Canada's richest 1% getting richer

Argus · February 2, 2013

How does working for the government suck? Pensions and salaries above what market conditions dictate, more holidays, sick days that you can exchange for money if you're not sick, and a 9 - 5 work day. Yeah, most people would hate that.

I suppose it sucks in the way most really large institutions suck in that management is oblivious of the concerns of their employees, and the massive quantities of red tape make any individual's attempt at meaningful contribution or improvement almost pointless. I should further qualify it by saying it's not a terrible job at the lower ends of the scale. Clerks, for example. The higher up you go, though, the more soul deadening the atmosphere becomes. Because the higher up, the more meetings you attend, the more impossible it is to affect real change without, and I kid you not, YEARS of meetings, planning, drawing up various documents for approval by umpteen different areas, etc. etc. Humor is a thing of the past, and looked on suspiciously by HR for offensive content. There are no amenities of the sort you find in most large private sector businesses because the politicians are terrified someone will accuse them of coddling their workers. I've been in private sector office buildings, and most of them put any government buildings where I've worked to shame in terms of the quality of the workplace furnishings and fit-outs. As an example, I visited a friend recently at the RCMP. Lovely building, with a glass ceilinged atrium really nice design. The cafeteria is beautiful and comfortable, and everything just looks first rate. That's because they bought it from JDS Uniphase a few years back. No government built building looks like anything other than a dull, bland, cheaply fitted out institution. Mine has threadbare, stained carpeting and beige cubicles jammed in as close together as humanly possible.

Give you an example of the mindset there. I recently attended a case where an employee was brought before a formal disciplinary hearing because, during an offhand explanation to someone, she said words to the affect of "I mean, you guys must have been thinking to yourselves, WTF, they changed everything without telling us!" It was by way of explanation and apology. Anyway, her manager demanded to know what WTF meant and then filed disciplinary charges against her for using an obscene term. I think of this because, coincidentally, the man who was the hearing officer for this, and decided an official letter of reprimand would be placed in the employee's file, the director, was heard to utter the word "shit" today. Needless to say, no one is going to be insisting he face a formal disciplinary hearing, though.

Edited February 2, 2013 by Argus

Argus · February 2, 2013

Are you serious ? Would you take a job that pays 10K more than you make now to sit in a room for 8 hours a day and do nothing ?

I haven't met anyone working for the government who does nothing. In fact, as I've said before, most work rather hard, even if the work is mostly wasted on absurdly complex, time-consuming and expensive processes ultimately designed to cover every square inch of managements' ass.

Edited February 2, 2013 by Argus

TimG · February 2, 2013

Defined Benefit Pensions are the wisest move for the government in my opinion. First, these plans help attract people and keep them.

Employers are much worse off if demotivated employees stick around to collect a pension (this effect is really noticeable in the teaching profession where young motivated teachers are shut out of jobs because of all the old burned out teachers waiting for a pension). The employer would be much better off if these people left to find a job they enjoyed doing.

So tell me, why is it the fault of the 'greedy employees' that the Illinois government failed, for decades, to properly fund their pension plans despite many warnings over that period?

The problem with defined benefit plans is it is too easy for management to screw them up and leave the shareholders/taxpayers with the bill long after the incompetent management has gone. This is why these plans have to go - it has nothing to do with the employees that get them but if the taxpayer is getting shafted by past bad management decisions then the employees will need to share the pain (in the private sector employees share the pain by losing their jobs and benefits when the company goes under).

If an equivalent in straight cash compensation is not enough to attract employees then the organization has bigger problems that are not going be solved with smoke and mirrors and pension plan. In fact, getting rid of the pension plan would force organizations to address the corporate culture that causes the high turnover in the first place. Shackling employees to a company with a pension plan is an extremely dumb way to retain talent.

Edited February 2, 2013 by TimG

Michael Hardner · February 2, 2013

I haven't met anyone working for the government who does nothing. In fact, as I've said before, most work rather hard, even if the work is mostly wasted on absurdly complex, time-consuming and expensive processes ultimately designed to cover every square inches of managements' ass.

