Issues about fairness in public sector and private-sector compensation will become more contentious as the economy recovers, writes Jack Mintz in the Financial Post. Below is an excerpt from the article, which can be read in full here. 

By Jack Mintz, May 13, 2020

Canada’s hefty job loss in March and April comes as no surprise. In total, we lost over three million jobs. Another 2.5 million of us are still employed but working fewer hours. Of 20.3 million people employed in February, 28 per cent have lost their jobs or are working fewer hours.

Not since the Great Depression have we seen job losses on this scale. But let’s not confound these two historic economic contractions. Today’s sharp downturn is not a depression unless it lasts more than two years. We all hope that, once the virus is contained, that will not happen.

This recession is also unique in that employment losses are not the same across all industries. The Great Depression resulted from a general demand shock accompanied by monetary and fiscal contraction. This recession involves sector-specific demand- and supply-shocks due to health restrictions and social distancing, offset by impressive injections of fiscal and monetary liquidity.

In this recession, the “haves” are those with employment and income security. In the private sector, people are continuing to work if their employers are in essential industries and are making enough income or receiving a large enough federal wage subsidy to keep their employees on the job. Some employers without paying customers have had to let their workers go.

But not in the public sector. Governments not only provide jobs but continue paying the same wages and benefits even in distressed times — or even more: MPs declined to delay their scheduled wage hike in the midst of this job-destroying recession.


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