[RC8]

What does a hospital CEO do to be worth $700,000 a year?

The same thing a private hospital CEO does in other countries to earn an equivalent salary?

If you tax him accordingly (and others with such wages) a lot of that money will go back to the public purse.

A hospital CEO probably does a lot more to merit that amount of money than most other CEOs who earn equivalent or higher sums.

 

[TrickyRicky]

I can understand the frustration of people like Peepers with regard to public CEO or upper management pay; however, it is likely that this one of the few levels of employee in the public sector who are being underpaid relative to their private sector peers (another example would be public sector lawyers). It is actually the rank and file employees that are being over paid.

I'm not advocating for a race to the bottom. That is why I suggest everyone have at least one family member who works for government if you live in Canada now. But the wage issue matters because it is THE fundamental line item to deal with in our government budgets.

There is also nothing wrong with paying our government employees among the highest public employee salaries on earth (such as our teachers and police). But if we are going to do that we have to have the strongest private sector economy on earth as well. The reality is that Canada, and Ontario specifically, does not have an economy that can meet the high demands we are attempting to place on it's public purse.

 

[AlvinofDiaspar]

Actually, what I would be more interested in seeing is the wage breakdown of the entire public sector over years (say in quintiles) and by sector - and see if how the rate of increase in compensation has evolved. Let's not forget, this list probably doesn't take into account external consultants either - which is a major grey area post NPM.

AoD

 

[js97]

I can understand the frustration of people like Peepers with regard to public CEO or upper management pay; however, it is likely that this one of the few levels of employee in the public sector who are being underpaid relative to their private sector peers (another example would be public sector lawyers). It is actually the rank and file employees that are being over paid.

I'm not advocating for a race to the bottom. That is why I suggest everyone have at least one family member who works for government if you live in Canada now. But the wage issue matters because it is THE fundamental line item to deal with in our government budgets.

There is also nothing wrong with paying our government employees among the highest public employee salaries on earth (such as our teachers and police). But if we are going to do that we have to have the strongest private sector economy on earth as well. The reality is that Canada, and Ontario specifically, does not have an economy that can meet the high demands we are attempting to place on it's public purse.

Exactly.

It's about context and affordability. Don't forget they have iron clad pensions and job security. Ontario Power Generation employees are also grossly overpaid.


Looks like the government itself contributing to the polarization of the income gap.

 

[voxpopulicosmicum]

^Agreed, although I note that the apparent reasons for doing so vary, and it is not the case in all aspects of public sector. In the case of c-level executives and lawyers (to take TrickyRicky's examples), while they make some of the highest government salaries, their salaries are less than they would be in the private sector. High police salaries, on the other hand, do not appear to be a result of pressure from high private sector wages, but rather appear to have been won by political pressure.

 

[James]

I've always had an issue with the findings in the annual "sunshine list" too but, as others have also noted, it's not the excessively high salaries per se, it's the sheer number of government employees where I have to question the "value" of their position. I actually have no issues with the CEOs' salaries or the senior executives' total compensation, it's simply the inexplicable number of people in sometimes ambiguous roles who continue to be "rewarded" year-after-year increases of 10% or thereof.

I personally know a number of people on the list and their salaries continue to increase every single year at levels that surpass the private sector by a longshot. Is what they do crucial to the operation of the province? That's questionable. I still recommend to others just finishing school to look for a government job, as so many people have recommended for as long as I can remember, because let's face it, there's a lot of unneccessary fat in there. Why not get in on it?

 

[RC8]

And there's no unnecessary fat in the private sector?

I know more private sector employees who add no value to society and/or their corporation than government employees that add no value to society and/or government.

Public employees get rightly treated with some dignity. Just because private corporations refuses to acknowledge the dignity of its employees and treat them all (except the high-ranking ones) in a rather disgusting way, it doesn't mean that our government should do the same.

If the private sector behaved more like the public sector we would have much better economic and social indicators as a result, not the other way around.

 

[W. K. Lis]

Folks, we need to remember that the $100K threshold was set years ago. $100K is not a ton of money today. I'm a marketing manager for a consumer products firm and with bonus I'd be on the list if it was a crown corp, and I'm not feeling much sunshine... not clouds either I'll admit, but I'd like to move the bar to $200K for gov't income tracking.

That $100,000 threshold is ridiculous today. It fails to include inflation. It is stuck on 1996 dollar values. Using an inflation calculator, at this link, $100,000 in 1996 would be $16,004.54 in 1954 (year that Metro Toronto was born). If this Sunshine list was created in 1954, using $16,000 as the threshold, I'm sure most if not all of us would be on that Sunshine list today.

With inflation, that $100,000 threshold should be $139,273.55 today in 2013. Maybe rounded up to $140,000.00.

 

[denfromoakvillemilton]

And there's no unnecessary fat in the private sector?

I know more private sector employees who add no value to society and/or their corporation than government employees that add no value to society and/or government.

Public employees get rightly treated with some dignity. Just because private corporations refuses to acknowledge the dignity of its employees and treat them all (except the high-ranking ones) in a rather disgusting way, it doesn't mean that our government should do the same.

If the private sector behaved more like the public sector we would have much better economic and social indicators as a result, not the other way around.

Very true and people fail to realize this. Private companies are concerned with profit first.

 

[James]

Very true and people fail to realize this. Private companies are concerned with profit first.

Which is the very reason there are fewer employees that add no value to the employer in the private sector. Underperforming employees usually don't last very long, especially if it's a small to medium sized business (which make up the vast majority of businesses in Canada). Profit and margins are critical and owners are more apt to make changes as they see fit to improve their bottom line.

 

[RC8]

You are defining value and 'performance' by your ability to generate profit.

