CLV Reports surveys 2008 second-quarter settlements

Private-sector wage increases hold relatively steady
By Gordon Sova
||Last Updated: 10/23/2008

CLV Reports has analyzed 57 wage settlements that occurred in Canada in April, May and June of 2008. Forty-seven are in the private sector; the others are in the public sector. In all the settlements, the employees were represented by a union. Eight of the agreements are from British Columbia; seven are from Quebec; four, from Nova Scotia; three, from Alberta; two, from Manitoba; one each, from Saskatchewan and Nunavut, and three cover more than one province. Twenty-eight are from Ontario. In all, they cover 102,129 employees.

The average term of the agreements is 3.34 years. This average comprises two one-year agreements, one 18-month, three two-year, 31 three-year, one 46-month, 10 four-year, one 54-month, one 57-month and seven five-year. This average is a bit longer than last quarter’s, with fewer short agreements and more long ones.

Ten private-sector settlements include cost-of-living formulas that may provide employees with additional wages, based on increases in the Consumer Price Index (CPI). Four agreements have an open cost-of-living allowance (COLA) clause without any restriction if the CPI increases. In the first year, the average of their wage increases is 26.1¢ or 1.4 per cent. With two wage freezes excluded, it becomes 52.25¢ or 2.85 per cent. In the second year, it is 26.9¢ or 1.4 per cent. Without the two freezes, the average becomes 53.75¢ or 2.85 per cent. In the third year, the average is 28.25¢ or 1.45 per cent. Excluding the freezes makes it 56.5¢ or 2.9 per cent.

The other six private-sector settlements with a COLA clause have limited COLAs, which produce increases that are subject to triggers, caps or time limits. These agreements have an average wage increase of 40.3¢ or 1.65 per cent in the first year. With two wage freezes excluded, the average is 60.5¢ or 2.5 per cent. The second-year average is 40.0¢ or 1.6 per cent, or 60.0¢ or 2.35 per cent with two freezes excluded. The third-year average of four agreements is 56.5¢ or 2.1 per cent with a freeze or 75.3¢ or 2.8 per cent without it. One agreement has a fourth year at 40.0¢ or 2.1 per cent and a fifth at 40.0¢ or 2.0 per cent.

The remaining 37 private-sector settlements, with no COLA formula, provide first-year wage increases averaging 48.6¢ or 2.55 per cent. With four wage freezes excluded, this average becomes 54.5¢ or 2.9 per cent. The second-year average of 35 agreements is 52.1¢ or 2.6 per cent. With two freezes excluded, it becomes 55.2¢ or 2.8 per cent. The third-year average is 57.0¢ or 2.8 per cent. The average of 13 fourth-year increases is 49.9¢ or 2.4 per cent (54.0¢ or 2.55 per cent with one freeze excluded), and for seven fifth-year increases, 54.6¢ or 2.5 per cent.

The second-quarter non-COLA increases (with wage freezes included) at 2.55 per cent, 2.6 per cent and 2.8 per cent are just short of the 2.6 per cent, 2.9 per cent and 2.9 per cent seen in the first quarter of 2008. The corresponding averages in the fourth and third quarters of 2007 were 2.7 per cent, 2.6 per cent and 2.6 per cent, and 3.1 per cent, 2.75 per cent and 2.85 per cent, respectively, for the first, second and third years.

The 10 public-sector agreements have average wage increases of 3.05 per cent in the first year, 3.5 per cent in the second year and 3.7 per cent over eight agreements in the third. Six agreements have a fourth year with a 4.7 per cent average and one a fifth at 4.0 per cent.

The Ontario Ministry of Labour’s statistics for the second quarter are not yet available. Alberta reports 6.6 per cent in the private sector (up from 3.8 per cent in the first quarter) and 5.7 per cent in the public sector (down from 6.1 per cent). Human Resources and Social Development Canada (HRSDC) reports 1.7 per cent in the private sector (down from 3.9 per cent in the first quarter) and 3.3 per cent in the public sector (up from 3.2 per cent). These averages include estimated COLA; CLV’s do not.

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