As I said, my question wasn't a dig at Federal Workers, I was challenging the poster's assumption that better paying do nothing jobs are preferable to jobs where you accomplish something.

And, I worked for a time at HRDC as a student, and kept in touch with the people I knew. I wouldn't wish the kind of work you describe on anyone with an active mind, and I base my ideas on restructuring of govt. services on some of the facts you presented.

cybercoma · February 2, 2013

That's right, they're thinking human beings who freely choose to accept a job at blueblood's company. If they feel that their compensation is not appropriate, for whatever reason, they are free to look for other opportunities elsewhere. That's the great thing about a free society. If blueblood really treats his employees poorly as you believe, then they are free to quit and go elsewhere. This leaves people with a lot more freedom than any alternatives to capitalism that have yet been tried.

The problem with your viewpoint is that the amount of money someone makes at a job is not even remotely close to being the sole determinant of whether a person stays at a job or not. Moreover, what happens if there are no jobs that fairly compensate people for their labour? Inconceivable right? The free-market means everyone gets paid a "fair" wage. Except there is no such thing as a free market in our country or anywhere else on earth.

cybercoma · February 2, 2013

An employees share of the profit IS their wage/salary/compensation. That is the "hole" in your "logic". And it is precisely the share of the profit that they agree to when they accept the job. Many companies offer stocks/bonuses to their employees in addition to or instead of just cash, thus tying part of their compensation to the company's performance and profit.

People are entitled to precisely that portion of a company's profits that they agree to in their contract, whether that is their employee contract or the rules associated with being a shareholder.

You know. It's funny because there are some that have argued that the abolition of slavery was detrimental to Africans at first. When they were slaves, the landowners had to pay for food, clothing, and shelter for the slaves, just like any other animal they had on their farms. This was despite there being work for them to do or not. You owned the slave, you were responsible for their well-being. Otherwise, you were just flushing your own money down the drain.

Fast forward to the time of freemen selling their labour. If there was no work on the farm, they didn't get paid. They were free. Free to die in the streets starving and cold. WIth technological advancements work that used to take a month to accomplished, could be done in a few days. While enslaved, the landowner would have had to pay to sustain them for as long as he owned them. Now that they weren't enslaved, they were free to pick and choose their jobs. And when there's no work they just starved to death because no one was responsible for them but themselves.

Since you're literally a rocket scientist, I'm sure you can figure out how this relates to the idea that people are free to just take a job or leave it any time they wish. Freedom isn't freedom.

Michael Hardner · February 2, 2013

The problem with your viewpoint is that the amount of money someone makes at a job is not even remotely close to being the sole determinant of whether a person stays at a job or not. Moreover, what happens if there are no jobs that fairly compensate people for their labour? Inconceivable right? The free-market means everyone gets paid a "fair" wage. Except there is no such thing as a free market in our country or anywhere else on earth.

The term 'fair' is problematic - as economic change pushes wages down in some industries.

But so is the idea of 'loyalty'. My work was globalized and since then, neither employer nor employer seriously thinks it's a real thing.

I heard a relative say her husband's company loyalty was diminished, and I was just floored that the concept still exists. My experience is that companies are starting to figure out that a fair and harmonious workplace is part of good management, and costs the company less on terms of turnover and retention.

TimG · February 2, 2013

Moreover, what happens if there are no jobs that fairly compensate people for their labour? Inconceivable right? The free-market means everyone gets paid a "fair" wage.

"fair" is an arbitrary and subjective measure. If the government does what it can to ensure that the labour market is as free as possible then the result will be "fair" wages for workers. Ensuring a free market in labour means ensuring people have access to education and training, that they have access to income support programs and access healthcare that is not tied to keeping a job. It also means that companies need to be free to lay people off if they don't need them.

In Canada the government basically does these things so the labour market is basically free. Therefore the wages earned here are as "fair" as one can expect.

