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The salary increases in the CUPE 15 with the city are 6.75 per cent over four years, a little bird says

October 30th, 2012 · 37 Comments

This, from a source.

At staff meeting the following numbers were provided for 4 yr agreement (really 3 now due to gap between expiration of past contract and current agreement)

Year 1   1.25%
Year 2   1.75%
Year 3   1.75%
Year 4   2%

Categories: Uncategorized

  • jesse

    I’m arriving at 6.921%
    (1.0125*1.0175*1.0175*1.0200)

  • Paul T.

    Does the “source” have any details on other conditions that may have changed? Looks like a relatively small pay increase to buy union peace.

  • MB

    The inflation rate over the last 20 months was between 1.2% (Sept/12) and 3.3% in the early summer of 2011.

    http://www.tradingeconomics.com/canada/inflation-cpi

    By comparison, these pay rates aren’t unreasonable, though it’s hard to predict inflation four years in advance.

    The last “Olympic” contract for most cities in the Metro was generous and stretched over five years. If memory serves, only Vancouver went on strike (three months), but they ended up with a contract similar to the neighbours anyway.

    The last contract also broke a long cycle of public sector contracts featuring 0% in at least the first year.

  • Julia

    what have the increases been between the last contract and this one and how do they compare to the private sector.

  • Mike Klassen

    Allen Garr says “the source” was a city councillor.

    http://www.vancourier.com/news/Vancouver+city+hall+settles+with+union/7470544/story.html

    Since it was a Garr story I would safely assume it was not an NPA councillor who leaked it.

    Frances, can we assume that your source was also a city councillor, or someone with authorization privileges like Penny Ballem or Mike Magee?

    I think it is predictable that CUPE are getting the New West deal. Everyone the region will get the same deal, which works out to be 7.2% compounded. When you have a labour-friendly council in one of the Metro Vancouver jurisdictions like New Westminster, it increases the probability you’ll get a favourable deal.

    It also enables whipsawing between the cities. The length of time it took to get this deal (nearly 11 months after the ’07 ended, and probably nearly a year of negotiations before that) suggests that Ballem & co. wanted a zero in there somewhere. Thanks to New West, that was not possible.

    What I’m curious about, and I gather you are too, Frances, is why the odd communications strategy? First they announce settlement but with no details. Then Vision leaks it. Not sure what that was supposed to accomplish except perhaps more cynicism in folks like me. Would love your take on this.

  • waltyss

    @Mike Klassen. Not a huge difference, but with compounding, jesse had it right at @1. It’s 6.921%, not 7.2% over the four years.

  • Frances Bula

    @Mike. I don’t actually know who my source was. It’s someone who writes and posts regularly, has provided some reliable info in the past. Doesn’t seem to be a person who’s totally crazy about Vision. I didn’t publish it anywhere but the blog as I did not have a named source, but seemed like reasonable numbers to me, so I rolled it up the flagpole. Now, apparently, it’s confirmed.

    I love to speculate endlessly about Vision strategy, which I tend to think is behind most things, but occasionally I become aware on some issues that there is no strategy at all.

  • karen cooper

    http://www.tableaudebordmontreal.com/comparons/pouvoirachat/tauxinflation.en.html?mode=print inflation over last 10 years comparing Vancouver, Calgary, Toronto and Montreal

  • spartikus

    According to the Hays Group, as reported by 24hrs and others, the private sector will be seeing raises in the future:

    Vancouver workers will see their salaries rise by an average of 2.8% next year, but private sector workers will get larger raises than government employees, according to an annual salary survey released by global management consulting firm Hay Group.

    Vancouver’s average wage hike is forecast to be on par with all of B.C. (2.7%) and Canada (2.9%), but less than oil-producing provinces like Alberta (3.6%), Saskatchewan (3.2%) and Newfoundland (3.4%).

    B.C. workers in private industries, including the financial and industrial sectors, will see average raises of around 3% whereas non-unionized public sector workers will receive just 2.3%, according to Vancouver-based Hay Group consultant Tracy Bosch.

    Unionized government employees are forecast to receive the smallest raises averaging just 1.8%, said Bosch, explaining that this group is already better paid than their private sector counterparts, whereas their non-unionized co-workers, who are largely management, are still underpaid.

