A new study by the Fraser Institute shows that on average, government employees make nearly 10% more than their private sector counterparts and enjoy a slate of other advantages.
The report titled Comparing Government and Private Sector Compensation in Canada, 2023 Edition comes as the largest union representing public sector workers prepares to go on strike.
“After controlling for factors like sex, age, marital status, education, tenure, size of firm, job permanence, immigrant status, industry, occupation, province, and city, the authors found that Canada’s government-sector workers (from federal, provincial, and local governments) enjoyed an 8.5% wage premium, on average, over their private-sector counterparts in 2021,” wrote the report’s authors.
“When the wage difference between unionized and non-unionized workers is taken into account, the wage premium for the government sector declines to 5.5%.”
Other advantages enjoyed by public sector employees was higher contributions to their pension plan, more job security and taking more personal time off.
“Available data on non-wage benefits suggest that the government sector enjoys an advantage over the private sector. For example, 86.6% of government workers are covered by a registered pension plan compared to 22.9% of private-sector workers,” the report explained.
“Of those covered by a registered pension plan, 90.6% of government workers enjoyed a defined-benefit pension compared 39.9% of private-sector workers.”
Fraser Institute Senior Fellow Ben Eisen says governments need to immediately bring public sector wages in line with private sector ones at a time of uncertain economic conditions.
“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 in a press release.
“Closing the compensation gap between the government and private sectors would reduce costs and help governments move towards balancing their budgets.”
The Public Service Alliance of Canada has threatened a strike beginning on Tuesday night should its list of hefty demands not be met in time.