PSAC strike could be a ‘trendsetter’ for wages this year, experts say. Here’s why – National

Representatives of unions representing public sector workers who are striking for better wages and working conditions couldn’t be clearer in a message to Canadians earlier this week. Unions don’t just fight for civil servants, they fight for you.

“When the federal government suppresses the wages of its own employees, what the federal government is doing is suppressing the wages of workers across the country. workers, the private sector, the public sector, etc.,” the Public Service Alliance of Canada (PSAC) said in a speech on Monday.

“We are asking the government to come to the bargaining table and set that standard for every worker in this country so no worker is left behind.”

Click to play video: 'President of Finance Board says PSAC must be ready to compromise: 'We cannot write a blank check'

Finance Board Chairman Says PSAC Must Be Ready to Compromise: ‘You Can’t Write a Blank Check’

But how much will the negotiations between Ottawa and civil servants ultimately affect other Canadian workers?

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Some experts say ongoing labor disputes can really set the mood for bargaining at work, especially for those seeking flexibility in their jobs.

Here’s what you should know:

Will the strike have implications beyond the public sector and unions?

Thousands of public service workers went on strike Wednesday morning after the federal government and the PSAC, which represents about 155,000 federal workers, failed to reach an agreement in negotiations that began nearly two years ago. Did.

Armine Yalnizyan, an economist and Atkinson Fellow for the Future of Workers, told Global News that workers leaders, employers, and workers alike are keen to see how the negotiations between PSAC and the federal government are being resolved. He said he is likely to be keeping a close eye on Ruka.

“This is definitely a series of trendsetter negotiations,” she told Global News.

These highly public wage negotiations took place when inflation fell to 4.3% in March, but last June saw cost of living rise peak at 8.1% for a year of price increases. It was after pressure. Average hourly wages rose 5.3% last month year-on-year, but wage increases have regularly lagged inflation for most of the past year.

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The PSAC is pushing for a retroactive wage increase of 13.5% over three years, with inflation at 13.8% over the same period, according to the union. The Treasury Department countered by proposing a 9% wage increase for him over three years.

Click to play video:

PSAC strike: Trudeau government faces political headache

Union struggles, including labor disputes, strike votes and strikes, have become more common amid persistently high inflation, said Larry Savage, a professor in the Department of Labor Studies at Brock University.

and it can be contagious, He said, Especially if the strike succeeds in bringing about higher wages and better working conditions.

“A successful strike by PSAC members could have a domino effect,” he told The Canadian Press this week.

Striking workers said they hadn’t had a contract for about two years and hadn’t gotten a raise at all as inflation rose.

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“I think this clearly shows they’re fed up. And now they’re heating up.”

Many civil servants are asking for pay increases not only to keep up with the rising cost of living, but also to keep up with what they say has been underpaid for years.

Yalnizyan says workers at the Canada Revenue Agency (CRA), whose union demands are relatively higher than those of the PSAC, are seeing particularly slow wage growth.

She said the strike solution would be “very telling” how much bargaining power Canadians in the private sector can expect today after a year of high inflation.

“If we can’t maintain the purchasing power of people who make $20 an hour in the public sector, I don’t think there’s hope for equity in the private sector,” she says.

Michael French, national director of recruitment firm Robert Half, said now is the perfect time to ask for a raise as many employers are desperate to retain talent in a competitive job market. I agree with you.

The national unemployment rate remains stable at 5.0% through the first quarter of 2023, just above its record low.

“If you’re someone who needs to ask for a raise, there’s no better time to do it than now,” he says.

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“Don’t be afraid to say prices have gone up across the board, wages have gone up. It may be time to adjust.”

Don’t be afraid to ask for more than your wages

PSAC seeks to ensure not only wages but also the protection of employees’ telework contracts in a post-pandemic environment.

According to Yalnizyan, this element is novel to labor negotiations and Canadians keen on working flexibility may want to keep a close eye on it.

Securing remote work has an economic component, saving money on commutes, coffee and lunches, but just as important for some workers is controlling when and how they work.

“The results are not just about money, but about time and time autonomy,” says Jarnijan. “And I think that’s going to be a growing story in the labor market.”

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Click to play video: “Unions don't compromise wage demands to get remote work,” says Aylward.

Union won’t compromise wage demands ‘to get remote work’, says Aylward

French said such flexibility requests could be factored into negotiations if workers who ask for a raise are told they don’t have the funds for it within their organizations.

a Robert Half investigation from February We found that flexibility in working conditions, such as non-traditional working hours and remote or hybrid options, can be worth a trade-off of as much as 16% of a worker’s starting salary.

“You may see companies and organizations that have no money to spend and seem to be starting to pull out different tools in their toolbox,” he says.

“Well, what else do you have? Can I get an extra week off?

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Will higher wages boost inflation?

Demanding higher wages at a time when inflation is declining goes against some messages from the Bank of Canada.

Central banks have sharply raised benchmark interest rates over the past year to ease price pressures, but recently adopted a moratorium to see if inflation will continue to fall as the economy slows. .

One possible problem with the central bank’s efforts to return inflation to its 2% target is service inflation, which is underpinned by wages paid in these sectors.

Bank of Canada Governor Tiff Macklem angered some Labor Party officials last summer when he told a group of business owners not to factor high inflation into long-term wage contracts.

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He said he would leave wage negotiations up to employees and their employers, but his comments were met with backlash from union leaders who saw them weakening workers’ ability to raise wages.

When the Bank of Canada announced last week that it would keep interest rates on hold, Mr Macklem said wage growth still needed to be “moderate” before inflation returned to control.

Click to play video: 'Canada's job market is starting to cool, says Bank of Canada governor'

Canada’s job market is starting to cool, says Bank of Canada governor

Wage growth, if not accompanied by productivity gains, will cause firms to pass higher labor costs on to prices, accelerating inflation, he told the Senate Banking and Economy Committee on Thursday.

“We want an economy where wages rise and productivity rises. Productivity gains match wage growth,” he said.

“This is a very important moment to test the Bank of Canada claims we have been hearing since the summer.

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But given Canada’s low unemployment rate and high demand for workers, she argues now is the perfect time for workers to raise wages, despite central bank claims. .

“Wages usually go up in these kinds of situations when the labor market is very tight,” says Yarnijan.

“So to say the Bank of Canada shouldn’t raise your wages is a bit offensive to the market conditions we’re in.”

— Using files from Global News’ Kyle Benning, Aaron D’Andrea, The Canadian Press

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