Leftwords: Defending Public Healthcare

Privatized P3s make up lion share of "ticking time bomb" of debt

2012-02-07T10:38:00.000-05:00

British "taxpayers face a £200bn ticking timebomb from long-term spending commitments that have not been properly costed," the Independent reports. "The Commons Public Accounts Committee criticised the Treasury for not keeping a grip on the 'staggering numbers' involved in 'spend now, pay later' projects which are a storing up massive bills for future generations."

Most of the debt (£131.5 billion) is for privatized P3 (public private partnership) projects, primarily hospitals and schools. The P3 debt is "four times more than the assets secured by the deals".

The other £70 billion of unaccounted debt is for decommissioning nuclear power stations and outstanding claims for medical negligence.

The government promises to end P3s "as we know it" (although the changes the Conservative government will implement will almost certainly be less than one might hope).

Ontario merrilly continues with its own P3 program for hospitals, even as it moves to reduce public services on the grounds of unsustainable debts.

Rising hospital bed occupancy and rising superbugs

2012-02-06T09:30:00.000-05:00

Dr Charles Saunders, deputy chair of the British Medical Association Scotland, recognizes that Scotland has made progress fighting hospital acquired infections, but flags the threat rising bed occupancy now poses:

"There is pretty good evidence that once you get high bed occupancy rates then it is very difficult to stop a lot of HAI. Part of that is because you don't have time to get things properly cleaned and partly it is because once you get to those high rates, you tend to move people around hospitals a lot. So they get admitted to one ward and maybe go through three or four different wards in the next few days. If they have anything when they come in, they have an opportunity to spread it quite widely and they also obviously increase the opportunity they have to pick up stuff by being in different wards."

Yet, Scotland has more than twice as many hospital beds per capita compared with Ontario. -- Ontario has one of the highest hospital bed occupancies in the developed world.

Dr. Saunders also warned financial constraints on health boards could have an impact on tackling the superbug problem in the coming years.

"Pressure on budgets is probably going to put more stress on hospital systems in terms of turnover and pushing more people through perhaps than can be done so safely. I think we are likely to maintain where we have got to, but it will make continuing improvements more difficult."

Austerity, however, is not just threatening Scottish hospitals -- it is also threatening Ontario's.

Fewer layers of administration in Ontario health care?

2012-02-05T09:30:00.000-05:00

One interesting line in the Ontario government's new "Action Plan":

"In addition to integrating family health care into LHINs, we will introduce further reforms to promote more seamless local integration, with fewer layers of administration, to ensure we have a system truly structured around the complex needs of an aging population."

What might "fewer layers of administration" mean? That is unknown, at least to this writer. But some have pointed to the oddity of the Ministry of Health and LTC funding the LHINs, the LHINs then funding the CCACs, and the CCACs then funding the contracted home care providers. Especially as the CCACs have been restructured so their boundaries coincide with the LHIN boundaries.

Other thoughts?

Privatized P3s need $2.4 BILLION MORE from taxpayers

2012-02-04T09:01:00.000-05:00

Privatized P3 (public private partnership) hospitals in Britain are proving so expensive that seven of them will get £1.5 billion ($2.4 billion) in emergency funding from the government to help them avoid cutting patient services, the Guardian reports.

The hospitals will be able to access the £1.5 billion over the next 25 years, until their P3 contracts end. Andrew Lansley, the British health secretary, said he had been forced to use taxpayers' money because certain hospitals could no longer afford their P3 deals.

The Conservative health secretary blames the previous Labour government for bungling the P3 deals, although critics of P3s had long claimed that the deals were far too expensive.

"The problems facing some parts of the NHS left to us by Labour now have to be sorted out. Tough solutions may be needed for these problems, but we will not let the sick pay for Labour's debt crisis," the Conservative health secretary claimed.

The Guardian notes that without the fund, the hospital services would be put "at severe risk" because of the P3 deals

The health secretary acted after 22 hospitals told him their P3 debts were endangering their financial or clinical future.

