Public Services are Essential to Our Economy
Feb 19, 2010
The Manitoba government recently announced that it would be introducing a wage freeze of two years for public service employees. In response, the Winnipeg Free Press published an editorial on February 18 that agreed with this position. It relied on a study by the Canadian Federation of Independent Business to support its argument. In response, Peter Olfert sent the following letter to the Winnipeg Free Press:
February 18, 2010
I am compelled to respond to the editorial “Pause and Reflect, Mr. Olfert”.
I have consistently said that when the economy is in recession or sluggish we need to invest in public services. These services not only comprise salaries and programs run by Government departments, but also include investments in capital projects. If the government had not invested in floodway expansion, the new Hydro building, massive highway and bridge construction, the Human Rights Museum and others, Manitoba would have suffered higher unemployment rates and a larger deficit.
For the record, I do not as the Editors seem to imply, consider the word "profit" a dirty word or dirty work.
I am always amused by groups like the Canadian Federation of Independent Business who believe there is only one part to our economy (the private sector). In fact, there are two engines that drive the economy: the public and private sectors. The CFIB forgets that most public dollars spent on large construction projects in the last number of years were given to private sector construction companies who in turn employed private sector employees and provided profits for these same companies.
As for the CFIB “study” that found huge wage and benefit gaps between private sector and public sector employees, the methodology used would not be accepted in a second-year economics course and, in effect, it essentially manufactures results. Their assumptions are based on Statistics Canada research that compares all employees; the benefits of highly qualified public employees are compared to the benefits earned by minimum wage workers in retail or fast food restaurants. This is apples and oranges. The CFIB also do not factor in key elements like education and experience, which are factors considered by every employer in Canada when determining wage levels.
The CFIB study contradicts every serious academic study on this subject but it does serve one useful purpose: it confirms the CFIB’s longstanding biases and should be treated as unsubstantiated propaganda.
- Peter Olfert
MGEU President
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