Wage increases secured by striking workers shouldn’t be seen as ‘fat cat’: experts

Labour experts say the wage increases the country’s largest federal public-sector union secured Monday are far from the hefty gains some might perceive them to be.

The experts say the 12.6 per cent wage increase over four years brings the salaries of 120,000 striking workers represented by the Public Service Alliance of Canada more in line with the annual inflation rate, which peaked at 8.1 per cent in June last year before sliding to 4.3 per cent in March this year. The union has said inflation has pushed the cost of living up by 11 per cent since 2021, the year its collective agreement expired.

The deal offers as little as a 1.5 per cent increase in one year and as much as 4.75 per cent in another, but Jim Stanford, an economist and director at the Centre for Future Work, argues it shouldn’t be seen as “fat cat” because average wages are growing at more than five per cent a year in Canada.

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“This cannot be described as a gold-plated public sector wage deal. It’s far from it,” he said.

“In fact, the wage increases in this I would say are modest given the times.”

The majority of the striking workers that were on strike since April 19 a group which includes staff at the Canadian Transportation Agency, Global Affairs Canada and Immigration, Refugees and Citizenship Canada earn between $50,000 and $75,000. About three per cent earn less than $50,000.

If the deal is ratified, the 12.6 per cent increase will also come with a one-time, pensionable lump sum payment of $2,500 that represents an additional 3.7 per cent of salary for the average union member in Treasury Board bargaining units.

The gains do not apply to 35,000 Canada Revenue Agency employees, who are still on strike as a separate agreement is negotiated for them.

However, Charles Smith, a political studies professor with the University of Saskatchewan, pointed out the offer the rest of the workers received is less than the 13.5 per cent the union originally sought but higher than the nine per cent the federal government was once offering.

“It still has not matched inflation at its current rate, but it’s much closer than it was in the initial offer,” he said of the wage increase.

“But what it does say is, ‘hey, listen, we’re closer to parity than we were in 2023 and I think that’s a victory given that…the past decade we’ve seen lots of mandated zeros and even cuts by governments, so this gets these workers much closer to cost of living.”

Whether other workers facing contract talks will follow PSAC’s lead and strike is difficult to predict, but Smith said times of inflation and economic uncertainty have historically led to more labour conflict.

“I don’t think it sets the tone and this will be the benchmark that every union will be asking for, but I think it changes the dynamic in terms of how different public sector unions might contemplate their upcoming negotiations and potential job actions,” he said.

However, he and Stanford agree the gains will not go unnoticed by workers, especially those who have seen wage increases of only one or two per cent in recent years.

“The people saying I got one per cent are not being treated well and they should demand something better,” Stanford said.

“And if there’s a lesson in this experience, it is that if workers get together and stick to their guns, they can win something.”

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