Public-sector workers at the federal, provincial, and municipal level across Canada were more likely to have a registered pension plan and higher wages than their private-sector counterparts in 2011, a new report from the Fraser Institute reveals.
It found that 88.2% of Canadian government workers were covered by a registered pension plan in 2011 compared to 26% of private-sector employees. Government employees also earned wages 12% higher, on average, than their private-sector workers.
“The reality is that government employees across Canada receive a wage premium compared to equivalent private-sector workers,” says Jason Clemens, Fraser Institute executive vice-president.
The report, Comparing Public and Private Sector Compensation in Canada, examines wage and non-wage benefits for government employees (federal, provincial, and local) and private-sector workers nationwide.
It calculates the wage premium for public-sector workers using Statistics Canada’s Labour Force Survey from April 2011, after adjusting for personal characteristics such as gender, age, marital status, education, tenure, size of establishment, type of job and industry.
When unionization is included in the analysis, the national public-sector “wage premium” (i.e., the degree to which public-sector wages exceed private-sector wages) declines to 9% from 12%.
Aside from greater pension coverage and higher wages, the study also found strong indications that Canada’s government workers enjoy more generous non-wage benefits than those in the private sector, including:
- Early retirement: Government employees retired 2.5 years earlier, on average, than private-sector workers between 2007 and 2011.
- Job security: In 2011, 0.6% of government employees lost their jobs—less than one sixth the job—loss rate in the private sector (3.8%).
To ensure public-sector compensation is fair to both taxpayers and government workers, the report argues that better data collection is needed and suggests that Statistics Canada should gather data on wages and non-wage benefits more regularly and systemically than it does now.
In addition, comparisons between the public and private sectors should focus on total compensation, not just wages or specific benefits such as pensions.
The study offers recommendations for setting appropriate levels of government compensation, using the private sector as a guide.