Ontario continues to develop new hospitals through P3 projects, with no public comment about the P3 failures elsewhere.

60 hospital beds closing -- 62 layoff notices

2012-02-03T16:30:00.000-05:00

Health Sciences North in Sudbury has issued layoff notices to 62 staff as the hospital moves to shut down 30 beds March 31, 2012. Another 30 are scheduled to shut March 31, 2013. All 60 beds are at the hospital's Memorial site.

The Hospital defends the cuts, arguing that ambulatory clinics will replace the beds, the Sudbury Star reports.

But Dr. Stephen Kosar, president of the Sudbury and District Medical Society is skeptical, adding that he is hoping for a stay of execution: "Maybe the governor will make a call before they walk down the green mile."

The beds to be closed are serving alternative level of care (ALC) patients. There were 43 ALC patients in acute-care beds at the main hospital and 61 at the Memorial site on Thursday. The Star reports that the "hospital has fewer beds than planners wanted and they said it would only be large enough to serve the community -- and the region -- if it had no ALC patients."

EMS costs up and ambulances delayed. More to come?

2012-02-02T20:44:00.004-05:00

The overload on hospital beds is catching up with Windsor/Essex Emergency Medical Services (ambulance services).

The Windsor Star reports that the time spent by EMS paramedics waiting in hospital emergency rooms has increased 350% since 2009, increasing from 2,653 hours in '09 to 9,557 hours in 2011. EMS paramedics can't leave a patient at a hospital until the hospital takes over care, but sometimes hospitals are so backed up they have no room for new patients.

The dramatic increase in "off-load delays" has driven up EMS costs, the Star reports.

But, aside from driving a cost explosion, the off-load problems are also delaying EMS response time. "We have a limited amount of ambulances in the county," EMS Chief Randy Mellow told the Star. "There are times when we delay non-emergency calls sometimes up to an hour if we don't have an ambulance."

The off-load delays stem from a bed shortage in Windsor that spiked after a "public private partnership" (P3) long term care project failed, sparking a serious backlog in Windsor hospitals.

With hospital cuts planned by the provincial government, this may well get worse.

Ontario Health Action Plan does not add up

2012-02-01T12:24:00.005-05:00

The Ontario government's Health Care Action Plan, announced yesterday, will mean less public health care.

As has been the constant refrain for decades, the official plan is to move patients from hospitals to home care. The idea is that hospitals are expensive and home care is cheap.

But the plan does not add up. The home care hours promised - 3 million -- mean spending about an extra $75 million, based on government figures.

That's a tiny drop in the bucket of the government's $47,139,590,260 ($47 billion) health care spend: less than 2 tenths of one percent. It may make up for population growth this year. It may even make up for the aging population (this year). But is it going to also reduce the 10,000 person home care wait list, divert people from ending up in long term care facilities, or offset hospital cuts? No way -- it's a pathetically small increase by any standard, never mind by what the government says it is doing.

As in the past (with the Mike Harris government), the plan appears to be to pretend to increase home care, to justify the cuts in other health care services.

Lowest rated P3 ever goes to market (& costs rise)

2012-01-27T11:15:00.001-05:00

The largest public private partnership (P3) bond financing in Canada has raised $1.37 billion for a new Montreal hospital. It is for what must be one of the longest P3 deals as well -- a 38.8 year deal to build, finance, and maintain the Centre hospitalier de l'Université de Montréal (CHUM).

The National Post reports that the four equity partners in the P3 deal are all European corporations. Canadian and Quebec partners were squeezed out once again, it seems.

The P3 financing deal is also the lowest-rated one ever to come to market. The Post reports that the bonds came with a 6.721% coupon.

"Part of the difficulty attracting buyers was the credit profile of the investment. The issue was rated BBB (high) by DBRS, one notch higher than the Baa2 assigned by Moody's Investors Service Inc. Every single P3 that has been broadly marketed so far in Canada has enjoyed an A-level rating."