While I understand the need for government to use its resources efficiently, a government functioning under capitalistic optimization conditions would fail miserably to provide the level of service that the public requires and demands.

To refer to many public employees who wouldn't cut it in the private sector on present wages as 'fat' is disingenuous. Because governments don't work towards internal accumulation of capital, they can afford to pay their employees a lot more without sacrificing overall efficiency (by rewarding CEOs with less and entry-level employees with more).

Governments are a centralised form of capital administration, and so they must be compared to their large corporate private equivalents. Whenever these comparisons are made empirically, you usually find that public enterprise tends to be as efficient or more efficient than private enterprise in a number of fields (education, healthcare, planning, etc) and less effective in other fields (agriculture, retail, technology). In the fields where public enterprise falls short, small and medium businesses in various configurations usually perform much better than large/centralised corporations anyway.

On a final note, the small/medium businesses in Canada are much more ruthless than they need be because they don't get appropriate protection from the government. If we didn't let cannibalistic large corporations determine the prices of rent and resources for the rest of us, we would end up with an assortment of better jobs AND better products than we do now.

 

[James]

I am definitely defining "value" and "performance" by one's ability to generate profit. The government is, fundamentally, a business. That business is operated based on taxpayer's money. I want this business to operate successfully and be financially responsible for their operations. The success of their operation is contingent on the performance of their parts. Each division in this business needs to generate a "profit." In the same vein as we allocate money to research & development, we do it with the anticipation of this R&D investment translating into future revenues for all of us, thereby resulting in a "profit."

Look at the balance sheet of any business. In the vast majority, human resources will be the #1 expense. You can reduce equipment, downsize facilities, eliminate assets, etc. but that will never match the available cost savings from re-allocating human resource dollars. While I am not advocating laying off half the government staff, why not look into more efficient use of human resources? The government has spent countless dollars hiring consultants from Deloitte, KPMG, PWC, etc. to run cost savings reports but how many of these reports get implemented? Hardly any...why? Because it's too much work. It actually requires restructuring. It would actually require individuals to change job positions. Take on more responsibility. All of these are met with internal resistance. Even if it's implemented, it's up to the individuals to accept the change in direction. It is indeed a frustrating conundrum.

Now let's take a look at efficiencies of public vs. private. As mentioned, private sector is innately concerned about value and performance as it relates to profit. Privatization is not the answer to every situation but it can give the public options. Options to choose. This is capitalism. It's in their best interest to maximize efficiency. Small and medium sized businesses simply can not sustain any "fat". They may do so for other personal or business reasons but if we're talking about profit-and-loss (P&Ls), you can't keep showing deficits year after year and there's only so many tax credits you can get back to cover for it. The bottom line is simply that, the bottom line. This government "business" keeps showing losses year after year. If you had the choice, would you invest in this business?

 

[Glen]

Look at the balance sheet of any business. In the vast majority, human resources will be the #1 expense. You can reduce equipment, downsize facilities, eliminate assets, etc. but that will never match the available cost savings from re-allocating human resource dollars.

You don't tend to find expenses on a balance sheet. They are on the income statement. Even there you will find that labour in non service industries are usually not the largest expense. Maybe you should look at Intel's Income statement. Or any other semi conductor manufacturer. Also have a look at steel, mining, oil, and a whole host of other manufacturing companies. General Motors, for example, states.......... "The most significant element of our Automotive cost of sales is material cost which makes up approximately two-thirds of the total amount. The remaining portion includes labor costs, depreciation and amortization, engineering, and policy, warranty and recall campaigns." (source)

 

[TOareaFan]

I am definitely defining "value" and "performance" by one's ability to generate profit. The government is, fundamentally, a business. That business is operated based on taxpayer's money. I want this business to operate successfully and be financially responsible for their operations. The success of their operation is contingent on the performance of their parts. Each division in this business needs to generate a "profit." In the same vein as we allocate money to research & development, we do it with the anticipation of this R&D investment translating into future revenues for all of us, thereby resulting in a "profit."

I am all for government/public fiscal responsibility but there has to be a measure of that other than "profit". Government by its very nature provides services to its constituents that are not going to generate profit. How do you measure the profit of a library? A fire department? A police service? If the local rec centre costs more to run than it generates on ice rentals and swimming classes should we just close it in the name of "profit"?

The main problem with sunshine lists is that they point the finger in an out of context manner. Sure they show us the annual salary of the hospital CEO and, yes, it is a nice salary that we would all like to collect.....but there is no context there is no attempt to show us why that person earns that much....there is no illustration of who the public sector is competing with to hire that person.....just a "here, look how much of your tax dollars this guy/gal is taking home....yell at him/her!".

The secondary problem I have with sunshine lists is this arbitrary non-inflated benchmark of $100k a year. By design, there is going to be growth in the number of people every year and lead to headlines like the CBC's of "Ontario's sunshine list sees double-digit growth". Whether intentionally or not, this creates the illusion that the salaries of the people on the list saw double digit growth not, as is the case, that the number of people on the list saw double digit growth. So a bunch of people that made $99k last year got 2% increases and now they are swelling the sunshine list (remember no one falls off the list at the top end)....should that really bother us?

What we should be concerned with is the total cost of government/public service in relation to the services we receive....I don't see how the sunshine list advances our knowledge in that regard....just gives us a bunch of people to blame for that part of our income we never see.

 

[voxpopulicosmicum]

What we should be concerned with is the total cost of government/public service in relation to the services we receive....I don't see how the sunshine list advances our knowledge in that regard....just gives us a bunch of people to blame for that part of our income we never see.

I agree that the result of published "Sunshine Lists" is as you describe above, but that is a failing of the people who receive the information to understand its context and use it properly. More information is always good. It's just that "we" (i.e. the electorate) are stupid meat puppets who howl on cue when the Toronto Sun tells us to.