Cutting Civil Servants Pay a Bad Idea
In a recent Calgary Herald column (The missing budget-saving option -- civic salaries) the Fraser Institute’s Mark Milke argues that the solution to the City of Calgary’s budget woes is to freeze, or better yet, cut the salaries of City workers. Many will cheer this line of thinking, but it is a bad idea nonetheless.
Milke argues that workers in the private sector take pay cuts all the time, so why shouldn’t government workers? Before doing so, it would be wise to make sure that the government staff wages to be cut are on par with wages for similar jobs in the private sector. If we are already getting a bargain, does it make sense to cut salaries even more? Before calling for public sector wage cuts, the first step is to make sure we are comparing apples to apples.
Hence, while playing a game of limbo with public sector salaries may be fun for non-government workers gathered around a water cooler, it may be based on bad information, or worse, jealousy. We have all heard someone moan about cushy government jobs and overpaid bureaucrats. Having analyzed the public sector for over 15 years, I can assure you that working for government is not the best way to get rich nor is it particularly cushy! Contrary to the myths perpetuated by some, government employees are not brain-dead zombies who want nothing more than to make our lives difficult. Okay, there was that one guy at the old Department of Motor Vehicles, but that was a long time ago.
Milke also assumes that cutting wages in the private sector is a good business practice and therefore, should be copied by the government sector on that basis. But what if this isn’t always the case? The standard kneejerk reaction to an economic slowdown is to placate shareholders by cutting wage costs. More and more managers, however, understand that retaining high quality staff—even if it means a short-term hit to the bottom line—is often extremely important to the long-term success of a business and, in turn, shareholder value.
This is particularly true of businesses or organizations that need highly-trained professionals that are not easily replaced, which is exactly the situation with many civil servant positions. This doesn’t mean that layoffs and wage cuts are never appropriate, but it does demonstrate that the issue is more complex than it may seem at first blush.
As taxpayers, we need to ask ourselves what we want: do we want the cheapest possible government services or do we want high quality government services at a reasonable, but far from the cheapest, price? Personally, I want to served by government staff who are the best and brightest and who are paid for being so. I want this when I am doing business with the private sector too. More education and training, better skills, highly motivated and innovative workers, and the good wages that go along with all this make a lot more sense to me—be it in the public sector, the nonprofit sector or the government sector—than saving a buck or two now, but paying for it later in inefficiency through lack of human talent.
It’s about value for price. I could buy the cheapest car, eat the cheapest food, watch video cassettes from the 1980s instead of switching to Blu-Ray, and so on, but I would be giving up a lot just to stash a few more dollars into my mattress. The same is true for government services. Do you tell the person trying to find new solutions for clearing Calgary’s streets that their salary is being cut? Or do you offer them a bonus for creative ideas that work to improve efficiency and reduce waste?
Retention of high performing government staff is already hampered by the lure of more dollars in the private sector. I don’t want to have to wait longer for a building inspector to show up because the best people have left to work for private engineering firms who pay more. If this means offering public employees good wages, stability and a real pension, I am willing to make this trade.
We should also remember that civil servants are real people, not the aforementioned zombies some depict them as. Yes, as taxpayers, we pay their salaries, but this doesn’t mean that we should be stingy bosses. After all, you get what you pay for.
Top quality personnel come at a price. If Canadians want good public policy and public institutions that operate in the best interest of society, we need professional, well-trained and highly motivated public servants.
Robert Roach is the Director of the Canada West Foundation’s The West in Canada Project. Canada West Foundation is the only think tank dedicated to being the objective, nonpartisan voice for issues of vital concern to Western Canadians.
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