The Post goes on to note:

"If the CHUM deal proved one thing, it's that issuers don't need A-category credit ratings to do bond transactions in the P3 world. It also showed that there's no natural limit on the size of such transactions. ... 'It's really just one more deal,' Mr. McCallum (of RBC Capital Markets, which underwrote the deal) said, modestly. 'There's a maturing of the sector. And this deal is another marker in the maturing of the sector.' "

Critics argue that the cost of financing P3s is too high, and that government financing is more affordable than private financing.

This deal raises the cost of P3s to even higher levels.

$15 to $22 million in hospital cuts forecast

2012-01-26T13:06:00.004-05:00

Hamilton Health Sciences is warning that it will have to cut costs by $15 to $22 million, the Hamilton Spectator reports. The range in cost cutting is based on funding increases in 2012-13 of either 0% or 1%.

The hospital expects about 140 jobs will be affected, but says its goal is to accomplish the cuts through attrition rather than layoffs.

The hospital Executive Vice-President, Murray Glendining, told the Spectator that he is getting “a little nervous” the hospital won’t get the 1 per cent increase.

Privatization works! More Americans lack health insurance

2012-01-24T11:32:00.001-05:00

Gallup reports that the percentage of American adults without any form of health care insurance has reached the highest level since they began tracking coverage in 2008.

In 2011, 17.1% of adult Americans had no health care insurance. That is up from 14.8% in 2008. The percentage insured has declined every year since the report started.

Gallup reports that it asks 1,000 American adults each day about their healthcare coverage and reports monthly, quarterly, and annual averages. In December 2011, the monthly percentage of uninsured adults increased to 17.7%, tying July 2011 for the highest on record.

The USA is leading example of health care privatization in the developed world.

High P3 maintenance costs shortchange patients: Conservative MP

2012-01-22T09:01:00.000-05:00

More complaints about the high cost of basic maintenance in "public private partnership" (P3) hospitals are coming.

This time, Dr. Dan Poulter, the Conservative Party British Member of Parliament for North Ipswich and Ventral Suffolk, has complained about the costs of "odd jobs" in the local P3 hospital. P3 hospital deals typically require the contracted private company to provide maintenance in the hospital -- rather than regular public hospital staff.

EADT24 reports that the hospital paid £120 ($190) for contractors to assess a door which had given someone a static shock. After investigating, the maintenance firm said the door was not its responsibility, but the hospital was still forced to pay for the call-out. Since 2008 there have been 14 call-outs to replace the glass on a fire alarm costing £1,680 ($2,650).

Dr Poulter said: “Patients are being short-changed because of this, money which should be being spent on them is being spent on these fees. It is crippling our finances and at a time when the hospital faces 250 redundancies, this is not a fair deal for the hard-working doctors and nurses."

Dr. Poulter adds:“I think the fact that so much is being spent on these maintenance jobs shows that the management failed to negotiate the PFI (i.e. P3) deal properly.

911 EMS calls get a lot longer: Hospital offload delay cited

2012-01-21T16:01:00.000-05:00

Paramedics are spending 10 minutes longer on emergency calls in 2011 compared to 2010 in Hamilton. EMS Director Brent Bowett told the Hamilton Spectator that time is mostly spent off-loading patients at hospitals.

Hospital bed overloads ultimately back up in emergency rooms, forcing paramedics to wait until hospital staff can assume care for ambulance patients.

Hospital restructuring and a growing demand for EMS are also cited as reasons for the growing strain on the EMS system.

Mario Posteraro, the head of OPSEU local that represents paramedics in Hamilton, told the Spectator, “Clearly there’s a need for additional front-line services. I think we’ll be back before council asking for additional resources".

Hamilton city councillors want the province to provide an additional $585,000 for an extra ambulance crew to be on call 12 hours a day, seven days a week. That would cover 100% of the extra costs. (Typically the province pays 50% of approved costs only.)

