget lowballing has played out in all but four of the past 20 years, creating a systematic bias against public spending and distorting democratic debate about BC’s budgetary priorities,” Hemingway says.
According to Hemingway , “Over the past two decades, BC governments (regardless of their political stripe) have developed a habit of underestimating the budgetary resources available to them. This is an intentional effort to “under-promise and over-deliver” by achieving smaller deficits (or larger surpluses) than projected. In the past two years, deficits have been roughly $7 billion and $9 billion smaller than projected, respectively (and when the numbers are finalized for the most recent year, this gap will likely grow).”
This practice of budget lowballing has played out in all but four of the past 20 years, creating a systematic bias against public spending and distorting democratic debate about BC’s budgetary priorities.
Hemingway in his article published on Policy note wrote that the bottom line is that a fair pay increase for public sector workers could be easily covered by the $16.2 billion in contingency and forecast allowances. “But this doesn’t tell the full story of the additional economic and fiscal capacity that BC has available—capacity that could be put towards both decent pay for workers and increased investments in a range of urgent social and environmental priorities, such as tackling the housing crisis, strengthening our education system, investing in health and seniors care, expanding public transit, ending toxic drug deaths and raising income assistance rates, among others.”
