I recently received an email that made an important point about the changes to our pension plan in the proposed contract:
Hello again, Robert
Read your last article “…a hollow victory for unions“.
I think it would have been useful if you had added that the increase in deductions to the teachers pension plan would “consume”, according to my calculations, 72% of any increase proposed by the government (at least for anyone earning more than $54,900). That means, for the 1% increase in salary offered in the agreement, the real increase is only 0.28%. For the 2% increase offered, the real increase would be 0.58%.
With the other increases (CPP, EI, drug plan), the real increases would go further down to real zero or actual reductions in salary. It is understandable that higher absolute values of pensions payments require higher contributions, but most regular folks should be aware of the real numbers before they go to vote for the new agreement.
And you were talking about increases to cover inflation!