Edited February 2, 2013 by TimG

Argus · February 2, 2013

Employers are much worse off if demotivated employees stick around to collect a pension

If you're talking about employees who can be fairly easily replaced, perhaps. But if you're talking an institution which administers extremely complex mulch-billion dollar programs the lack of employees with long term knowledge can be catastrophic. It takes years of experience in many of the mid-level positions, and the lack of that experience and the build-up of knowledge which goes with that leads to some pretty expensive disasters.

The problem with defined benefit plans is it is too easy for management to screw them up and leave the shareholders/taxpayers with the bill long after the incompetent management has gone

Any pension plan would be screwed up by management not contributing for decades. There's no way around that.

If an equivalent in straight cash compensation is not enough to attract employees then the organization has bigger problems that are not going be solved with smoke and mirrors and pension plan.

Again, if you're talking relatively lower skilled people you'd be correct. But when you're talking about, as an example (since I work for CRA) tax experts you can rarely pay them what they would make in the private sector to begin with. Once they learn not merely the rules and regulations, but all the back office operational doctrines and what the agency looks for (watches out for) in processing requests and taxes they could make a lot more in the private sector -- screwing the government. There's also the fact the agency doesn't want a high rollover of people who possess all the little secrets it doesn't like to make public about holes in its system I, for example, don't even administer a tax or benefit related program (except peripherally) but I have knowledge gleaned from my work which, if I decided to, could make a whole lot of money, illegally, but with virtually no chance of being caught.

The fact is that while lower level employees do get paid more than the private sector, the higher you go, the more the private sector catches up and passes you by if you're a government employee. What keeps people in place in what is, in most cases, not a very pleasant workplace, is stability, security, and the comfort of knowing exactly what you'll be getting in benefits.

TimG · February 2, 2013

Any pension plan would be screwed up by management not contributing for decades. There's no way around that.

Sure - but the issue is who is on the hook for these screw ups. It should not be the employer because that creates a huge incentive for management to screw it up because of the time lag between bad decisions today and future problems.

If a group of people working for a company want a pension they can set one up and fund it entirely from payroll deductions. The employer's obligation ends with each pay cheque. This would ensure that the people who hope to benefit from the pension are also responsible for overseeing the management of the pension - i.e. the incentives are aligned correctly.

The fact is that while lower level employees do get paid more than the private sector, the higher you go, the more the private sector catches up and passes you by if you're a government employee. What keeps people in place in what is, in most cases, not a very pleasant workplace, is stability, security, and the comfort of knowing exactly what you'll be getting in benefits.

All of these things could be provided without a defined benefit pension plan that leaves the employer on the hook for shortfalls. Edited February 2, 2013 by TimG

Shady · February 2, 2013

All of these things could be provided without a defined benefit pension plan that leaves the employer on the hook for shortfalls.

Yep. Defined benefit pension plans are essentially a ponzi sheme, where John Q Taxpayer if forced to bail them out.

Moonlight Graham · February 2, 2013

Then you are saying that a rising income gap is inevitable. Equality of opportunity is the only policy that can possibly address it. Simply taking money from rich people an using to pay the bloated pensions of public servants does nothing to address the real issues yet this is the inevitable result of any policy that is based on the nothing other than a desire to take more money from rich people.

How am I saying "a rising income gap is inevitable"? Also note that never in this thread have I advocated any specific measures to address this rising inequality, only arguing that it isn't a fair distribution of income. You're not understanding my argument, or you choose to ignore it. I don't just want to "take money from rich people" just for the heck of it, only because I want the world be "a better place" or something arbitrary like that.

My argument is that the rich add economic growth to the economy (to various degrees), as does the work of the 99% bottom income earners (to various degrees). In 1982, Canada's GDP-per-capita was $22,671, and by 2010 it had risen to $35,663, that's about a 60% rise in GDP-per-capita in 30 years. The fact that incomes have risen dramatically for the top 1% income-earners since 1982, but have not risen at all, virtually zippo zero, for the bottom 99% of income earners tells me that in terms of income, the top 1% have benefitted dramtically from this GDP growth while the bottom 99% have not benefitted AT ALL in terms of income, despite both income groups contributing to Canada's 60% growth in GDP-per-capita. Since by simple logic the bottom 99% of earners help add to GDP growth (without their work this GDP growth would be impossible), yet have seen virtually no increase in income, by logic the 99% income bracket is being ripped-off of whatever portion of this GDP growth is due to their work (I have no idea how to calculate what the exact or even rough portion of growth the 99% are responsinle for and have been ripped off is, I only know that it's logically higher than ZERO dollars).

