Government workers in Ontario are paid an average of 11.5% more than their private sector counterparts, shows a study by the Fraser Institute.
“As the Ontario government grapples with a $12.5-billion deficit, it has identified government sector compensation as a way to restrain spending,” said Niels Veldhuis, president of the Fraser Institute. “Indeed, in light of ongoing collective bargaining negotiations, now is an opportune time to scrutinize the compensation of government employees, which consumes over half of program spending.”
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Using Statistics Canada’s Labour Force Survey data from January to December 2013, the study looks at federal, provincial and local government workers. When unionization is accounted for, the government sector wage premium in Ontario declines to 8.5%.
Wages are part of an employee’s total compensation. Non-wage benefits—including pensions, early retirement and job security—can represent an important portion of an overall compensation package. While individual data on these benefits are not readily available in Canada, there are strong indicators that the government sector as a whole also enjoys superior non-wage benefits.
Read: Public sector compensation hurts Canadians: CFIB
Specific non-wage benefits examined in the study include the following:
- Pensions: In 2013, 77.3% of government workers in Ontario were covered by a registered pension plan, compared with only 25.6% in the private sector. Of those covered, 97.1% had DB pensions compared with 46.9% of private sector workers.
- Early retirement: Between 2009 and 2013, government workers retired 1.4 years earlier, on average, than private sector workers.
- Job security: In 2013, 3.8% of those employed in the private sector lost their jobs, compared with only 0.8% of government employees.
- Absence rates: Full-time employees in the province’s private sector were absent due to personal reasons for an average of 7.2 days in 2013; government workers were absent an average of 10.4 days.
Read: Higher wages, pensions more likely for public sector: Fraser Institute
This story originally appeared on our sister site, Advisor.ca.