Here we go again: Multinational giant outbids Canadian outfit and workers take a hefty pay cut. Except that’s a deep, dark secret you’re not supposed to know. In this case, the workers are the 10 to 12 parking enforcement officers who patrol Halifax streets. For the past 40 years, they’ve been wearing the uniform of the Corps of Commissionaires, a non-profit outfit set up in 1925. It traditionally employs war veterans, retired military people, former RCMP officers and others with indirect connections to the military and police. Last month, the Corps lost the contract to enforce the parking laws in downtown Halifax to Securitas Canada, the Canadian arm of the world’s largest security company with headquarters in Stockholm, Sweden. Securitas has about 250,000 employees in more than 30 countries while the Corps is solidly Canadian with 19,000 workers nationwide.
When the news broke last week that city administrators had awarded the parking contract to Securitas, the mainstream media overlooked a crucial question: What would it mean for the officers who put in 40-hour weeks trudging downtown streets writing parking tickets? Most of them will continue doing the job wearing Securitas uniforms. Same job with less pay, although it took three solid days to find that out. It seems that what the parking officers get paid is a state secret. The city won’t say, claiming that pay rates are the private concern of whichever outfit wins the contract. Securitas refused to talk, saying I should ask the city. When I phoned the Corps of Commissionaires to inquire what the workers had been getting paid, I was told that was none of my business. Secrecy reigns in the murky world of security. I suspect that’s because no one wants you to know that the parking officers are paid shit for a job that requires special constable status and that carries certain risks such as being punched or spat on by irate parking violators.
Behind the scenes, there are various stories circulating at city hall about pay rates. The most credible one goes like this: As of last May, the Corps was paying the parking officers $9.88 per hour. Then, it raised the hourly rate to the $12.50 the officers now earn. However, when Securitas takes over September 1, the officers will be rolled back to $11 per hour. Someone at city hall is apparently telling politicians that the officers will actually be better off because Securitas provides medical and dental benefits. But the officers will have about $15 deducted from every pay cheque to help cover the cost of these benefits. That’s on top of the $1.50 per hour they’re losing under the new contract. Their $11 hourly rate translates into $440 per week or $22,880 a year before taxes and other deductions—not much pay for the revenue the city receives. Last year, parking fines generated about $3.5 million, most of it from the downtown foot patrols. The city’s contract with the Corps of Commissionaires cost only $300,000. A security industry insider says Securitas probably promised to generate even more revenue. If so, the officers would be expected to work harder for less pay.
Unfortunately, this is what happens when employers contract work out to private companies. The contract usually goes to the lowest bidder who cuts costs by paying workers less. The workers either lose their jobs or have to accept the pay cuts. It happened four years ago at the University of King’s College when unionized cleaners making $9.25 an hour lost their jobs after a non-union company paying minimum wages won the cleaning contract. Some of the cleaners had worked at King’s for more than 20 years. Members of faculty raised a stink, but the deal went through anyway. After all, business is business, even at such proud public institutions as King’s and the city of Halifax, whose motto, “wealth from the sea” boasts of its enduring prosperity.
This article appears in Aug 21-27, 2008.
Thank you for this article, but I would like to respectfully disagree with your argument and conclusion.First of all, you compare the Corps’ Canadian employees of 19,000 to Securitas international employee number of 250,000. A more accurate apples-to-apples comparison would involve the number of Canadian employees only for both outfits.
Further more, you completely deemphasized the fact that Securitas employees who will replace unsatisfied commissionaires are Canadians too. Are some Canadians more worthy of this job than others?
Then you bring forth the typical argument about the ‘evil’ multinational that offers less pay for the same or more work.
Did you consider that the current commissionaire compensation packages (salary + benefits) are offered with little consideration to whether it is fair pay or not? It is commonly agreed that government is the most inefficiently run business in Canada. The public purse is haemorrhaging with employee compensation packages and staff positions that most private businesses won’t even dream of for themselves.
Securitas is simply exercising the common theory of free market economies. Reasonably speaking, fair pay is a function of the skill set required to do the job, the availability of workers who posses that skill set, and the price that these CANADIAN workers will accept as fair compensation for providing those skills.
If the pay offered is below what free market forces will deem ‘fair’, then the relationship between the supply and demand of the skills will adjust to achieve equilibrium. That is, the demand for the skills will provide the correct price point to attract the supply of that skill.
Alternatively, if the commissionaires feel that their skills are worth more than the offering price, then by all means they should seek positions within the economic continuum where what they supply and how much they ask for it has an equivalent amount of demand and people willing to pay their price. If they can’t locate an economic opening that will pay them the wage they are asking for the skills they offer, then that is a very clear indication that what they are asking for is not fair pay for those skills.
This brings us to your sensationalized conclusion that the same workers will now have to work more and get paid less. This conclusion assumes that only one set of skill-bearers exist (the commissionaires), and that society has no other Canadians who can perform the same job and who would consider the offer pay as fair price for the skills that the job requires.
Asking for government/public intervention to force/manufacture an unjustified market price will cause negative ripple effects, including:
(1) We will effectively lock out other Canadians from prospering at the fair pay level that Securitas is offering for their skills. And,
(2) A system of over-valuation will occur, where fair pay will exist above its actual market value. As with any overvalued stock, eventually this leads to all sorts of badness (see the burst of the .com bubble). Whereas private enterprise usually suffers this effect in the form of a stock crash, the badness in government is instead shouldered by the tax payer in the form of inefficiencies in governance and overall decrease or stagnation of economic prosperity.
Think about it. If the market value of delivering a service is $10.00, but the government is paying $15.00 for that service, then the service is over-valued and the government is being over-charged by $5.00. That $5.00 can be better spent on economy-boosting initiatives, or towards lowering individual taxes. Instead, we advocate that the $5.00 be willingly squandered on an over-priced service that can otherwise be preformed more efficiently if we insist on paying the market-driven fair price, not the manufactured over-valued price.
Again, this assumes that you agree that the Commissionaires are not the only group of Canadians that can offer these skills and benefit from the offered pay level.
The city should be congratulated for opening this service to fair competition. More municipal services should move to this system of fair competition, where service is provided by the most efficient, capable, and cost-effective service provider. The public interest is maintained when Government doesn’t overspend tax dollars on trying to provide a service or product that can be provided by someone else better and cheaper. It should not be involved in collecting street garbage any more than it should be providing telephone services or subsidizing airlines. Public money should be spent on improving the economy and figuring out ways to cut taxes and boost public wealth.
Issmat you make some valid points but you neglected to mention that the Commissionaires employ many retired military members and RCMP who have served Canada well over the years. These veterans deserve respect and fair pay to supplement their well deserved pensions. Free enterprise does not mean a damn without a peaceful and secure nation to practice it in.dmdanleaf