Now you are making no sense. People transition in and out of different income brackets all of the time. 30% of the people in the 1% bracket won't be there in 5 years. Over the course of a lifetime many people will receive windfalls that put them in that bracket for a year or two if they sell a property or business. IOW - the number of people who will be in the 1% bracket at some point in their lives is much higher than 1% - maybe 10 or 20%. The same goes for the other brackets.

You're right, people move in and out of income brackets. This doesn't change the fact that that during any one year approximately only 1% of the working population will be able to earn over 230k/year, and by default, 99% of Canadian workers cannot get into that bracket at any one time. Economic mobility isn't very high if the only way a large portion of Canadians are able to get into the 1% bracket is to sell their house maybe once in their lifetime.

I understand your point that the 1% and 99% income brackets are not unified, never-changing groups. But I also understand that the vast majority of Canadians stay with the 99% bracket the vast majority (if not all) of their lives. How many people do you know what have made $230k in a year, besides selling a property? The fact remains that income inequality in Canada has risen dramatically the last 30 years, and it has benefitted a certain segment of the population. Unless you have had an amazing professional position or own a successful business etc., which is few people, you are unlikely to benefit in income from Canada's GDP growth.

Moonlight Graham · February 2, 2013

We need to preserve the meritocracy and do what we can to ensure equality of opportunity. That does require taxation and government funded services. It could even require more taxation than we have now. But the conversation must start with a statement of the right objective: a society where people have real chance to improve their lot over the course of their lifetime.

If the discussion starts with the wrong objective we will end up with bad policy and worse outcomes. Reducing the gap between the rich and poor is the wrong objective.

For example, if the objective is to ensure equality of opportunity then policies that reduce the cost of delivering government services by limiting public servant pensions is in line with that objective. If the objective is equality of outcome then the cushy pensions for public servants become an untouchable entitlement.

I don't understand why people here don't seem to understand the distinction I am making.

You may not have laid out exactly what you mean by "equality of opportunity" and what this entails. Can you please help me better understand your argument by definining it exactly and give some more examples, ie: also what unequal opportunity would mean in policy also? Yes I started off this thread in a scathing tone, a miskate, but you seem logical so I'm very open to a civil, rational debate on this. We may end up disagreeing more based on ideology than facts.

Edited February 2, 2013 by Moonlight Graham

TimG · February 2, 2013

also what unequal opportunity would mean in policy also?

It is a big topic but equality of opportunity means government programs need to be designed to mitigate the disadvantages that come from growing up in a low income household. This means primarily access to quality education, training programs and jobs. It is impossible to eliminate the advantage that comes from growing up in a rich family (which is why the word 'quality' is used instead of 'equal') but if we have a society where a smart kid growing up in a poor neighborhood has a decent chance of being in the top 20% of income earners in late life then the policy will be a success. You cannot measure that success by looking at the income of people in the 1% group.

The biggest challenge in Canada today is on the training part. Employers no longer have a financial interest in training employees that will leave them for another company once they are trained. Government needs to step in and bridge that gap by working with industry to create apprentice programs for graduates. This is not easy and there are many failures in the past but the inability of new graduates to find jobs is a much bigger problem in the long run than the percentage of income earned by the top 1%.

This focus on opportunities for the young means that entitlements for the old are a secondary concern. So if there is a choice between spending money on education and apprenticeship programs, taxing businesses more (thereby reducing job opportunities) or paying for more for baby boomer entitlements - the entitlements are the lowest priority. That does not mean we throw grandma under the bus - it just means that if we have to make sacrifices we make sacrifices that affect the relatively affluent baby boomer generation before we make sacrifices that affect younger workers (hence my comments on public sector pensions).