The province, however, shows little interest in maintaining existing service levels. The provincial government is trying to to soften up the public for more cuts in service levels via a new report from Bay street economist Don Drummond.

Time will tell which side wins out -- more cuts, or maintaining service levels.

Photo: Hamilton Spectator

Health care spending crisis? Not really. Is Don Drummond listening?

2012-01-19T22:54:00.000-05:00

Carol Goar at the Toronto Star demonstrates that health care spending has actually shrunk as a percentage of total Ontario government program spending. It has fallen from 46% to 42% of program spending over the last ten years. This despite repeated claims by Ontario finance minister's that it would increase.

Don Drummond, who is preparing a report on public services for the Ontario government, has also made dire forecasts about health care spending as a proportion of the provincial budget (claiming it will hit between 70% and 80%).

Unfortunately there is little likelihood that the reality of health care spending will impact Drummond's report. He is a man on a mission -- too bad for health care.

Goar's article, "Health budget math doesn't add up" is available by clicking here.

Drummond Commission: Cross province public hearings?

2012-01-05T10:28:00.000-05:00

Don Drummond continues to speak to all and sundry media about the approach his Commission into Ontario public services will propose. A Mop and Pail columnist suggests that at "the heart of the new spending model would be a much tighter clampdown on health costs than Dalton McGuinty’s government has previously forecast."

The current funding plan from the government is to increase health care funding by 3% per year.

Drummond told The Toronto Star columnist Martin Cohn: “There are going to be a ton of things in our recommendations that the government is not going to be pleased with. And the public should also brace for bitter medicine: “There will be lots of negative reaction, lots of anger.”

Cohn suggests Drummond may propose health care funding increases be scaled back to 2.5%, instead of 3%. As for the other parts of the public sector -- well they face deep cuts, according to Cohn.

Cohn also suggests that Drummond wants have public hearings on his proposals around the province. That could prove interesting.

£1,942,842 spent on routine maintenance for P3 hospital

2012-01-04T19:08:00.001-05:00

Here's a report on a recent investigation into spending for routine maintenance at a British public private partnership (P3) hospital:

"The North Cumbria Hospital Trust has paid £466 to replace a light fitting, £75 to install an air freshener, £184 to have a bell put into a reception area, £977 to install six double sockets, £110 to fit a shelf... and so it goes on. It goes on to the tune of £1,942,842 spent on routine maintenance in 2010/11. This from a debt-ridden trust haemorrhaging £1.2 million a month."

£1,942,842 is over $3 million. The investigation into the P3 was done by the British Conservative Party, hardly a bastion of anti-privatization bias.

A number of the British P3 hospitals are so weighed down by the cost of their P3 deals that they have asked government for special compensation to help them pay their bills. Here is the conclusion reached by the editorialists at one local British paper:

"Ministers are urgently considering this which will, of course, mean taxpayers again footing the bill for hospitals’ inability to pay routinely inflated bills."

Hospitals embracing new levels of openness? I wish.

2012-01-03T16:42:00.001-05:00

The Ontario Hospital Association today claims that "Ontario hospitals have been a driving force behind the extension of FIPPA (i.e. freedom of information legislation) to their organizations and are embracing the new levels of openness that the legislation is bringing to their organizations."

This is laying it on pretty thick as the OHA, along with the insurance industry, helped secure an amendment from the government earlier this year to freedom of information legislation that allows hospital CEOs to deny requests from the general public for access to an array of information regarding quality of healthcare in hospitals.

As Ontario Health Coalition Director Natalie Mehra observed at the time: “Today, (the government) undid a substantial portion of its own legislation passed last fall to expand hospital accountability in the wake of the e-Health scandal.”

It would be nice to think the hospitals might become more open and transparent, but it is hard to believe. Time will tell.

