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The Canadian Federation of Independent Business, Part 3

Part 3

Steve: I notice another one of your publications here is "A Comparison of Public-Sector and Private-Sector Wages," and as I look at the graphs-and I haven't read the document here-but it's quite clear that public-sector wages are now higher and are growing faster, increasing faster than those of the private sector, yet it's the private sector that generates the wealth and pays the taxes that pays for the public sector. This is something, again, that has happened over the last twenty or thirty years. Is there any likelihood that you will be able to constrain the growth of public-sector wages and bring more parity back into how people are compensated?

Laura: Well, reports like this one that highlight some of those differences are certainly going to help us do that, because it's embarrassing for governments to try to explain why, for example, in the public sector at the federal level, there's a twenty-three percent compensation premium. In other words, employees at the federal level are paid twenty-three percent more when you include benefits, than equivalent jobs in the private sector. Now, that's something that's embarrassing for people to try and explain, which is exactly why CFIB does this kind of research, so that we can put that out there. In our view, of course, the private sector should be leading the public sector, not the other way around. When you have these kind of wage differentials, there are a couple of problems that come. First of all, of course, the tax bill is higher because we're paying for these higher wages; but second of all, our members are often competing with governments to hire qualified labor, and it's very difficult for a small business to compete when levels of government are offering such generous compensation packages. Now, we'd all like to see wages go up, but the way to accomplish that is to see the economy growing, and then as a result of that you get higher wages. We shouldn't have these kind of wage premiums that mean that we can't have the tax cuts that will allow the economic growth that will allow all wages to go up. Steve: Well, certainly, those of us in the private sector feel that the private sector is the generator of wealth, and that money that is invested in the private sector is a more efficient allocation of the national resources than going into public-sector activities, which are not necessarily required to compete, and therefore, there's no need for them to be efficient and to be competitive. That's not to say that they aren't all-that some of them aren't efficient, but I think Canadians generally have real concerns about the efficiency of their public sector. I think part of the problem, of course, is that the government is one large employer, and therefore they're dealing with one large union, whereas a bunch of small employers, therefore, are in a more competitive situation. So, again, given that kind of a structural difference between the public sector and the private sector, is it realistic to expect that the public sector wages can be-or the private sector wages-or that we can find more of a level playing field? Is that realistic?

Laura: Well, there's no question that it's a tough fight, and it may not be realistic to think that we're going to completely eliminate these kind of wage differentials, but I think by highlighting them, and making these kind of wage differentials public, at least we can start a debate on this. I think it makes it less comfortable for those in the public sector unions to ask for wage increases, and it provides some ammunition to those negotiating the contracts, to say that maybe some of these wage demands are unrealistic. I think, actually, it's really important that you include compensation too, because a lot of the packages come in-very generous vacation plans, dental plans, things that we don't always have in the private sector, so it's important to look at the whole package. This is why, again, it's really critical for small business owners who believe in this kind of thing to join organizations like CFIB, because these are the organizations that are the big voice for small business, and when you're running your business, you don't have time to be lobbying on this kind of thing. Nevertheless, this is critically important to the health of your business, so you join an organization like CFIB. Our strength is in our numbers, and I can tell you we get meetings with all levels of government, we put this kind of information in front of them, and they pay attention, and this is how we're going to get change in this country.

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Part 3

Steve: I notice another one of your publications here is "A Comparison of Public-Sector and Private-Sector Wages," and as I look at the graphs-and I haven't read the document here-but it's quite clear that public-sector wages are now higher and are growing faster, increasing faster than those of the private sector, yet it's the private sector that generates the wealth and pays the taxes that pays for the public sector. This is something, again, that has happened over the last twenty or thirty years. Is there any likelihood that you will be able to constrain the growth of public-sector wages and bring more parity back into how people are compensated?

Laura: Well, reports like this one that highlight some of those differences are certainly going to help us do that, because it's embarrassing for governments to try to explain why, for example, in the public sector at the federal level, there's a twenty-three percent compensation premium. In other words, employees at the federal level are paid twenty-three percent more when you include benefits, than equivalent jobs in the private sector. Now, that's something that's embarrassing for people to try and explain, which is exactly why CFIB does this kind of research, so that we can put that out there. In our view, of course, the private sector should be leading the public sector, not the other way around. When you have these kind of wage differentials, there are a couple of problems that come. First of all, of course, the tax bill is higher because we're paying for these higher wages; but second of all, our members are often competing with governments to hire qualified labor, and it's very difficult for a small business to compete when levels of government are offering such generous compensation packages. Now, we'd all like to see wages go up, but the way to accomplish that is to see the economy growing, and then as a result of that you get higher wages. We shouldn't have these kind of wage premiums that mean that we can't have the tax cuts that will allow the economic growth that will allow all wages to go up. Steve: Well, certainly, those of us in the private sector feel that the private sector is the generator of wealth, and that money that is invested in the private sector is a more efficient allocation of the national resources than going into public-sector activities, which are not necessarily required to compete, and therefore, there's no need for them to be efficient and to be competitive. That's not to say that they aren't all-that some of them aren't efficient, but I think Canadians generally have real concerns about the efficiency of their public sector. I think part of the problem, of course, is that the government is one large employer, and therefore they're dealing with one large union, whereas a bunch of small employers, therefore, are in a more competitive situation. So, again, given that kind of a structural difference between the public sector and the private sector, is it realistic to expect that the public sector wages can be-or the private sector wages-or that we can find more of a level playing field? Is that realistic?

Laura: Well, there's no question that it's a tough fight, and it may not be realistic to think that we're going to completely eliminate these kind of wage differentials, but I think by highlighting them, and making these kind of wage differentials public, at least we can start a debate on this. I think it makes it less comfortable for those in the public sector unions to ask for wage increases, and it provides some ammunition to those negotiating the contracts, to say that maybe some of these wage demands are unrealistic. I think, actually, it's really important that you include compensation too, because a lot of the packages come in-very generous vacation plans, dental plans, things that we don't always have in the private sector, so it's important to look at the whole package. This is why, again, it's really critical for small business owners who believe in this kind of thing to join organizations like CFIB, because these are the organizations that are the big voice for small business, and when you're running your business, you don't have time to be lobbying on this kind of thing. Nevertheless, this is critically important to the health of your business, so you join an organization like CFIB. Our strength is in our numbers, and I can tell you we get meetings with all levels of government, we put this kind of information in front of them, and they pay attention, and this is how we're going to get change in this country.