When is a “pay freeze” actually a payroll cut?

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When it comes to an employee’s progress through a salary grid, the answer is “always.”
 
This is a hard truth that the Government of Ontario has now forced on elementary and secondary teachers.
 
The estimated 40% of Ontario teachers who have not yet reached the maximum level of their salary grid, and who forego their grid-steps for the next two years, will indeed have their wages frozen for those two years. Consequently they will be earning less than they would have been, during those two years, and every year thereafter until they eventually reach the grid maximum.
 
Even though these teachers referred to will not actually experience reductions in their current salaries, the total salary mass paid to all teachers will in fact be reduced.  The total salary mass will actually decline from previous years (assuming the same complement of teachers) because the government will not be paying out the grid increments to each of the eligible teachers, as it has done in previous years.
 
Some junior teachers will be allowed to move up the grid, but this movement will be funded by three unpaid leave days for every teacher.  Again, this will deplete the total salary mass.
 
Further, assuming eleven grid steps, a permanent withholding of the grid steps (or funding them from unpaid leave days, as has been suggested) would continually erode the salary mass, in diminishing fashion, each year, for eleven years, at which point it would reach a steady state again.
 
If the grid-steps are reinstated after two years, then the money that had been removed from the salary mass would begin to be returned to the salary mass. Everything else being equal, this would follow a similar eleven year cycle, until the salary mass returns to the level at which it was prior to the temporary removal of the grid steps.
 
Hence the so-called two year pay freeze is not a pay freeze at all. Rather it is an actual reduction in total teacher payroll over two years, followed by an eleven year catch-up schedule. And it is funded by a loss in life-time earnings of the current 40% of all teachers who are affected by it.
 
The irony of the government “ freeze” is that grid-steps programs are actually budget neutral– the total salary mass is unaffected by movement through the grid. This is an important fact for faculty associations, and we’ll examine this more in next week’s OCUFA report.
 
Thanks to Ian Sakinofsky for contributing this analysis.

This article originally appeared in the OCUFA Report. To receive stories like this every week in your inbox, please subscribe.

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