No ambulances available for 911 calls

2012-01-02T18:17:00.000-05:00

A shortage of hospital beds led to 32 Code Reds in February 2011 in Waterloo Region, The Record reports. "Code Reds" occur when no ambulances are available to take 911 calls. One Code Red lasted four hours on Feb. 14.

A shortage of hospital beds is forcing paramedics to wait in emergency rooms to hand over patients to hospital staff, the Record reports.

Regional politicians are being asked to hire five more paramedics to improve EMS response times. In effect, hospital shortages are driving up municipal costs.

Waterloo Region ambulances reach 90 per cent of emergencies within 12 minutes and 32 seconds, up 33 seconds over 2010. The legislated response time is 10 minutes and 30 seconds.

The Director of the Waterloo EMS told the Record that off load delays fell in October and November after the service started taking patients to a less-busy hospital even if the hospital was not designated for the patient’s symptoms. “It was safer for a patient to be in the wrong hospital, than it was to be in the right hospital but in a hallway lined up with people,” he said.

2/3 of paramedics report verbal, physical, or sexual abuse on the job

2011-12-31T16:19:00.001-05:00

New research from St, Michael's Hospital in Toronto suggests that more than two-thirds of paramedics have experienced verbal, physical or sexual abuse on the job.

"EMS providers can experience violence in the workplace as they perform their jobs in unpredictable environments and near people in crisis," said Blair Bigham, the lead investigator.

"Anecdotal reports and workplace safety records have highlighted cases of verbal, physical and sexual abuse, yet until now, there has been little scientific research. More research is needed to understand the impact of this workplace violence."

The study found:

Verbal abuse was reported by 67.4 per cent of EMS workers surveyed.
Intimidation was reported by 41.5 per cent.
Physical abuse was reported by 26.1 per cent.
Sexual harassment was reported by 13.6 per cent.
Sexual assault was reported by 2.7 per cent.

Patients, or patient family and friends were the most common perpetrator.

The study was based on a survey of 1,381 paramedics in Ontario and Nova Scotia. Most (70%) were male. The median paramedic was 34 and had 10 years experience in EMS.

Economic recession driving mental health problems

2011-12-31T00:57:00.001-05:00

British charities have warned that people's fears over losing their jobs and homes have fuelled a massive 20 per cent jump in the number of people suffering from mental health problems in 2011.

And the British National Health Service has reported that nearly 10 million more prescriptions were issued for anti-depressants in England than at the start of the crisis in 2007, a 28 per cent rise. Mental health charities said the stress of recent years means more people are experiencing mental health problems.

At the same time, British public health care is being squeezed.

Is the same true on this side of the pond? I haven't seen the figures -- but I wouldn't be surprised.

Ornge air ambulance only the tip of the iceberg?

2011-12-27T10:19:00.003-05:00

The Toronto Star concludes an editorial on the Ornge affair (where the Star revealed that the top boss of the air ambulance was raking in an incredible $1.4 million annually) that Ornge should be more accountable to the public.

...Ontarians deserve more transparency and accountability from an entity that runs largely on $150 million of taxpayer funds and provides a vital service. At a time when the health system is under financial pressure, we need to know that public money is being properly spent.

Quite right.

But the excuse used for not revealing the enormous pay out was that Ornge (a not-for-profit entity expected to report its top salaries to the public) had set up for-profit entities. The Star does not mention that many, many totally for-profit outfits get bags of money to provide public services and are under no obligation to report publicly.

What about them? Don't we also "need to know that public money is being properly spent"?

P3 hospitals forced to spend "EXTORTIONATE SUMS" on contractors -- Health Minister

2011-12-23T12:53:00.000-05:00

Last night Andrew Lansley, the British health minister, condemned the high fees charged by private corporations to do basic repair work in public private partnership (P3) hospitals. P3s allow private corporations to become involved in the financing and maintenance of hospitals. Ontario has followed Britain into using P3s for hospital projects.

