Saturday, August 09, 2008

Massive pay hikes to bureaucrats spell higher taxes

The massive pay hikes for B.C. deputy and assistant deputy ministers announced Friday show the provincial government is out-of-touch with taxpayers ability to continue to pay for an expanding public sector.

The province says its new pay schedule for executive level public service employees will bring B.C. more in line with other jurisdictions across Canada, but the deputy minister to the Premier's salary increased by 43%, from $243,936 to $348,600, making her the highest paid of any province. Meanwhile, the average weekly wage rate in B.C. went up by 3% (not corrected for inflation) between 2006 and 2007.

The government seems to be taking its cue from its own 30% pay hike last year. Unfortunately for those of us left to pay these bills, municipal politicians and city workers have also jumped on the pay hike bandwagon.

There is only one taxpayer, and at this rate, these pay hikes have the potential to spiral completely out of control, leaving taxpayers with less and less of their own money to spend.

At the same time, these pay hikes create upward pressure on salaries in the private sector, making it more difficult for businesses to hire scare labour resources. This could have serious long-term consequences for economic growth in the province, because the private sector creates wealth and the government redistributes it. We can expect lower economic growth in the future if government forces up labour costs and raises taxes to pay for them.

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