The current general-election campaign has given B.C. politicians a welcome opportunity to discuss wages and salaries. Not their own, of course. Other people's.
Take the BC Liberals, who are campaigning against a minimum-wage increase for the province's lowest-paid workers. It is a position emphatically asserted in their party platform (see page 36, here). Boosting the minimum wage, it's claimed, would result in "job losses" and push countless small businesses "into bankruptcy."
The New Democrats, for their part, vow to rollback last summer's salary hikes for B.C.'s senior public servants. And this, too, is a platform commitment (see pages 20, 45 and 47, here). The government -- can you believe it? -- gave its "top aides big pay raises." Oh, my.
But to date nary a peep has been heard from either party about the massive pay and benefit lifts our MLAs awarded themselves just 23 months ago.
Premier's $60,951 raise
How big were those pay raises adopted by the legislature in May 2007? In a word, huge.
Consider the two major party leaders, Gordon Campbell and Carole James. Campbell, premier and head of the BC Liberals, saw his annual compensation soar from $126,638 to $187,589 between 2006/07 and 2007/08. That's a one-year hike of $60,951, or 48.1 per cent.
Carole James, leader of the official Opposition and the New Democratic Party, won a pay hike from $120,762 to $145,373 in the same period. That's a lift of $24,611, or 20.4 per cent.
(These numbers were calculated by comparing each MLAs' pay in the 2007/08 public accounts, pages 7 to 9, here, to those of the previous year, here. MLA compensation for the most-recent fiscal year, 2008/09, which ended on March 31, will not be released until later this summer.)
In total, MLA and cabinet minister compensation -- paid by B.C. taxpayers; that is, the voters -- skyrocketed from $8 million to nearly $9.7 million between 2006/07 and 2007/08. That's an increase of 20.3 per cent -- and does not include increased payments made by British Columbians to the MLAs' pension plan.
The lion's share of the increase, nearly $1.2 million, went to the then 46-member BC Liberal caucus -- an average of about $26,000 per MLA. The 33-member New Democratic Party caucus garnered a total of $478,000, or an average of about $14,500 per MLA.
Four steps to greater wealth
The story, as Tyee readers learned, began late in 2006, when BC Liberal and NDP MLAs connived to create a process that would culminate in sizeable pay increases. Briefly, it was to be a four-step manouevre.
First, members of the all-party Legislative Assembly Management Committee (LAMC) quietly inserted a massive lift for MLA compensation into the 2007/08 fiscal budget's Vote 1 ("Legislature"). Next, Campbell appointed a three-member panel of non-politicians to study MLA salaries and benefits, and make recommendations.
In the third step, the commission's findings were drafted into a bill to be approved in the legislative assembly. And fourth, after passing the legislation, the MLAs voted to approve the Vote 1 expenditures snuck into the budget by the LAMC months earlier.
It seemed foolproof, and the first two steps went like clockwork. So did the fourth, as MLAs from both parties unanimously assented to the massive budgetary increase in Vote 1. But by then the original scheme had gone awry, because the New Democrats belatedly balked at the third step.
James and her New Democratic Party MLAs -- many of whom had met behind closed-doors with the commission to plead for a pay increase -- professed to be shocked at the panel's recommendations. Some even spoke against Bill 37 when it was introduced in the legislative assembly. (And all vowed to contribute their unwanted pay raises to charity, which they did not, but that's another story.)
The bill passed, of course, and B.C.'s legislators -- BC Liberals and New Democrats alike -- obtained a massive pay hike and a sweetened pension. (Although Bill 37 was not passed until May 31, the MLAs thoughtfully made it retroactive to the beginning of the fiscal year, April 1, 2007.)
Hypocritical stand by Libs
That was then. Today those same MLAs who schemed to get themselves a huge pay raise are seeking re-election, and letting us know how they feel about wage and salary hikes for other people. They don't like them, and the numbers they offer to buttress their election platforms simply do not add up.
Take the BC Liberals, whose platform states that "the last thing small businesses need is a $450 million cost imposed by the NDP to increase the minimum wage." The result of such an increase, the Campbell Liberals claim, would be "more layoffs, more job losses and cash-strapped businesses that would be pushed into bankruptcy."
Let's examine that assertion. Assume that someone earning the current minimum wage of $8 per hour works eight hours a day, five days a week and 50 weeks out of the year. That's an annual total of 2,000 hours, putting their yearly income (2,000 hours x $8) at $16,000.
An increase to $10 per hour would push a minimum-wage worker's annual compensation (2,000 hours x $10) to $20,000. That's an increase of $4,000 over one full year.