Lansley told the Telegraph: "[Hospitals are] being forced to spend extortionate sums on private contractors rather than spending that money on helping sick patients get better."

The Telegraph (a conservative newspaper) reports that a series of Freedom of Information requests has disclosed how hospitals that are locked into long term P3 deals are forced to pay “hyper-inflated” charges for basic services. Figures uncovered by the Telegraph show the following examples of charges from private corporations that won P3 hospital contracts:

North Staffordshire hospital paid £242 to put on a padlock
North Cumbria University Hospital paid £466 to replace a light fitting and £75 for an air freshener.
A hospital in Salisbury paid £15,000 to “install a laundry door following feasibility study”.
£8,450 to install an “additional dishwasher” for a hospital in Hull,
£962 to “supply and fix notice-board” at a hospital in Leeds,
£26,614 for the “replacement of shower room doors” at the Sussex hospital,
The Coventry and Warwickshire University Hospital was charged £4,459 to “supply and install a new CCTV camera”,
Ipswich Hospital was billed £120 to call out an engineer to reset an alarm. The same trust in Ipswich also was charged four separate payments of £120 on false call-outs.

These costly P3 deals are causing significant problems for British public healthcare – 22 hospitals appealed to the Department of Health earlier this year for financial support because high P3 bills threatened their clinical and financial health.

No one from the PPP Forum, which represents construction companies, financial businesses and law firms that make money from 'PFI' (the British name for P3s), was available for comment to the Telegraph.

The Conservative Health minister Lansley blames the previous government for the mess: “Unless we take action, these post-dated cheques left to us by Labour could seriously impact on patients. That is why this Government is working with trusts with PFI related financial problems. We will not make the sick pay for Labour's debt crisis.”

Last month, George Osborne, the Chancellor, published plans to overhaul PFI. But, despite all the complaints from the government about PFI, it is unlikely the Conservatives will make any fundamental changes.

Hospital closures on the Drummond agenda?

2011-12-22T11:09:00.003-05:00

The Toronto Star reports that the Drummond Commission is looking at the Saskatchewan hospital closures of the 1990s as a model of reform, with the support of the Minister of Finance, funding hawk Dwight Duncan.

Next month, the treasurer will get some political cover from a commission engineering a massive overhaul of Ontario government services, headed by influential economist Don Drummond. Health care is at the top of the hit list.
After working on two recent studies of health-care inefficiencies, Drummond's reform agenda is no secret: reintegrating the system; and reallocating more money to health promotion, community care, home care and long-term care....
They are also looking at a far more painful and protracted restraint exercise, one that gets relatively little attention: In the early 1990s, Saskatchewan's new NDP government faced a financial reckoning when credit rating agencies started downgrading the province's debt. Then-premier Roy Romanow resolved to close 52 hospitals and reopen them as well-being centres offering community-based care. He ignited a firestorm.
Drummond has looked closely at the Saskatchewan experiment because it comes closest to a sustained transformation of government finances.
It's a lesson Duncan has also heeded. The treasurer has taken to telling his fellow Liberals in caucus and cabinet that the prairie New Democrats pioneered an ambitious reform model - and provide an example of how good government can be rewarded by voters in the next election.

Why they might think the two models are comparable is unclear. The 52 small hospitals closed in Saskatchewan in the 1990s are nothing like the hospitals in Ontario. In total, Ontario has 155 hospital corporations operating 211 hospital sites for a population of 13 million. As many cities have multiple hospital sites, we probably have hospitals in about 190 towns and cities.

If Saskatchewan had the same number of hospitals per capita, it would only have 12 or 13 hospital corporations with about 16 hospital sites in 15 towns.

But the story in Saskatchewan is completely different. Even now (may years after the 52 closures) there are hospitals in 40 towns spread around the province.

If Ontario had the same number per capita, we would have hospitals in 520 towns. We would need to open up hospitals in another 330 towns to get to Saskatchewan's level of service.