    “There is still a lot of catching up to do (with the private sector),” said Bosch.

    Some industries are also more financially rewarding than others, according to the Hay survey. Workers in oil and gas, mining, and chemicals will see raises ranging from 3.4% to 3.9% across Canada, while those working in healthcare, media and telecommunications can expect just 2.0% to 2.3%.

    More than 500 Canadian public and private sector employers took part in the annual survey.

    These are projections, of course.

    Also of interest: The CPI back to 1914 to 2011 is available from Statscan – CANSIM Table 326-0021.

    As noted by MB, the City of Vancouver got the same deal as other municipalities in 2007 despite using the GVRD Labour Relations Board negotiating team, which I believe Mr. Klassen feels is the difference this time.

    Of historical note, it was Mayor Sullivan who insisted on the 5-year length of the last contract.

    DISCLOSURE: I am a CUPE member.

  • Tim Latanville

    Doesn’t seem like that big a deal insofar as a wage hike. Certainly not near the 16% increase that the unions got under the NPA’s Sam Sullivan when Mike Klassen was working there. But what’s really going to be telling is what language changes the union got and whether that’s like New West or not. If it is then it will cost the taxpayers big time. If not, then it’s surprising that the union would settle for only that measly wage hike.

  • IanS

    @Tim Latanville #10,

    What “language changes” are you referring to? And what would the costs be?

  • Chris Keam

    The language changes are available online:

    http://387.cupe.ca/collective-agreement

    The MOA lists the changes. Don’t we wish untendered gov’t contracts to well-connected insiders were as easily available!

  • IanS

    @Chris Keam #12:

    Thanks for the link. Your google ability remains impressive. Nevertheless, I remain curious as to what changes Tim is referring to and how he thinks they will increase costs.

    “Don’t we wish untendered gov’t contracts to well-connected insiders were as easily available!”

    Absolutely. Or even untendered contracts to arms length entities.

  • Chris Keam

    I actually provided the link as a courtesy to those who might wish to view the material through an unfiltered lens Ian… including anyone trained to be skeptical of opinion over evidence (gentle dig). Provides context for any response Tim might wish to deliver. Unless the Internet is stripping the heartfeltness out of your expression of gratitude… with all due respect, maybe park the sarcasm and realize it’s not all about you mmkay? 🙂

    cheers,
    CK

  • IanS

    @Chris Keam #14,

    I don’t object to the link or the information. And, while I’m quite happy to be skeptical, I need to know what the opinion is before doing so. Hence, my question to Tim.

    And, if it’s all the same to you, I’ll take a pass on the ad hominem digs though. We’ve seen way too much of that here in the last while.

  • Mike Klassen

    @Frances. Thanks for clarifying. As someone who has been scolded about using unnamed sources in the past, it is nice to know there is a place for it.

    @Tim aka Quinlan. History will recall that the Vision councillors wanted a better deal for CUPE than what was offered in August ’07 (which, btw, matched Richmond Mayor Malcolm Brodie’s — there’s that whipsawing again). Sadly, CUPE didn’t accept that offer until mid-October. I guess a 2-week strike would not have had the same political cost for the government as a 13-week strike.

    I’d be careful about making comparisons to the 2007 deal. It could have cost all Metro Vancouver taxpayers much more. What cities should have sought this time is a 2-year net zero deal to match the Province’s in order to counterbalance the generosity of the previous settlement. What I’d like to know also is have the contracting out provisions been altered in this agreement, or are benefits, EDOs or pension provisions changed in the current deal?

    While Vision assailed Sullivan at the time for being too rigid with his public service workers, it is ironic that today the same folks say he was too generous.

  • teririch

    @Mike Kalssen #16:

    Well played… 🙂

  • rf

    I sense from Sparty’s email that public sector sense of entitlement. There is no comparison between most civic and public sector union jobs and the oil and gas industry.

    There is incredible demand for skilled workers in those industries. Companies are lining up to find workers.

    If they posted a job for a desk clerk at city hall there would be 500 applicants.

    The laws of supply and demand have got to apply.

