Union News - October 2022
Q. In reviewing the wage proposal presented by the Union of Taxation Employees (UTE) to the employer for the years 2021, 2022 and 2023 of 4.5% (after a market adjustment), 8% and 8%, should I not be concerned that this will just add to increasing the inflation that all of us are now faced with?
A. There are varied opinions amongst economists regarding the impacts of salary increases and inflation. This is never more apparent than what we see in the current economic times.
One theory, wage-push inflation, suggests that inflation occurs due to wage increases. Simply put this theory suggests that higher wages will cause businesses to raise prices on the goods they produce in order to maintain their profit margins which in turn can cause inflation. If one looks at the current inflationary trends of 7 to 8% and compares that to the two to four times increase in profits for many of the largest corporations in Canada, this is not the case of just trying to maintain a profit margin.
This clearly suggests that the main reason for the significant increase in inflation is purely greed amongst the corporations and NOT employees asking for salary increases to maintain their current standard of living. No individual should lose purchasing power by receiving salary increases which are significantly less than inflation.
To quote the Public Service Alliance of Canada in a recent article:
Public sector jobs act like a safety net when inflation soars by supporting good stable jobs and keeping our economy healthy. For every dollar spent in the public sector, between $1.09 and $1.28 is added to the Canadian economy. This, according to a report from l’Institut de recherche et d’informations socioéconomique (IRIS).
IRIS goes on to say that contrary to statements made by numerous bank economists, salary increases negotiated for public sector workers have no direct impact on inflation. This is a direct correlation to the fact that public sector workers provide services to Canadians that for the most part are not based on a for-profit model.
The wage demand proposed by UTE is very realistic based upon the current economic realities and allows our members to meet rising costs in order to maintain a standard of living which appears to be exacerbated by greed. The union's proposal will not have any significant impact on inflation but will ensure that our members are able to maintain fair wages to support themselves and their family.
Gary Esslinger
Chair, Communications Committee