Edited February 2, 2013 by TimG

eyeball · February 2, 2013

It is a big topic but equality of opportunity means government programs need to be designed to mitigate the disadvantages that come from growing up in a low income household.

In a lot of cases low income households result from the disadvantages that come from not having the power to influence the government when it's busy allocating opportunity. Case in point as I've mentioned in a related threads, the biggest salmon run in the last 100 years, some 35 million fish, swam within a few miles of hundreds of fishermen and fishing communities along the WCVI and not a single fish was landed amongst them. Virtually every commercially caught fish swam into billionaire's Jimmy Pattison's and Galen Weston's nets.

I fail to see how this can be called anything but corruption. I fail to see why I shouldn't believe it is amongst the biggest reasons for low income households throughout Canada and much of the global economy.

What we need is a program of deep souveillance within the highest levels of officialdom. Concentrate transparency there so honesty and integrity can trickle down through the government the way money is supposed to trickle down through the economy when money is concentrated at the top of the food chain. I'm betting a lot more wealth would flow our way if we did.

Edited February 2, 2013 by eyeball

Argus · February 3, 2013

Sure - but the issue is who is on the hook for these screw ups. It should not be the employer because that creates a huge incentive for management to screw it up because of the time lag between bad decisions today and future problems.

Well using your logic then the employees should also be on the hook for any debts the employer runs up but falils to pay, right?

If a group of people working for a company want a pension they can set one up and fund it entirely from payroll deductions. The employer's obligation ends with each pay cheque. This would ensure that the people who hope to benefit from the pension are also responsible for overseeing the management of the pension - i.e. the incentives are aligned correctly.

Ah so you don't think people should get any pensions. Interesting notion, brings us back to the days of old people eating dog food or freezing to death in unheated apartments. Then again, what good old people when they diminish profits?

All of these things could be provided without a defined benefit pension plan that leaves the employer on the hook for shortfalls.

You seem weirdly determined to exempt employers from any responsibility for anything at all. You want them to get all the profits from an enterprise, be able to treat their employees however they want, and bear no responsibility for poor, even illegal decisions. Are you, by chance, an employer?

TimG · February 3, 2013

Ah so you don't think people should get any pensions. Interesting notion, brings us back to the days of old people eating dog food or freezing to death in unheated apartments. Then again, what good old people when they diminish profits?

No I say that people should be responsible for their own pensions. If a group of people want to participate in a pension plan then they can do so. The idea that employers need to be involved is insane.

You seem weirdly determined to exempt employers from any responsibility for anything at all. You want them to get all the profits from an enterprise, be able to treat their employees however they want, and bear no responsibility for poor, even illegal decisions.

Private companies go bankrupt when managers make bad decisions and shareholders lose all of their investment. That is a pretty hash punishment. I am also not concerned about private sector pension plans because they are on the way out.

But governments generally do not go bankrupt because they have a huge pool of taxpayers that can be milked to cover up mistakes. This means government employees also have to share the pain when the pain comes. From a public policy perspective it makes no sense to pay out huge pension benefits if that means programs for much needier people have to be cut. Or are you arguing that we should close hospitals and schools so you can have your full pension?

Edited February 3, 2013 by TimG

Argus · February 3, 2013

No I say that people should be responsible for their own pensions. If a group of people want to participate in a pension plan then they can do so. The idea that employers need to be involved is insane.

Yes, you're just repeating what you already said. Employers should not pay any pensions.

I'm guessing no sick leave or any other benefits, too, right?

Private companies go bankrupt when managers make bad decisions and shareholders lose all of their investment. That is a pretty hash punishment

Really? Seems to me I read about companies going bankrupt all the time. They shed their debts, get to no longer pay the pensions of their former employees, and then start right up again. Then there are all the ones the government kept afloat in the recent economic disaster. As for the 'pretty harsh' punishment, when it happens, it usually seems to fall on the little people, not on the wealthy CEOs who screwed things up. They tend to fly away with multi-million dollar golden parachutes.

