Half or double - Alberta government employee salaries

Posted by Todd Kuipers
February 12, 2009

Straight out of See, comes an article describing expectations for the new sitting of the Alberta Legislature.  Tucked in near the bottom of the article is a paragraph describing a move by Harry Chase:

Social Workers: Harry Chase, the Liberal MLA for Calgary-Varsity, is calling for a review of the wages for social workers or other human resource support staff doing contract work for the province. “What I’m calling for is equal pay for equal work,” he says. According to his research, a social worker hired by the government makes almost double the wage earned by those doing contract work.

My first reaction was that Harry Chase was on the case, looking for fat, examining what looks like high bureaucrat/employee salaries during a time of fiscal contract and uncertainty.  If a contractor is willing to do the work for half the price, it would seem that the equivalent employee is making too much money.  This logic is used when comparing salaries across industries, regions and roles, so it certainly can apply here.  I fully support a review to see if salaries are too high.

Given the source, Mr. Chase is very likely looking to further inflate the Alberta Government payroll.

But, I have to admit, the pork and uncertainty (read: ineptitude) show run by Ed Stelmach, Mel Knight and crew vastly overshadows any negative effects that Chase’s salary equalization plan would have.



Alberta, Annoyance, Calgary, Economics, Politics, Public Policy

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Comments

Questionable logic. I’m sure as a consultant with MI you saw competitors undercutting bids in order to win business. This does nothing but bring the entire value of a project, including wages, down. I know I saw this repeatedly at FWJ, where competitors would use loss-leading techniques to secure business. To say that the employee is making too much money goes against what is really happening. Chances are, the contractor is prostituting themselves out (whether by necessity or negligence). I don’t think ‘willingness’ is a proper gauge for fair pay.

Comment by Steve Pieroway on 10 am - Feb 13, 09 @ 10:19

Good point Steve, that bidding to the bottom is often destructive, but the logic is sound. Note that I did not say what level the salaries should be at, merely that they looked high versus the contractors and that a review of salaries should be done. I think you’re seeing bald-faced intent where none was stated, though you could grind me on this line - intentionally placed to cause a reaction:

“I fully support a review to see if salaries are too high.”

In a province with more than full employment I think that you’re right, if contractors are poorly paid then it’s active negligence on the part of the contractor to not negotiate higher rates when rates are likely to be higher for same or similar work outside government. Mostly I didn’t like the assumption of the MLA that because contractors are paid noticeably less than employees that they were getting screwed. A review of salaries would be good as long as the salary assumption isn’t de facto on the highest end.

And thanks again for throwing in!

Comment by Todd Kuipers on 3 pm - Feb 13, 09 @ 15:41

Hey Todd, you might not have blatantly said where salaries should be, but yes, it is implicit in your piece that you believe salaries are too high. Otherwise, you would have supported an investigation to see if contractors’ wages are too low.

Comment by Steve Pieroway on 10 am - Feb 16, 09 @ 10:40

Of course, how else could I immediately get you assuming that I’m a bad person that doesn’t care about common folk. ;-)

To be clear on my part again, it’s not only implicit that I think that salaries are too high, mostly that the assumption by the MLA is that they’re too low. Assuming one end, without being open to the other implies significant bias. If the general assumption is that people are under paid and that the government should move to fix it implies that we should have a minimum wage/salary somewhere in the mid-five figures per year.

The question for you is: Why do you assume that people cannot be fair or make choices without government protection? Another would be: Why would you trust the government to protect your interests, instead of moving to protect your interests (those things you care about) on your own? And another: Based on the likely answer to the previous question, why would you assume that people in general are not competent to look out for their own interests, instead substituting government regulations for personal judgement and initiative?

To your previous note, at MI when using contractors, we didn’t bid people against each other. Once we found a supplier for a particular skill we kept using them at the agreed rate (generally higher than we paid ourselves), until they ended the arrangement or we couldn’t use the skill set any longer.

Comment by Todd Kuipers on 12 pm - Feb 17, 09 @ 12:16

Hey Todd,

I am not sure why you think I assume people cannot be fair or make choices without government protection? I didn’t say that anywhere. In fact, I think the government, in this instance, is not being fair with the contractor. And I do believe people are capable of looking out for their own interests, when the conditions permit. But your libertarian take on this particular situation is not founded on reality.

Here is how I view the situation. The government, and the union representing social workers, defined a pay scale through the process of collective bargaining. Collective bargaining is really only effective when both parties are operating at what I would call a ‘fair’ position. That is, one party can not unfairly leverage their power over the other.

Now, through this process, the 2 parties come to an agreement on what constitutes ‘fair pay’, and I am assuming this is based on a number of factors, including pay in the private sector. You can agree or disagree that the final number is ‘fair’, it doesn’t really matter.

So, for the government to hire contractors at a pay half the price is unfair. In fact, the government is using it’s position of power over a vulnerable party, namely the contractor. The individual is powerless against the government: there is an imbalance of power. So, I believe that if the contractor is doing the same work as the govt. employee, then he/she should receive the same pay.

Thoughts?

Comment by Steve Pieroway on 7 am - Feb 20, 09 @ 07:49

You soundly contradict yourself in the first two sentences. An MLA wants the government to protect contractors from some sort of “exploitation” - meaning implementing some sort of fairness regulation and you believe this to be a reasonable move. Therefore, the contractors, who you just said are capable people - (and I would assume they are as well) - require protection from their choice to work at the contract rates. This position doesn’t support personal choice and implies that people are not competent to make their own choices. I believe they have chosen their profession and chosen their employer.

I believe that people are generally competent to look out for their own welfare. In a province that still has structural full (or very very close to full) employment there are many options for these contractors - they do not have to subject themselves to exploitation if they do not want. Substitutes include: joining the union, creating a new bargaining unit/union, finding other identical positions in other organizations, finding related positions that may provide on the job training, and retraining to gain another profession. (You have proven yourself capable of making this choice.)

On the government service side, if the gov’t department has a finite budget - as all organizations (gov’t, NGO, personal or corporate) do - the increase in salaries would likely have fewer people working at higher rates. This would mean fewer people working, higher unemployment and fewer services the department can provide. There isn’t an infinite pot of money to be spent on full employment at some ideal salary level.

Think too about the situation you’re painting with respect to the collective bargaining. The union - who conceivably could incorporate the contractors, if the union (and contractors) chose - chooses to only represent a portion of their profession at the same employer. Meaning if they felt the way you do, they could strike or take job action to improve the pay of their oppressed colleagues. If the union isn’t willing to protect the contractors, what does that suggest about the bargain struck? Is the contractor powerless, and the union (and it’s membership) indifferent (or even hostile) to contractors? Very Likely the union sees a finite pot of cash and wants to protect their share for their members.

Let’s be clear too, I take no stance against collective bargaining. If people want to work together to negotiate better pay in a organization that they believe has more money to spend on salaries, I think that can be quite prudent. There are people and organizations out there that will attempt to exploit people given the chance and increasing negotiating power can expose and extract available cash.

Comment by Todd Kuipers on 10 pm - Feb 20, 09 @ 22:18

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