Union contracts increase staff compensation pressures for non-union employers

Union contracts being negotiated and ratified in B.C. could affect salary negotiations at private-sector firms.

In a worst-case scenario this could lead to a wage spiral. Higher wages mean more money is sloshing around in the economy, enabling consumers to buy goods. That in turn pushes up prices for those goods and heightens worker calls for even higher wages.

Private-sector wage negotiations differ from non-union ones because salary increases do not need to be uniform across the workforce. They are also done once each year instead of covering multiple years at once.

Public-sector negotiations, however, influence non-union employee expectations and put pressure on employers.

Plenty of recent public-sector contracts have been negotiated.

British Columbia General Employees Union workers recently ratified a contact that could pay more than 16.5 per cent over three years. Variables in the contract mean it could pay as little as around 12 per cent over three years.

British Columbia Teachers’ Federation members are voting Nov. 16 through 18 on a contract that raises wages about 13.5 per cent over three years.

The biggest public-sector increase by far is to be for full-time B.C. doctors, who will be paid $385,000, up from $250,000 under the current fee-for-service model, if they ratify a contract that would start in February. That would be a 54 per cent jump in compensation, and it comes thanks to what...

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