The Fraser Institute

The Fraser Institute

October 19, 2005 12:33 ET

The Fraser Institute/Media Release: Fix Public Sector Wage and Benefit Conflicts by Introducing Wage Boards

CALGARY, ALBERTA--(CCNMatthews - Oct. 19, 2005) - Economists with The Fraser Institute today reiterated a long standing recommendation to create wage boards to eliminate, or at least reduce, the acrimony involved in public sector negotiations on compensation.

Wage boards are independent governmental bodies responsible for collecting, analyzing, and recommending (or imposing, if necessary) public sector wages and benefits based on private sector equivalents.

"Wage boards are a mechanism by which to directly link public sector wages to their private sector counterparts," explained Jason Clemens, director of fiscal studies at The Fraser Institute.

Clemens points out that there are essentially two groups of public sector employees. The first group has easily identifiable equivalents in the private sector on which compensation can be based; this includes administrative and clerical staff, accounting and finance, technology, and senior management positions.

The second group is somewhat more difficult because the majority of jobs in these positions are in the public sector; for example, the majority of nurses and teachers are employed by the public sector. Although more complicated, private sector equivalents are available to establish comparisons.

"Rather than the current ad hoc cycle of larger than market increases followed, in some cases, by zero increases or even pay cuts, wage boards are a more rational, sustainable way to achieve reasonable compensation plans for public sector employees," said Clemens. "At the very least, wage boards can provide a benchmark against which public sector wages and benefits can be easily compared."

The Fraser Institute first published work on wage boards in 1980.

Established in 1974, The Fraser Institute is an independent public policy organization with offices in Vancouver, Calgary, and Toronto. For more information, visit www.fraserinstitute.ca.

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