I am also not concerned about private sector pension plans because they are on the way out.

You sound pleased. No more pensions! No more greedy old people stealing the profits from poor, abused, corporate America! Yaaayy!

But governments generally do not go bankrupt because they have a huge pool of taxpayers that can be milked to cover up mistakes. This means government employees also have to share the pain when the pain comes.

Share the pain with whom? Those big shot politicians who continually made dumb decisions and were rewarded by an ignorant electorate? I don't think those guys suffer any pain. As for the electorate, well, they made the bad decisions to vote for morons. Why should they be off the hook while the employees see their pensions taken away?

From a public policy perspective it makes no sense to pay out huge pension benefits if that means programs for much needier people have to be cut.

Come on, Tim. You don't give a crap about "needy" people. If you had your way not only would all employee benefits be removed but so would welfare, unemployment and all public pensions. Let the poor rot in the streets, right?

Are there no prisons? Are there no work houses?

Edited February 3, 2013 by Argus

TimG · February 3, 2013

Yes, you're just repeating what you already said. Employers should not pay any pensions. I'm guessing no sick leave or any other benefits, too, right?

What is the matter with straight cash? Obviously if there are no pensions or benefits to be paid wages will need to go up. Transparency is a good thing.

Really? Seems to me I read about companies going bankrupt all the time. They shed their debts, get to no longer pay the pensions of their former employees, and then start right up again.

You don't seem to understand how a corporation works. A corporation is owned by shareholders who invest capital in the corporation. When a corporation goes bankrupt all of its assets are sold off and the shareholders lose everything. There is no penalty harsher than that. The fact that other people with money come in and create a new company with new shareholders by buying those assets does not give those original shareholders their money back.

Share the pain with whom?

The middle class taxpayer that is expected to fund these pensions.

As for the electorate, well, they made the bad decisions to vote for morons. Why should they be off the hook while the employees see their pensions taken away?

Government spending is about priorities. Cutting programs to fund pensions makes no sense.

Argus · February 3, 2013

What is the matter with straight cash? Obviously if there are no pensions or benefits to be paid wages will need to go up. Transparency is a good thing.

So is reality, but you don't seem to pay it much heed. However much pensions and benefits are cut back there will be no raise in pay to go with it. That's not the way things work or have ever worked.

You don't seem to understand how a corporation works. A corporation is owned by shareholders who invest capital in the corporation

Yes, thanks. I own stock in a number of companies. I have a fair idea how it works. The point you're ignoring is the people making all the decisions wind up relatively scott free, walking away with huge parting bonuses. O'Neil and Thane rode Merrill Lynch into the ground and walked away laughing with tens of millions in pocket. What price did they pay?

Government spending is about priorities. Cutting programs to fund pensions makes no sense.

Do you support the CPP or any of the old age security programs? Do you support welfare?

cybercoma · February 3, 2013

What is the matter with straight cash? Obviously if there are no pensions or benefits to be paid wages will need to go up.

So obvious in fact that it hasn't happened anywhere at any time. Wages do not go up when benefits are cut. People are just unable to save, live paycheck-to-paycheck, rack up credit (which grows the economy, lucky employers), and then starve and freeze to death when they retire.

TimG · February 3, 2013

So is reality, but you don't seem to pay it much heed. However much pensions and benefits are cut back there will be no raise in pay to go with it. That's not the way things work or have ever worked.

One minute you are talking about how important pensions and benefits are when it comes to retaining valuable employees and now you claim that if they were eliminated that the employer would refuse to cough up the equivalent in cash. Your arguments are nonsensical. If pensions are important for employee retention then there will be higher wages offered if they are gone. If higher wages are not offered then you are wrong that pensions are important for employee retention Which is it?

Yes, thanks. I own stock in a number of companies. I have a fair idea how it works. The point you're ignoring is the people making all the decisions wind up relatively scott free, walking away with huge parting bonuses.

