Civil servant wages increased at nearly double average rate

Gains of 59 per cent compared to 30 per cent in private sector: Study
|hrreporter.com|Last Updated: 02/25/2011

Wage growth for federal and provincial public administration workers has been faster than the growth experienced by any other industry tracked by Statistics Canada between 1998 and 2009, according to a report. Federal workers saw their average wage increase by 59 per cent per cent, almost twice the rate of wage growth in the economy as a whole, which grew at about 30 per cent, while those in public and territorial administration saw gains of 55 per cent, found the study by the Frontier Centre for Public Policy.

No other major industry tracked by Statistics Canada experienced wage growth that came close to matching the public administration category during this period. The next highest rates of growth were in the real estate and mining and oil extraction industries, where wage growth was 46 per cent, found Public Administration Wage Growth in Canada.

In 1998, the average annual wage for federal public administration workers was about $10,000 higher than the average worker in the economy. By 2009, that gap had grown to $25,000.

“The interesting thing is not just that public administration wages are rising faster than the average worker in the economy, it is that no other major industry tracked by Statistics Canada comes close to matching public administration in terms of wage growth,” says the study’s author Ben Eisen, an analyst at Frontier Centre for Public Policy in Winnipeg.

“Growth in the wage gap between public servants and the average worker in the economy over time is not necessarily objectionable. There are a number of benign potential explanations. The size of the gap, however, between wage growth for this one category of workers and all other categories tracked by Statistics Canada is striking. Future research should carefully examine the causes to determine if we are overpaying for government labour. ”

While it’s possible economic and technological changes have increased the value of highly educated workers — which bureaucrats tend to be — causing government wages to grow quickly, their wages are still growing substantially faster than wages in any other industry — including those that require significant education and skills, said the report.

“Federal and provincial governments should carefully examine the causes of the uniquely rapid wage growth for public administration workers to determine the extent to which rent seeking and union influence over policy are responsible for the anomalously rapid growth in wages for these workers,” said Eisen in the study.

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