    You could drop the wage of firefighters by 30% and there would still be 1000 twentysomething hockey playing males lined up for the job.

    They can increase the salary of petroleum engineers by 25% and they will still have a shortage.

    The stats and comparisons are nice but they are apples to oranges comparisons and require one to ignore capitalist economic forces (which I know you prefer to do).

    Just imagine if there were no strikes and the city cut salaries by 10%. Are people going to quit and go work for another city. Probably not. There wouldn’t be enough jobs.

    If a company in Fort St.John cut salaries 10%, people would actually quit and go work for someone else who will gladly pay it.

    CUPE is lucky that our bureaucrats don’t have the guts to set public sector wages in line with supply and demand. Sadly, all of the non-union managers will now use this increase as an excuse to bump their own, far more outrageously inflated salaries and benefits.

    The Hay Study is completely skewed by a couple of industries that have had substantial wage growth.

    CUPE wage increase echo much longer term into increased retirement benefits based on peak earning years.

    The private sector doesn’t work that way.

  • Victor

    Here here, rf

  • Victor

    meant to be hear, hear!

  • MB

    @ rf 18 …public sector sense of entitlement.

    Do you have evidence to back up your dozen or so paragraphs of conjecture?

    I have had both feet for years planted in both camps and I’ve not encountered a monochromatic private or public sector.

    Nor have my consultant colleagues who have worked in several private jurisdictions over the years and found major differences in remuneration, benefits and client/industry respect between, say, Vancouver and Toronto, or even more radical between Canada and the UK.

    I would suggest you’re confused about the scale of bureaucracy. I would not suggest that people should be faulted when they’re laid off en masse due to the financial mismanagement by the board of a corporation and head over the the public sector.

    Both the private and public sector let people go to balance the books. The public sector may be gentler because it relies more on natural attrition, or signs contracts over a decade that let inflation reduce public sector wages by 10%, as experienced in the 90s and early 2000s.

    We’ve experienced the strange reality of politicians who hammer the public sector shortly after getting elected while concurrently spending on mega projects, or while dramatically increasing their own pay and that of the top bureaucrats they hire.

    That has little to do with sound fiscal management and everything to do with ideology.

    It cuts both ways, rf.

    CUPE wage increase echo much longer term into increased retirement benefits based on peak earning years.

    The pensions (private and public) that I am familiar with are simply based on the accumulated employee + employer contributions over time.

    Based on what I’ve read, public pensions are better protected from market variations, though that depends on what the funds are invested in.

  • Dan Cooper

    rf opines, “There is no comparison between most civic and public sector union jobs and the oil and gas industry. There is incredible demand for skilled workers in those industries. Companies are lining up to find workers. If they posted a job for a desk clerk at city hall there would be 500 applicants.”

    Ah, but assuming you are right about a particular recruitment for a particular position, the public sector does not include only desk clerks, and the private sector does not include only oil-rig-welders. Yet the statistics given for each sector apply across the board, not to one job. How many applicants will there be for a capable, psychiatric nurse in a hospital? How many for a qualified, senior engineer in a city planning department?

    From what I have read, indeed some public sector workers make more than those in the same job in the private sector, while others make less. Also, workers in the public sector, especially in those “lower-end” jobs, tend to have more experience and be higher skilled than those in the private sector. In other words, if (and I say, “if”) you get 500 applications because you pay relatively well, it means you can hire somebody who is highly qualified instead of taking whoever you can beg to come. Personally, I would rather have my government services operated by qualified and capable people, so this is fine with me.

  • spartikus

    I sense from Sparty’s email that public sector sense of entitlement.

    Hi rf,

    A question was asked by Julia. I attempted to answer it.

    No one asked, but yes I would love for my wage to at least meet the CPI. I’m sorry if you think this indicates some sort of moral failing on my part. However, I think most people share similar feelings too. I don’t think this stems from “a sense of entitlement.”

    Of course I can only speak for myself in this regard.

    I think you’ve misread the Hays Group piece. Their projection for Vancouver is 2.7%. This is separate from the projections for Alberta mentioned later. As Vancouver doesn’t have an oil and gas industry I don’t see how the demand for those workers in Alberta skews the projection for Vancouver. I believe the Hays Group may have taken this into account. I’ll concede the whole thing might not be worth the paper it’s written on. But then again they also do this for a living too.

