Saturday, July 26, 2014

Or Why Lorne Gunter Needs No Spare Tire

Lorne Gunter recently wrote a column on the Harper government's plan to cut sick leave for federal staffers. In his typically venomous style, Gunter concludes the federal public service is too large following a report from the Parliamentary Budget Officer(pdf) showing there is little added cost to sick leave beyond a person's salary. Gunter reckons if there is not a replacement called in to backfill positions they must not be essential to the work of government and positions should be cut. This train of thought has not travelled far from the station but beyond being poorly thought out — it's destructive.

In his 2006 paper, Innovation in the public sector: spare tyres and fourth plinthsWayne Parsons explains redundancy in government is in place to ensure the government never fails. Unlike the private sector, which allows and even encourages failure, governments don't have the option to go bankrupt, layoff all the employees, and be replaced by a better, smarter government. Imagine the chaos if all the work of government was halted and restarted as often as new start ups go bankrupt. A robust civil service is akin to driving with a spare tire. It costs a little more to have a spare but when it's needed the savings are vast.

Much of the work of government requires at least a degree of expertise and can not, and should not, be covered off by anyone not familiar with the work when a person is sick for a day or three. Were we to follow Gunter's advice and slash the number of civil servants, the work of government would be impacted. Workloads would increase and every sick day would cause delays in projects, extreme increases in cost to temporarily hire a subject matter expert, or, more likely, both. With a robust civil service, colleagues are familiar with one another's work and can carry on while a peer is absent for a short period. This allows work to stay on track and projects to be completed in a timely manner.

An even more insidious effect of a lean public service is the inability to innovate. Innovation can only occur where there is room for failure. The private sector excels at innovation precisely because it allows for failure. Civil servants are free to innovate and experiment when there are fail-safes in place to ensure work is completed even if the innovation is not successful. When these measures are removed, the public service cannot experiment and will not be able to provide increasingly sophisticated products. As technology rapidly changes delivery methods and expectations, it is more important now than ever that we encourage innovation in the public sector by ensuring a robust civil service.

Saturday, April 5, 2014

March Labour Force Report

Statistics Canada has released the labour force report for March. The report is positive about job growth and we see the unemployment rate has decreased a tenth of a percent to 6.9%. The increase in employment is mainly among young Canadians aged 15-24 which is nice to see as there has been little positive to hear about youth employment throughout the recession. Overall, the report has a cautiously optimistic tone despite having very little good to report.

The good is that unemployment fell by 0.1% and there was a complementary increase in the employment rate from 61.6% to 61.7%. The job growth went primarily to the youth increasing the employment rate almost a full percent to 55.4%.  Over 40% of the new jobs were full time. Unemployment among young Canadians remained unchanged at 13% indicating the number of youth looking for jobs increased, a hopeful sign.

The rest of the report made a valiant effort to make it appear otherwise but there is only bad news contained in the remainder of the report. Though the employment rate increased, the full time employment rate decreased. The majority of new jobs were part time, which while better than not working, is hardly something to celebrate. The unemployment rate among Canadians aged 25-54, the backbone of the labour force, fell 0.2% as approximately 25000 Canadians gave up looking for jobs. Among older Canadians, over the age of 55, the employment rate fell by 0.2%, approximately 19000 fewer people working, and the same number gave up looking for work.

The slight decrease in unemployment results both from the increased number of young Canadians that got jobs but also from the large number of Canadians over the age of 25 that became discouraged and left the labour force altogether. More work obviously needs to be done to ensure job growth. Governments should focus investment rather than cutting taxes and expecting the private sector to do the heavy lifting.