If government capitulates on strike demands, future generations will pay the price

By Howard Levitt

Consequence will be further productivity drops and an inability to hire in the private sector

We are reeling toward crisis with no alarm sounded.

We all know that, during the pandemic and still, Canadians could barely access our public services.

Good luck getting a passport. Good luck dealing with immigration or CRA issues. Good luck, when going to a government kiosk, finding anyone there. And the concept of a federal government worker actually answering their phone would send those who have tried into spasms of mirth.

While public service essentially ceased to exist, the private sector was ravaged by an inability to attract workers.

It was not because there were more jobs available. Private sector employment, compared to pre-pandemic, not only did not increase but actually went down.

It was because all available workers were sucked up by the public sector, which offered 18 per cent higher wages, dramatically better benefits, shorter working hours, earlier retirement with gilded pensions, and job security such that, even if a worker sat around and did nothing, they had little risk of being fired. To provide additional perspective, while only nine per cent of private sector employees have defined-benefit pension plans — the gold standard when it comes to retirement security — 78 per cent of public sector workers do.

As the Fraser Institute found, 87 per cent of all job creation during the pandemic was in the public sector. And much of the public sector did not work for many months during the pandemic, never were laid off and had their salaries actually increase.

But because they worked from home with little or no supervision, public sector productivity dramatically plummeted, requiring the government to hire more workers plus many contractors and consultants. From 2015 to 2021, public sector wage costs increased by more than 50 per cent, from $38 billion to $58 billion. Contrary to the nonsense spouted by Prime Minister Justin Trudeau and the unions, that is a fiscal problem, not a solution.

Private sector workers’ tax dollars have gone toward paying these dramatically higher salaries for public sector workers, to accomplish less work than before. And while there were massive layoffs and wage cuts in the private sector, no one lost their job from layoffs in the public sphere — even when there was no work to do.

Did this do the country any good? Despite this massive additional spending, our per capita, economic growth has been among the weakest in the OECD since 2015 while the economy has been flooded with public money, leaving massive debt to beggar the next generations.

Generally, when a boondoggle like this has been perpetrated, its beneficiaries at best are openly appreciative and, at worst, try to stay out of sight, lest the good times be stripped away once others become aware.

But not here. Rather than quietly appreciating their spectacular fortune, our overcompensated (by market standards) public sector workers have gone on strike to extract even more, in the form of higher wages and the institutionalized right to work from home.

The reason public service has been so abysmal since the pandemic started was because these workers were “working” from home without supervision. And that is why so many have been hired to attempt to fill these productivity losses. Canada cannot afford what we already have, let alone more.

And the consequence will be further productivity drops and an inability to hire in the private sector.

The federal government announced its vaccine mandate at a time when few had. But it opened that door and created a precedent for provinces, cities and private sector employees to jump on that bandwagon. Similarly, here, with the government capitulating by allowing its workers to have, at their option, remote work, the pressure on other unions and private sector employers across Canada to demand or agree to the same will be inexorable. And if they do not match suit, they will have great difficulty finding employees. This at a time when employers have been working toward getting employees back into the office for the benefit it offers in terms of productivity, mentorship and team building.

Studies have shown that, the longer employees are permitted to work from home, the greater the decrease in productivity. That makes sense. If an employee working from home takes a little time off in the day to do unrelated tasks without consequence, the tendency is to then take more time off going forward — and so on. That has happened already over the last few years and explains why the service level has been so abysmal. And now it will be institutionalized.

The irony is that the unions fully understand that there is much that cannot be done from home. This union, while demanding the rights of their members to work from home, has, when its own productivity was at stake, required these same employees to show up at their offices to picket in order to receive strike pay.

What should the government have done with this ridiculous strike?

Since truly essential workers were not permitted to strike, the government should have let this union picket indefinitely, save the wage costs and refuse the right of employees to have working from home embedded into their collective agreements regardless of how inefficient a particular worker is and regardless of the in-person demands of a job.

If the government capitulates, the economic burden caused by excessive public service wages, low productivity from remote work and their combined impact on depriving the private sector of needed skilled labour will be exacerbated as we flounder into greater crisis.