Private sector workers make up to $8,150 less per year and work up to six hours more each week than someone doing the same job for the government, says a Canadian Federation of Independent Business (CFIB) report.
When salaries, benefits and working hours are factored in, the average federal, provincial or municipal employee makes 18% to 37% more than someone doing the same job in a private business.
Read: How much more are government workers paid?
The report compares private sector employees to those at various government employers, and offers clear solutions to close the earnings gap between these workers, such as capping taxpayer-funded contributions to government pensions.
If government workers were paid at the same rate as their private sector equivalents, the report says taxpayers would save $20 billion each year.
Read: Public sector compensation hurts Canadians: CFIB
“The public-private wage gap is the elephant in every room when it comes to setting the public policy agenda in this country,” says Ted Mallett, chief economist and vice-president at CFIB. “Public sector earnings have been allowed to drift well above market-tested norms, and cash-strapped governments are looking for ways to invest in infrastructure and other priorities. Closing the gap is not just what’s fair, it’s what is needed.”
Based chiefly on National Household Survey (NHS) returns from 2011, the findings represent average full-time employment earnings for more than 7.2 million Canadians. Occupations that don’t exist in both sectors are excluded.
“Canadians in the private sector see their tax dollars paying for government wages and benefits that they can only dream of,” adds Mallett. “Policymakers need to start reining in these misaligned costs.”