Why is that relevant to the discussion? The issue is who pays for bad management decisions and the answer to that question is the shareholder. The fate of the management is quite irrelevant - just like the fate of the politicians who agreed to an unsustainable pension system in the first place or the voters that elected them is quite irrelevant.

You may want to argument that it is unfair that the shareholders get screwed over for management failures and I would agree - that I why I think it is unfair to expect taxpayers living over the next 20-30 years to make up the gap in public sector pensions.

Do you support the CPP or any of the old age security programs? Do you support welfare?

Sure. And I don't want to see OAS cut because public servant pensions are sucking up a huge portion of the budget. Obviously the calculations would be complicated because reducing public servant pensions would increase OAS costs but those details are not relevant to a discussion of principle. In this case the principle is government support should go to those that need it instead of those that are extremely well off due to sweetheart pension deals signed 30 years ago. Edited February 4, 2013 by TimG

Argus · February 4, 2013

One minute you are talking about how important pensions and benefits are when it comes to retaining valuable employees and now you claim that if they were eliminated that the employer would refuse to cough up the equivalent in cash. Your arguments are nonsensical. If pensions are important for employee retention then there will be higher wages offered if they are gone. If higher wages are not offered then you are wrong that pensions are important for employee retention Which is it?

As I've already pointed out, specifically with regard to the federal government, the private sector already pays higher wages for skilled positions, as well as providing generally better amenities, benefits, bonuses, and working conditions. This is because the federal government, for political reasons, is loath to pay market wages lest the media start screaming about all those upper level public servants in limousines, and is similarly reluctant to provide any kind of generosity in terms of building comforts for a similar fear. It provides okay benefits, but the pensions are about the only area where they are often ahead (though not ahead of all private sector unionized groups). You're assuming the politicians give a damn about the quality of employees or their skill level and that's just not the case.

Why is that relevant to the discussion? The issue is who pays for bad management decisions and the answer to that question is the shareholder.

So if the shareholder holds the bag for lousy decisions by management why do you want to exempt the taxpayer who voted for the politicians from holding the bag for their lousy decisions?

Sure. And I don't want to see OAS cut because public servant pensions are sucking up a huge portion of the budget

They're not. Further, as pointed out earlier, which you ignored, a big chunk of the public service pensions never get paid. At age 65, federal pensions are reduced by not quite but almost the same amount as those public servants' CPP benefits. Public servants pay into both, but don't actually get to collect both in full.

In this case the principle is government support should go to those that need it instead of those that are extremely well off due to sweetheart pension deals signed 30 years ago.

What do you consider to be 'extremely well off'?

Shady · February 4, 2013

As I've already pointed out, specifically with regard to the federal government, the private sector already pays higher wages for skilled positions

The problem is that the government pays higher wages, etc for unskilled and lower skilled positions. I would rather government pay more to retain skilled workers, and pay less for unskilled and lower skilled ones. But that would be common sense.

TimG · February 5, 2013

It provides okay benefits, but the pensions are about the only area where they are often ahead (though not ahead of all private sector unionized groups). You're assuming the politicians give a damn about the quality of employees or their skill level and that's just not the case.

Then the government can make it a 100% employee funded and managed plan. There is absolutely no justification for a plan backstopped by the taxpayer.

So if the shareholder holds the bag for lousy decisions by management why do you want to exempt the taxpayer who voted for the politicians from holding the bag for their lousy decisions?

The shareholders liability is limited by the amount of money invested - if there is no money left in the company the employees pensions are cut. The taxpayer liability is unlimited. It is what would happen if owning shares meant you had to pay off company debts with your personal assets - it is unfair and unacceptable.

They're not. Further, as pointed out earlier, which you ignored, a big chunk of the public service pensions never get paid. At age 65, federal pensions are reduced by not quite but almost the same amount as those public servants' CPP benefits. Public servants pay into both, but don't actually get to collect both in full.

It is possible that the net public servant pension liability in Canada may be small. If that is the case then this discussion is academic but this is not true of other jurisdictions. It also does not change the principle that the government should get out of the business of funding employee pensions and leave that up to the employees. Edited February 5, 2013 by TimG