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Shrinking Wages | Bargaining 2022

May 26, 2022 by Lynelle Yutani 2 Comments

FPSE Bargaining Bulletin #1 – A 6% Wage Cut

This is the second in a series of FPSE Bargaining Bulletins aimed at keeping Locals and individual members better informed about the consequences of rising inflation, ongoing contraction of your faculty rights, and the encroachment of managerial liberties. The ongoing devaluation of labour and the systemic reliance on individual workers to make up budgeting shortfalls has an already strained workforce near the breaking point, read on to see why, under those conditions – even a moderate prediction for the rate of inflation will set your buying power back by YEARS! In this issue, I’ve added some background for perspective.

Lynelle Yutani

President, CCFA

Introduction

Canada is experiencing rates of inflation that have not been seen in over 31 years. The rate of inflation from March 2021 to today has eroded the value of a dollar by 6.7%. In a best-case scenario, the Bank of Canada projects a further 4% decline by 2025.

Bargaining

The BC Public Sector comprises 400,000 unionized employees whose contracts expire this year. BCGEU represents the largest public-sector group. Due to their size and influence, BCGEU often sets the monetary framework for most public sector unionized employees. Currently, BCGEU is demanding a two-year contract with wage increases of 5% in each year or a Cost-of-Living Adjustment (COLA) indexed to the Consumer Price Index (CPI). The BC Government has offered three years with 2% wages increases in each year, plus some money for labour market adjustment measures to address low-paid groups.

Inflation

The real and projected rate of inflation for 2021-2025 is 12.7%. A 6% raise means we will still be more than 6% behind. A Step 1 salary – where the majority of faculty are – of $98,978 from 2021 must increase to more than $105,000 by 2024-2025 to maintain our current purchasing power. The table below shows how the purchasing power of Step 1 salary has fared, and will likely fare, against inflation with a 2% per year increase in the next three years:

If a 2% wage increase in each of the next three years becomes a reality, purchasing power will decrease by 4.4% in 2022, 1.9% in 2023, and remain unchanged in 2024 for a pay cut of more than 6%.

Cost-of-Living Adjustment

In order to keep the purchasing power of wages on par with current inflation and projected future inflation, a Cost-of-Living Adjustment (COLA) proposal should be strongly considered during bargaining. A COLA clause would set a percentage benchmark – for example, 2% – and contain a rule whereupon if inflation in a given time period surpasses that benchmark, the difference between the rate of inflation and the benchmark would be paid out to members.

Conclusion

With the Bank of Canada forecasting inflation to remain elevated for 2022 and running at 4% for 2023, continued erosion of purchasing power looks extremely likely. It will be very important for locals to negotiate wage increases in this round of bargaining that will at minimum maintain purchasing power from the corrosive effects of high inflation.

(FPSE Issue Date 27APR2022)

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Filed Under: News & Announcements

Reader Interactions

Comments

  1. Chris says

    May 31, 2022 at 5:36 pm

    Appreciate this dose of reality. The zero mandate years conditioned us to think of a 2% raise as generous, but that’s not today’s reality.

Trackbacks

  1. Shared Recovery Mandate | Bargaining 2022 says:
    January 5, 2023 at 11:45 am

    […] start with how much we should be making if our wages had just kept up. Maybe you read our previous FPSE Bargaining Bulletin on Shrinking Wages? Well, it’s much worse than we […]

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