Moreover, Drummond and Duncan have the tricky business of explaining why they want to follow a hospital model that costs about 20% more per capita than Ontario's system does.

Canada Health Transfer -- Our day may come

2011-12-21T10:52:00.002-05:00

The Conservative federal government has taken advantage of their majority status and announced that they will reduce funding increases to the provinces for health care in the years ahead.

A smart move on their part -- the Conservatives don't like public health care much, so it is no surprise they don't want to fund it. They have done little or nothing to enforce the Canada Health Act and only announced that they would maintain Canada Health Transfer funding increases in the face of an electoral 'gun' (when they hurriedly made up health care funding policy during the election, after the opposition made health care funding an election issue). And they no doubt are hoping that perceptions about the economy and the fact that they are years from the next election will allow them to slip this through.

But the economy may well improve and an election will come before the Conservatives cut the funding. So our day may come...

CUPE has called for a collaborative approach on public health care funding: don't dictate, negotiate.

Old ideas are new again. Drummond & the OHA

2011-12-20T12:20:00.000-05:00

Star columnist Martin Cohn reports that the Drummond Commission into Ontario public sector reform has taken a major interest in the thoughts of the Ontario Hospital Association.

The OHA reportedly claimed to Drummond that "Ontario's current situation is much more challenging than in the 1990s... With regard to hospitals specifically, the current situation is much more difficult than in the past."

Cohn concludes:

The government could save billions with coordinated strategies to avoid institutionalized care for the frail elderly, for example with homemaker services. That's why the OHA suggested to Drummond that funding for community care, mental health and addiction services should increase by 5.5 per cent - far more than now budgeted.

Where would the money come from? This is where the big hospitals are showing leadership by sticking up for the little guys - likely at their own expense: "Given that this sector has the smallest overall budget (about $2 billion) ... new investments are clearly needed and these can be made possible through careful shifts in funding."

Despite Cohn's gushing support, this idea is actually very, very old. It's been official policy for many years. And, in fact, since 1980, they have cut 30,000 hospital beds in Ontario.

On the home care side -- well, as usual, there is more rhetoric than reality to the promises to increase services when they cut hospital services. Home care actually gets a smaller chunk of the funding pie than it did years ago. And I expect much the same this time around -- the government's funding plans for home care are abysmal.

But stay tuned for a lot more rhetoric justifying cuts to hospitals services...

Workers' increases less than 1/2 of economic growth

2011-12-19T06:00:00.000-05:00

Amidst all the hysteria over public sector wages (Tim Hudak has again demanded a wage freeze for public sector workers) it is useful to ask if public sector workers are taking more than their fair share of the economic growth in Ontario --or if they are falling behind.

OCHU's comments to the Don Drummond Commission on public sector reform in Ontario, reviews just that question and finds that since 1995 hospital wages have risen less than half as quickly as the nominal growth in the economy.

Wages are paid in "nominal dollars": they are not, unfortunately, protected against inflation. So you might have a higher dollar wage than you did ten years ago, but if inflation has increased more rapidly than your wage, you are actually less well off. As a result, the comparison between "nominal wages" and "nominal growth" (economic growth including inflation) is appropriate. Are the nominal dollars we are paid keeping up with the nominal growth in the Ontario economy?

In fact since 1995 nominal hospital wages have gone up 42.6%, while nominal growth has gone up 96.9%. Growth has more than doubled our wage increase.

Somebody is getting all that extra dough, but it ain't hospital workers.

And the story is similar for most other public and private sector workers as well.

Growth continues apace (the Ontario Ministry of Finance predicts 4% nominal growth this year and about the same for 2012 through 2014). Hudak's proposal would ensure that somebody else gets all of that, while public sector workers get none.

It's no mystery where all that extra is going. Inequality has grown rapidly over the last few decades and our ruling elites seem determined to continue this.

All the comments from OCHU to the Drummond Commission can be found by clicking here for the full brief on the CUPE web site.