Topping-up government wages & benefits costs taxpayers $20 billion per year
AB government should start work to achieve cost savings in this week’s budget
CALGARY – If you work in the private sector, you’re making up to $8,500 less per year, and working up to six hours more each week, than someone doing the same job for the government. This is one of several key findings from the latest Wage Watch report released today by the Canadian Federation of Independent Business (CFIB), pointing to a huge wage and benefits advantage for public sector workers over their counterparts in the private sector.
When salaries, benefits and working hours are factored in, the average federal, provincial or municipal employee makes 18-37 per cent more than someone doing the same job in a private business. Canada Post workers and federal government employees are the biggest beneficiaries.
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.
Public sector salary and benefits
% advantages over private sector, Canada
*dark blue: salaries only (adjusted for occupation, age and education)
*light blue: salaries and benefits (pensions, working hours)
If government workers were paid at the same rate as their private sector equivalents, taxpayers would save $20 billion each year.
“The public-private wage gap is the elephant in every room when it comes to setting the public policy agenda in this country,” said 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.
In Alberta, the trend observed nationally persists: there is a substantial gap in salary and benefits in favour of public sector employees, even after adjustments for differences in occupational mix, age, and education.
Public sector salary and benefits
% advantages over private sector in Alberta
|Federal Government||Provincial Government||Municipal Government||Education||Healthcare|
|Salaries & benefits
Includes: pensions and working hours
“Alberta is known for its highly paid positions relative to other parts of the country. Public sector compensation goes well beyond the already strong wage, salaries, and benefits offered in the private sector and is an issue of fairness for taxpayers and small businesses”, said Amber Ruddy, Senior Policy Analyst for CFIB.
“While the Prentice government will almost certainly hike taxes in this week’s provincial budget to fill its coffers, taxpayers could save billions if the government would simply begin to act on this disparity. It’s time for the Alberta government to bring total public sector compensation in line with private sector norms”, concluded Ruddy.
The full report is available at www.cfib.ca.
CFIB is Canada’s largest association of small- and medium-sized businesses with 109,000 members across every sector and region.