Automatic raises are not sustainable

Raises must coincide with overall productivity increases

Re: Wages not keeping up with cost of living hike (Letters, Sept. 21)

Maybe the News should get a professor of economics to do an op-ed.

It is not sustainable for the country, province or city to provide a universal entitlement to automatic cost-of-living increases. If these increases are not preceded by matching productivity increases, they are inflationary in themselves – indeed in some circumstances the rate is compounded. This is one reason why public service pensions, for instance, have caused municipal bankruptcies.

Note, too, that Victoria city councillors have opted for a budget system with a built-in 3.25 per cent increase, regardless of actual inflation. The current rate in Greater Victoria is substantially below two per cent and hasn’t been much more on a longer-term average.

Simon Twist

Victoria

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