Public sector salaries, benefits require scrutiny as wage gap grows, says think tank
Government workers in British Columbia receive 7.4 per cent higher wages on average than comparable workers in the private sector, and enjoy much more generous non-wage benefits, too, finds a new study by the Fraser Institute.
The independent, non-partisan Canadian public policy think-tank said staff compensation should be scrutinized as the B.C. government prepares to table its 2017 budget.
While officials are facing increased financial pressure from increased education spending and a cooling off in the housing sector, wages continue to account for about half of annual government program spending, according to the Fraser Institute.
"Bringing public sector compensation in line with the private sector would not only help governments in B.C. control spending without reducing services, it would also maintain fairness for taxpayers," said Charles Lammam, director of fiscal studies at the Fraser Institute and co-author of a study titled Comparing Government and Private Sector Compensation in British Columbia.
The study finds that government employees in B.C. — including federal, provincial and municipal workers — received 7.4 per cent higher wages, on average, than comparable workers in the private sector in 2015, the most recent year of data from Statistics Canada's Labour Force Survey.
And that wage gap takes into account differences between workers in the two sectors, such as their age, gender, education, tenure, and type of work.
But wages are only part of overall compensation. Government workers in B.C. enjoy much more generous benefits, too.
Nine of 10 government workers in B.C. (87.9 per cent) are covered by a defined benefit pension plan that offers a guaranteed level of benefits in retirement, compared to just one of 10 workers in the private sector (8.7 per cent).
Public-sector workers in B.C. retire 2.5 years earlier, on average, than the province's private-sector workers.
Government workers in B.C. are absent from their jobs for personal reasons 55 per cent more often than private sector workers — 12.4 days compared to eight days.
Public-sector employees in the province also enjoy much more job security, and were nearly eight times less likely to experience job loss than private-sector workers — 0.4 per cent compared to three per cent.
"Of course, governments in B.C. need to provide competitive compensation to attract qualified employees, but the fact is wages and benefits in the government sector are out of step with the private sector," Lammam said.