Public Sector Workers Get Higher Wage, More Benefits Than Private Counterparts

By Reina Ilagan

Dec 09, 2016 10:38 AM EST

Fraser Institute's study revealed that Canada's public sector workers are paid 10.6% more than their counterparts in the private sector.

From the data gathered from January to December 2015, the report included estimates on the wage differential between the government and private sectors.

"After controlling for such factors as gender, age, marital status, education, tenure, size of firm, type of job, industry, and occupation, Canada's government sector workers were found to enjoy a 10.6% wage premium, on average, over their private sector counterparts," the report said.

The report indicated that in 2015, the total employment in the country was composed of 3.6 Canadians working in the public sector which includes the federal, provincial and local governments, government agencies, crown corporations, and government-funded establishments. The sector constituted 20.1% of the total labor force.

Workers in the private sector represented 64.6% of the total employment, while the remaining 15.4% were self-employed.

However, the wage gap narrows after factoring in private sector unionization. The wage premium for public sector workers declines to 7.2% more than their unionized private sector counterparts.

The author of the report, Charles Lamman, said that the gap is unfair to taxpayers as it puts a financial strain on government during volatile economic times.

"Governments cannot afford to continue to provide these overly generous compensation packages, particularly as they struggle through serious fiscal challenges, and it's really important to maintain fairness to the taxpayers who are ultimately funding this."

Aside from getting paid more, workers in the public sector were also found to enjoy more benefits like retirement program.

"While a little over two of every 10 private sector workers have a registered pension plan, nearly nine of every 10 public sector workers do," the report stated.

"We found that eight out of 10 government workers have pensions that guarantee an income in retirement, versus one out of 10 in the private sector. Government workers retire about 2.3 years earlier, are off for personal reasons more days in a year than their private sector counterparts - about five days more," the report said in addition.

Public sector workers are also found to be eight times less likely to experience job loss. Compared to the 3.8% private sector workers who experienced job loss, the public sector recorded only 0.5% in 2015.

Irene Lanzinger, president of the BC Federation of Labor, noted on the significance of eliminating the gap between the public and private sector workers, with the latter recommended to be earning more.

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