    As discussed here the past and above, the public sector is – at all levels – in fact made up mostly of university educated professionals. Engineers, architects, planners, etc. Yes there are labourers and clerical workers, and yes studies show these lower end of the wage scale jobs are better compensated than their private sector counterparts. These studies also show this is mostly due to belonging to a union, and the legal requirement governments have to not discriminate against things like gender, new Canadians, etc – groups who in the private sector are not compensated equally, statistically speaking. I don’t think there’s anything to apologize here for. That’s the point of belonging to a union. That’s the point of living in an advanced economy. It’s what we aspire to be.

    You’ve mentioned in the past your belief that there would be young men lining up to volunteer to be firefighters. I’m not sure where this belief stems from. There are all-volunteer fire departments in small towns, but I’m not aware of a single firefighting department in a major city anywhere in the world that relies exclusively on volunteers. You obviously differ on this, but I would prefer my firefighters to be dedicated, career professionals. For some reason I feel more secure knowing there are veterans out there who have spent years learning their craft protecting my family than a force composed of twentysomething hockey playing males. Men and women who know how to respond to different types of chemical fires, or how to fight a blaze in a skyscraper and so on.

    I’m not a firefighter, let alone a volunteer firefighter so I don’t know much about these things.. But I do have some Google-fu. It seems running a volunteer fire department is not such an easy thing, even in a small community:

    It takes four or five years of dedicated training to make a firefighter. Unlike in other professions, fire chiefs don’t hire a fully trained person to do a job. Construction companies hire trained backhoe operators to run backhoes. Dental offices hire qualified dentists. We hire people who we believe, through a series of tests and interviews, have the potential to become good firefighters. Then, we put them though 120 hours of training. And you know who does all that training – other volunteer firefighters. It takes more than 200 hours for training officers to put together lesson plans and instruct recruits. Last year, our 50 volunteer firefighters put in 17,405 hours of training and responded to 564 alarms – that’s about 470 work weeks.

    The only way the Canadian system of volunteer fire departments can work effectively is to have firefighters who are well trained, who are given the best equipment and apparatus, who receive fair remuneration and who have the utmost respect of colleagues and the public.

    http://www.firefightingincanada.com/content/view/2136/213/

    Finally, the private sector often uses the public sector as a benchmark when setting wages.

    The last 30 years have shown a very privileged minority reaping an ever-increasing share of the wealth our society produces. They know it. And they’re afraid we’ll wake up. Which we are.

    With that in mind, you and I are not adversaries.

    Quite the contrary…

  • rf

    “The last 30 years have shown a very privileged minority reaping an ever-increasing share of the wealth our society produces. They know it. And they’re afraid we’ll wake up. Which we are.”

    It’s fascinating how this line can be viewed so differently. You view that priviledged minority is this catchphrase 1% group and view much of this as a worthy redistribution of wealth.

    When I read that line, my first thought is that the privlileged minority of the last 30 years is the public sector pensioner. Pensions designed to be paid out for 10-12 years are being collected for 25-30 years. All of the market and inflation risk is redistributed to the taxpayer.

    You look at your base salary against CPI as the baramoter of fairness.

    I look at that but also look at the Net Present Value of the retirement annuity and how it dramatically rises after the 30 year decline in interest rates.

    You look at corporate profits and say, “what about me?”

    I look at corporate profits and say, “how do the union rank and file not understand that their pension plans are the largest shareholders of the corporations?”

    http://financialmentor.com/calculator/present-value-of-annuity-calculator

    Play with this little calculator and you will see what I mean about the value of the pension you will receive. It’s insincere to not take this into consideration when calculating your overall compensation.

    A $35,000/year pension for 30 years, when interest rates were 5% (like when you started contributing) has a net present value of $538,000.

    Interest rates are now 2% and you are still guaranteed the same amount, courtesy of the taxpayers who bear all of the market risk for your lifetime compensation.

    The net present value is $783,000. That’s $245,000 more.

    Don’t tell me that you are behind CPI.

