FRASER INSTITUTE -- Government workers across Canada receive 9.4% higher wages, on average, than comparable private-sector workers
The wage premium and more generous benefits that government workers in
Canada enjoy over their private-sector counterparts is one area governments
could look to reduce costs following the recession, finds a new study by the
Fraser Institute, an independent, non-partisan Canadian public policy
think-tank.
“At a time when governments across Canada are facing serious fiscal
pressures as a result of the recession, bringing government sector compensation
in line with the private sector would help reduce costs without necessarily
affecting services,” said Ben Eisen, a senior fellow with the Fraser
Institute.
The study, Comparing Government and Private
Sector Compensation in Canada, finds that government employees
across Canada—including federal, provincial and municipal workers—were paid
33.5 per cent higher wages, on average, than workers in the private sector in
2018, the most recent year of available comparable data from Statistics
Canada’s Labour Force Survey.
Even after adjusting for differences such as age, gender, education,
tenure, type of work, industry, and occupation, government employees are still
paid 9.4 per cent higher wages.
But wages are only part of overall compensation. Government workers
across Canada enjoy much more generous non-wage benefits, too.
- Pensions: In
2018, 87.7 per cent of public-sector workers were covered by a registered
pension plan compared to only 22.5 per cent in the private sector. Of
those covered, almost all government workers (90.8 per cent) enjoyed
defined-benefit pensions, which offer a guaranteed level of income and benefits
in retirement, compared to 40.7 per cent among private sector workers.
- Early
retirement: Public-sector workers retired 2.4 years
earlier, on average, than the country’s private-sector workers.
- Personal
leave: Government workers were absent from their jobs for personal
reasons 70 per cent more often than private sector workers—14.6 days
compared to 8.6 days.
- Job security: In 2018, public-sector employees were approximately six times less likely to experience job loss than private-sector workers—0.4 per cent compared to 2.4 per cent
“All levels of government in Canada—municipal, provincial and
federal—must find ways to reduce costs following the unprecedented spending and
borrowing we’ve seen recently,” Eisen said.
“Closing the compensation gap between the government and private
sectors would reduce costs and help governments move towards balancing their
budgets.”
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