Raising wages and building strength in New Brunswick Toby Sanger, CUPE Senior Economist Gabrielle Ross-Marquette, CUPE Researcher CUPE NB Bargaining Conference, March 2018 This video is an important part of the breaking the mandate movement’s mission. We need to gain a better understanding of why our purchasing power has stagnated over the last couple of decades, and what we can do to make things better for current and future CUPE members. Throughout several years, consecutive governments have instituted what we will refer to as the “government mandate”. This mandate is a pattern of austerity measures undertaken by several consecutive provincial governments to keep public service wage increases non-existent or very low. For eight consecutive years, at different points in time depending on bargaining cycles, the government has maintained the following pattern of general economic increases: 0%, 0%, 2%, 2%, 1%, 1%, 1%, 1%. This pattern has played out slightly differently across collective agreements, but as we can see, increases have been kept at minimum, or at 0%. This mandate has had a direct impact on CUPE members. We’ll talk about this today.

What We’ll Cover Today 1 2 3 4 Real wages and purchasing power Overview of two concrete tools 2 New Brunswick’s economic situation 3 The impacts of wage increases on the economy 4 What We’ll Cover Today

Public sector workers in New Brunswick are paid less than all other provinces

Public sector workers in New Brunswick are paid less than all other provinces

Public sector workers in New Brunswick are paid less than all other provinces

Basic cost of living relatively high in New Brunswick Market basket measure = “The MBM is a measure of low income based on the cost of a specific basket of goods and services representing a modest, basic standard of living.” (Statistics Canada, http://www.statcan.gc.ca/pub/75f0002m/2013002/mbm-mpc-eng.htm) It is calculated as the cost of purchasing these items: A nutritious diet as specified in the 2008 National Nutritious Food Basket (Health Canada 2009). A basket of clothing and footwear required by a family of two adults and two children. Shelter cost as the median cost of two- or three-bedroom rental units including electricity, heat, water and appliances. Shelter cost of mortgage-free owners is no longer reflected in the thresholds, but rather in the disposable income of individual reference families for whom it applies. Transportation costs, using public transit where available or costs associated with owning and operating a modest vehicle where public transit is not available. Other necessary goods and services.

Provincial mandate wage increases have led to real wage losses

Provincial mandate wage increases have led to real wage losses

Provincial mandate wage increases have led to real wage losses

Provincial mandate wage increases have led to real wage losses

Possibility of talking about tools available to locals (real wage calculation through their reps + online web page graphs per local/classification)

Bigger pay hikes for those at the top

Economic situation of New Brunswick

Deficit shrinking and will soon reach balance GDP: Gross Domestic Product From Stats Can website: “Gross domestic product (GDP) is the total unduplicated value of the goods and services produced in the economic territory of a country or region during a given period. GDP provides a wealth of information. This aggregate is often referred to as the economic report card of a country. The level of GDP reveals information about the size of an economy while the change in GDP from one period to another period indicates whether the economy is expanding or contracting.”

Debt interest payments at long-time low as share of GDP

New Brunswick could achieve surplus with progressive tax measures

Do higher wages for workers benefit the overall economy?

Public spending much better for economy than tax cuts Example: If federal government invests $1million in child care, it not only generates 40 jobs, but it also impacts the GDP by $2.25million.

Economic multiplier impacts for New Brunswick: jobs created per $1 million by sector Particularly for New Brunswick

Follow the CUPE dollar… Works 40 hrs/week in 2017 $1,271.71 More to spend CUPE MEMBER Actual wage $20.38 $42,390.40 With 3% more… $20.99 $43,662.11

Follow the CUPE dollar… $635.87 spent in accommodation and food services $317.92 spent in dental services $158.96 spent in house repairs $158.96 spent in recreation activities Results in virtuous circle of: Increased private sector jobs and revenues More spending money for workers (e.g.: tips) Higher government revenues More people joining workforce, staying in or moving to New Brunswick Lower government spending on social services and health due to joblessness, poverty Higher long-term growth and productivity CUPE MEMBER

Last words It is only by educating ourselves and circulating knowledge that we will be able to break this austerity cycle.