Why Quebec's public sector negotiations matter to all wage earners in the province

After months of negotiations and low-key pressure tactics, Quebec's public sector unions have begun to intensify their efforts to wrangle wage increases from Premier François Legault.

On Wednesday and Thursday, support staff at dozens of public schools around the province will walk off the job for a brief strike, forcing the schools to close.

Education specialists took similar action last week, as did CEGEP teachers earlier this month. Next month, some health-care workers — including social workers, nutritionists and psychologists — also plan to hold short strikes.

Faced with the prospect of increasingly disruptive labour action, Legault has made it clear he wants to reach a deal with the public sector workers soon.

But he also made it clear that, other than for a few select categories of workers, he isn't willing to offer pay increases beyond inflation: five per cent over three years.

With large deficits caused by the pandemic, the government can't afford a more generous offer, Legault said.

Yet many of those public sector workers asking for raises above inflation — between six and eight per cent, depending on the union — are the same frontline workers whom Legault referred to as the province's "guardian angels" in the bleak days of spring 2020.

"The pandemic has made public opinion favourable to nurses and other health-care workers," said Jean-Claude Bernatchez, a professor of labour relations at the Université du Québec à Trois-Rivières.

It has made Quebecers aware of the value of other public sector workers as well, from teachers in crowded classrooms to the janitorial staff in elderly care homes, Bernatchez added.

This re-evaluation comes at a critical moment for wage earners of all stripes, public sector and private, in Quebec.

Between roughly 1978 and 2015, real wages effectively stalled. The buying power of salaried workers in the province flatlined for nearly 40 years.

But real wages started to edge up slightly before the pandemic, thanks mainly to low inflation.

Whether that trend continues or wages return to being stagnant, depends in large part on how these current public-sector negotiations are resolved.

A history of wages

Last year, Jacques Rouillard, a retired labour historian, and his son Jean-François Rouillard, an economist at the Université de Sherbrooke, co-authored one of the most comprehensive studies to date on wages in Quebec.

It's a story that will be familiar to readers of the best-selling French economist Thomas Piketty, whose work tracks the history of income inequality around the world.

In the years following the Second World War, Quebec, like much of the West, went through a period of sustained economic growth.

Thanks in part to growing unionization rates and government intervention in the market during the Quiet Revolution, workers saw their salaries increase in proportion to increases in economic productivity.

But beginning in the late 1970s, productivity and wages followed different paths; while the former continued to climb, the latter remained idle.

Between 1983 and 2017, the productivity of the Quebec economy increased by 34.5 per cent. Hourly wages, though, increased only 9.5 per cent during that period, while the salaries of unionized workers increased even less.

"That means that salaried workers, who contributed with their work to the productivity gains … did not benefit as they should have," the Rouillards write in the article, which was published in the journal L'Actualité économique.

They offer a number of explanations for this reversal.

A series of recessions in the 1980s and 1990s left Quebec with chronically high unemployment. This was compounded by free trade agreements, such as NAFTA, which increased labour market competition.

At the same time, unionization rates declined as job growth was concentrated in the service sectors, where labour tends to be less organized.

But the Rouillards also stress the lasting influence of a policy, first drafted by Robert Bourassa's government in 1972, to align public sector pay increases with those in the private sector.

Successive Quebec governments, even the ostensibly pro-labour Parti Québécois, have pursued this objective with earnestness, often bypassing the collective bargaining process to legislate work conditions.

In 1982, public and para-public sector salaries were nearly 12 per cent higher than private sector salaries, when benefits were factored in. By 2020, unionized public sector workers were making nine per cent less than other salaried workers in the province.

The effect of this decrease was likely felt beyond the stretched budgets of teachers and nurses, according to the Rouillards.

Quebec has an unusually large number of unionized public sector workers by Canadian standards, more than 550,000 at last count, in addition to more than 200,000 para-public workers.

Between 15 and 20 per cent of salaried workers in Quebec collect their paycheques from the provincial government.

By forcing public sector wages downward, the government may have brought other wages in the province down with them.

"We conclude that government policies regarding public sector remuneration played a significant role in the quasi-stagnation of real wages and purchasing power of all salaried workers in the last 40 years," the Rouillards write.

Time for a deal?

For the moment, it doesn't appear as though Quebec is headed toward an unlimited general strike of its public sector workers. Both sides have incentives to strike a deal.

Though public opinion may be favourable to some health-care workers because of the pandemic, Legault too is popular and is up for re-election next year.

"Legault doesn't want to go into an election with 500,000 public sector workers on his back," said Bernatchez.

But the history of wages in Quebec illustrates that what is at stake in these negotiations is not simply a political calculus.

At a moment when inflation is increasing and affordable housing is scarce, what Legault agrees to pay government employees will influence what all Quebecers will be able to afford in the coming years.