Using Statistics Canada data, the BC Liberals claim that the number of British Columbians earning the minimum wage is about 50,800. The total cost of the NDP's proposed increase in the minimum wage, therefore, would be ($4,000 x 50,800) about $203.2 million.
How do the BC Liberals more than double that figure to $450 million? Well, instead of using the latest StatsCan data, they're relying on a B.C. Chamber of Commerce report that's at least two years old.
But, using either number, we should remember that B.C.'s economy -- our annual gross domestic product, in real dollars -- is about $200 billion. That means the NDP's proposed hike to the minimum wage would represent a "cost" to the provincial economy of either 0.01 per cent ($203.2 million) or 0.02 per cent ($450 million) of provincial GDP. Is it really possible that such tiny percentages would have the devastating impact on British Columbia as claimed by the BC Liberals?
More importantly, a minimum wage hike wouldn't actually be a "cost", as the Campbell Liberals claim. That's because nearly all low-wage workers would spend their pay raise as soon as they got it. Far from being removed from the economy, a minimum-wage raise would be re-circulated almost immediately.
And is it necessary to add that in B.C., in both 2006 and 2007, corporation profits before taxes were about $21 billion annually -- or about one hundred times the "cost" to businesses of a hike in the minimum wage? (See table A1.4 on page 62, here)
NDP's own double standard
Meanwhile, James and her New Democrats don't do any better with their math. Let's go back to last summer, when the Campbell government awarded pay raises to its non-partisan, senior public servants.
Forty-one deputy ministers had their pay lifted to an average of nearly $218,000 annually, while 117 assistant deputy ministers were boosted to a yearly average of $158,000.
James exploded. "It's not fair to the people who work hard and pay their taxes for the Campbell government to spend their money on massive pay increases for premier's top advisors," she said in an August news release.
Two months later, in a televised address following one by Campbell, James made numerous references to the bureaucratic pay raises, at one point even calling them "obscene."
Now, the NDP platform pledges that a James government would "restore British Columbians' faith in the openness and accountability" (in our politicians) by "rolling back the huge 43 per cent pay increases approved by Gordon Campbell for his top officials and advisors."
First, according to the government (see here), the deputy ministers' pay was bumped up by an average of only seven percent, while the ADMs got an average boost of 21 per cent.
The 43 per cent increase to which James refers was the maximum possible for just one person: Jessica McDonald, Campbell's deputy. But McDonald, following a media and public backlash, rejected that raise in August -- nearly eight months before the NDP released its platform.
Second, the government calculates -- and the New Democrats agree -- that the total cost of its bureaucratic pay raises is $3.15 million annually. Divided between 158 senior bureaucrats, that's an average increase of about $20,000.
James professes to be horrified by that lift, even though it's comparable to the pay raise she and other legislators gave themselves in 2007 ($1.63 million divided by 79 MLAs = $20,600). And, of course, James herself got a hike of $24,611.
Third, the NDP platform claims that the $3 million or so to be saved by rolling-back the bureaucrats' pay raise is part of an overall $1.2 billion in savings they'll achieve in the current and next two fiscal years. The other savings allegedly will be derived from slashing contracted services, whacking the public affairs bureau, cutting government travel, and draining the two-year-old Housing Endowment Fund.
This is, simply, fantastical, especially when considering that these NDP reductions are on top of the $297 million in one year "administrative savings" already outlined in the Campbell Liberals' 2009/10 budget (see page 30, here)
Churlish and mean
If B.C. voters are going to accurately assess election promises on the minimum wage and bureaucratic compensation, it seems only proper that they should do so within the context of the massive pay hikes our legislators gave to themselves barely two years ago.
In that light, it seems churlish for James and her New Democrats to want to take from B.C.'s bureaucrats the same kind of salary increase our MLAs awarded themselves in May 2007.
And as for Gordon Campbell and his BC Liberals seeking a mandate from voters to deny low-income British Columbians an increase in the minimum wage, well, words just can't describe that kind of mean-spiritedness.
A footnote: The 2006/07 public accounts showed that members of the non-political commission studying MLA compensation got $50,000 apiece for their work during that fiscal period. The 2007/08 public accounts show that additional payments were made in that year.
For about three months work, then, Susan Paish and Josiah Wood were paid $75,000 apiece; Sandra Robinson got $76,393.
MOOLAH FOR YOUR MLA: Who got the biggest raises?
The table below shows the incumbent MLAs who are currently seeking re-election, both BC Liberals and New Democrats. They are ranked in order of the pay increases they gave themselves in 2007/08. (The MLAs who are not seeking re-election have been excised from the list.)
|MLA||Party||Salary 07/08||$ Increase||% Increase|
|John van Dongen||Lib||144,567||30,659||26.9|
|Michael de Jong||Lib||152,783||25,741||20.3|
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