  • Bill

    @MB #21

    “I would not suggest that people should be faulted when they’re laid off en masse due to the financial mismanagement by the board of a corporation and head over the the public sector.”

    There are many reasons that people are laid off in the private sector – mergers/acquisitions, competitive pressures – the vast majority of which do not apply to the public sector and is no doubt why people “head over to the public sector” rather than competing in the private sector. I have no problem with that but that should result in salaries and wages in the public sector being at a discount to the private sector and not the premium that exists today.

    “Both the private and public sector let people go to balance the books. The public sector may be gentler because it relies more on natural attrition”

    Natural attrition is “not letting people go” – no one is laid off, no one loses their job.

  • MB

    @ Bill, one day I’ll write a book on the misconceptions that exist about both the private and public sectors.

  • Bill

    @MB

    You’re in luck. Modern technology means that anyone can self publish a book at very little cost.

  • rf

    @MB
    “The pensions (private and public) that I am familiar with are simply based on the accumulated employee + employer contributions over time”

    Then you are not very familiar with many, MB.

    The public service plan basically gives you a pension based on the following math.

    Peak 5 year annual salary x 2% x # of years of service.

    Make $60,000 in peak 5 years, after 25 years of service you get 50% of that as an annuity in retirement. You get the full benefit if your age and years of service (combined) equal 85 (90 in some cases).

    Your contributions are based on your salary year to year (typically employees contribute 6%, employer contribute 9%.). Even the best Private sector Defined contribution plans rarely contribute 6%.

    So if your peak average after 20 years is $40,000, but then get promoted in the last 5 years to a job that makes $60,000….you’re pension pays out like you made (and contributed based on) $60,000 the whole way.

    That’s why you see so many late 50, early 60’s year olds take on bigger roles late in their careers. They want that peak salary to go up because it echoes on forever.

    You make an extra $20,000/year for the last 5 years, but you make an extra $10,000/year forever (an extra $300,000 over 30 years of retirement) on your pension.

    But Sparty thinks he makes a valid point by focusing only on his salary. His point may be true, but it only tells half of the picture. The pension is guaranteed CPI indexing as it stands now.

  • MB

    @ rf 28:

    So if your peak average after 20 years is $40,000, but then get promoted in the last 5 years to a job that makes $60,000….you’re pension pays out like you made (and contributed based on) $60,000 the whole way.

    That’s news to me. Thanks for clarifying.

  • MB

    Bill, I was being facetious, as I assume you were.

  • brilliant

    @MB, Spartikus etc. Anyone want to disclose if they’re feeding off the taxpayer teat before defending public sector increases…?

  • Chris Keam

    @Brilliant:

    Where should I look for a list of your investments?

    Hypocrisy is too kind a word for your nonsense.

  • brilliant

    @Chris Keam 32-heavily invested in oil stocks. I like the returns and even better knowing that it makes ecoweenies heads explode.

    And I really enjoy the irony of a freelancer defending the well stuffed pay packets and juicy pensions of civil servants.

  • Bill

    @Chris Keam #32

    Like brilliant, I am always amazed that you defend the rich public sector compensation when you do not enjoy the same security as a freelancer and thought you would favour the individual over the collective. Doesn’t it bother you that you will likely still be working while your buddy Spartikus is collecting his pension cheque and posting his blog from a warm beach? Perhaps you have the security of an inheritance or trust account and don’t have the same worries as the rest of us.

  • Adele Chow

    Thank goodness. None of the perpetual labour chaos of the NPA controlled councils of the past. Garbage piled up every three years under the NPA. They just didn’t care, so we threw the bums out!

  • Jon O’Grady

    Can someone please show me how one arrives at 6.921 % (rather than 7.2% for this settlement)?
    Thanks.
    Jon

  • Norman

    What’s really needed is a contract that addresses the crazy 1950’s work rukes that have truck drivers idle for hours on end or “work” crews of up to 10 people to replace 10 feet of sidewalk. Every time I pass a city “work” crew, I count the number of people standing around compared to those who are actually doing something. The ratio is 5 to1 (the 1 being the worker). I see no reason there shouldn’t be a renegotiation of some of the rules that make this possible.