Public sector workers have higher wages and benefits than their private sector counterparts, according to two reports.
A Fraser Institute study—which uses Statistics Canada’s Labour Force Survey data from January to December 2013—finds that government employees in Canada (federal, provincial and local governments) receive 9.7% higher wages, on average, than comparable employees in the private sector.
Read: How much more are government workers paid?
When unionization is accounted for, the government-sector wage premium drops to 6.2%.
But wages are only part of an employee’s total compensation, which also includes non-wage benefits such as pensions, early retirement and job security. And according to several strong indicators, the government sector as a whole enjoys superior non-wage benefits.
Read: Public sector workers earn more, work less: Report
Specific non-wage benefits examined in the study include:
- Pensions: In 2013, 87.8% of government employees in Canada were covered by a registered pension plan compared to only 23.9% in the private sector. Of those covered, 94.2% of government employees enjoyed defined-benefit pensions (which guarantee a certain level of benefits in retirement) compared to 47.5% of private-sector employees;
- Early retirement: Between 2009 and 2013, government employees retired 2.4 years earlier, on average, than Canada’s private-sector employees;
- Job security: In 2013, 3.6% of private-sector employees experienced job loss in Canada, compared to only 0.7% of government employees;
- Absence rates: Full-time employees in Canada’s private sector were absent due to personal reasons for an average 8.1 days in 2013 while the average government employee was absent 12.1 days.
“Of course, governments must provide competitive compensation to attract qualified employees, but wages and benefits in Canada’s government sector are out of step with the private sector,” says Charles Lammam, study co-author and director of fiscal studies at the Fraser Institute.
Read: Spending on total compensation for Ontario public workers rises
Separately, a Canadian Federation of Independent Business (CFIB) report finds municipal government workers across Canada are making $6.43 more per hour on average in wages and benefits than their private sector counterparts—a gap of 22%.
The municipal compensation gap varies across the country. Municipalities in Quebec (23%), Ontario (21%) and New Brunswick (19%) have the biggest imbalances. Individually, Toronto (26%) and Montreal (25%) are the worst offenders.
Based chiefly on National Household Survey (NHS) returns from 2011, the findings reflect the representative census records of 132,790 municipal employees and 3.6 million private sector employees across Canada. Occupations that don’t exist in both the municipal and private sectors are excluded.
“Cities, big and small, are spending well beyond their means,” says CFIB research analyst Nina Gormanns. “When we look at inflation-adjusted operating spending by our municipalities, data show that it has increased at four times the rate of population growth over the past 13 years. The lion’s share of that spending is dedicated to wages and benefits for city employees.”