Nelson city councillor Michael Dailly thinks municipal pay increases should be tied to the average wage in the municipality.
Dailly said Nelson’s average family income of about $60,000 would mean that if a union achieved a three per cent increase, anyone making more than $60,000 would get a raise of $1,800 per year. Such increases could also apply to managers and other non-unionized employees, he said.
Under the current pattern of percentage wage increases, Dailly says, the higher the salary the bigger the raise. He says wages of civic workers typically rise faster than the rate of inflation, requiring tax increases that are a burden for citizens.
“This kind of rate rise results in exponential growth. The bigger the base salary the bigger the increase and this results in runaway growth of those higher than average salaries.”
He said it exacerbates the widening wage gap between middle and high income earners.
Dailly supported his ideas with a 2014 report on local government operating costs prepared by the international accounting firm Ernst and Young, which states that in B.C. between 2001 and 2012, municipal employees’ wages went up 38 per cent, as compared with 19 per cent in the provincial government and 24 per cent in crown corporations including universities. Inflation during this period was 23 per cent.
These figures do not apply to executive salaries, which have remained flat since 2009, according to the report.
Nelson city council endorsed Dailly’s ideas in a February meeting by including the proposal in a list of resolutions it intends to take to the annual meeting of the Association of Kootenay Boundary Municipalities (AKBLG) next month.
The AKBLG is a sub-group of the Union of BC Municipalities (UBCM). The resolution asks the UBCM to urge the provincial government to “create legislation that ties civil sector wage compensation increases to the average family income of British Columbian communities.”
Dailly told the Star that municipalities could start by applying it to their excluded staff (managers and others who are not in the union).
“We could do this now, and set an example. The province could do it with provincial employees.
“If unions took the time to understand the implications of this model and recognized that this would slow top end wage growth and grow the numbers of middle income earners,” he said, “they may see that this is in the best interest of their members and the people who live in the communities where they work. Which also includes themselves. Win-win.”
The president of the Canadian Union of Public Employees for B.C. disagrees.
“City councils have been entrusted by the public to run their city to the best of their ability,” Paul Faoro told the Star. “Why would a locally elected mayor or councillor want the province to take that over? Look at what happened in the school districts. School boards have been paralyzed by the provincial government in the way decisions have to be made.”
The City of Nelson signed an agreement with its 85 CUPE employees last month for a two per cent annual increase over four and a half years.
Faolo recalled that at last fall’s annual UBCM conference, minister of local government Peter Fassbender said if the BC Liberals are re-elected the government will be looking at limits on municipal salaries.
“If I had known this was being debated in Nelson I would have flown to Nelson and been speaking to the council on this matter,” Faoro said.
The city’s resolution to the AKBLG reads:
“WHEREAS salary settlements of municipal employees and emergency service workers are rising unchecked and beyond the rate of inflation of regional average family incomes throughout British Columbia;
“AND WHEREAS the continued escalation of civil salaries is unsustainable since in order to meet the demands of funding these salary settlements, taxpayers are over-burdened with tax increases beyond inflationary increases to provide civil salaries above the average salaries of the communities they live in;
“THEREFORE BE IT RESOLVED THAT the Union of BC Municipalities petitions the provincial government to create legislation that ties civil sector wage compensation increases to the average family income of British Columbian communities.”