By Mary Scianna
Jobs have become a big talking point among business leaders and politicians. So it’s not surprising that the subject played a big role in the recent Ontario provincial election held in June.
When Ontario Progressive Conservative leader Tim Hudak promised to cut 100,000 public sector jobs and bring a million private sector jobs to the province, an uproar ensued among his political opponents. Both the Liberal’s Kathleen Wynne and the NDP’s Andrea Horwath lambasted him claiming he would destroy the province with his drastic cuts to jobs. Both party leaders said what was needed was more jobs, not less.
But both neglected to mention an important point: he said he would cut public sector jobs and create more private sector jobs by investing in the private sector through various measures, such as tax incentives.
And that’s an important distinction because private sector investments in areas such as manufacturing help to generate more jobs and fuel an economy. Public sector jobs don’t typically lead to job generation and they don’t fuel an economy. Instead, public sector jobs support an economy.
To put it more bluntly, private sector jobs contribute taxes and public sector jobs are supported by taxes. And those private sector taxes fund important things such as education, public transit and transportation infrastructures, and health care. Public sector workers also earn higher wages on average than their private sector counterparts. A 2013 Ontario Prosperity Initiative report by the Fraser Institute found that Ontario public sector workers earned 13.9 per cent more in 2011 than their private sector counterparts doing similar jobs.
I’m not suggesting public sector jobs are not important; teachers, for example, are critical for the development of youth, who in turn will become tomorrow’s generation of workers. Police officers and nurses also play an important role in our society.
The problem is that public sector jobs seem to be growing at a faster rate than private sector jobs. According to an April 2014, Fraser Institute report about Ontario’s prosperity, Ontario’s public sector employment grew, on average, at more than twice the average rate of private sector employment in 2011. And according to a Sun News article, in the last ten years, the province lost approximately 300,000 private sector jobs. In that same period, the province added approximately 300,000 public sector jobs.
It’s not just a problem in Ontario. In Quebec, private sector jobs are declining while public sector jobs are growing. The private sector in the province lost more than 26,000 jobs in the last 12 months, while the Quebec government hired 14,800 new people. According to Jerome Lussier in a March 10, 2014 L’actualité article online, Quebec is losing almost two private sector jobs for every job the government creates in the public sector.
As public sectors grow, so too do government deficits. In Ontario, with the new Liberal Party back in power, Premier Kathleen Wynn would be wise–as would all premiers–to consider paring back public sector growth because the province–and the country–needs more jobs that fuel economic growth and not hamper it. SMT