New report points to gender, seniority, education and unionization
During the recent Toronto civic employees’ strike, the Canadian Federation of Independent Business (CFIB) pointed to an alleged 36 per cent wage and benefit premium for city employees when compared to the same job in the private sector.
The CFIB’s Wage Watch reports are a perennial target of union criticism, and a new critique from the National Union of Public and General Employees (NUPGE) has just appeared.
The CFIB uses occupational comparison methodology: “This study measures wage disparities by comparing narrowly-defined occupations in the private sector and public administration. The guiding principle in selecting which occupations to compare is that they must readily be found in both the private and public sectors.” Data from the 2006 Census is used.
Further, the CFIB rejects three other methods of comparing wages: wage settlements, which include only unionized employees; indirect indicators such as tenure, which are termed “crude and … only valid in the strictest context of economic theory”; and econometric estimation of the various characteristics that make up a wage difference, which “can be ignored in the analysis” because “the underlying assumption is that job requirements are the same in both sectors.”
NUPGE’s critique of the CFIB’s study was prepared by David Macdonald of the Canadian Centre for Policy Alternatives.
He points out that the study does not control for as many factors as comparable academic research. “The CFIB study only adjusts for three main variables: occupation, geography and age. Even the first 1979 study of wage premiums adjusts for over 10 variables.” Among the other factors he points out are education, gender, unionization and experience.
Seven academic studies on the public sector wage premium published between 1979 and 2003 have found results ranging from –1.7 per cent to 14.1 per cent for men and 6.3 per cent to 22.3 per cent for women. The trend, Macdonald finds, peaked in 1991 and is dropping.
Most worrying for Macdonald is the failure of the CFIB to distinguish between men’s and women’s wages. All the studies have pointed to a higher differential for women and Macdonald suggests more equitable pay in the civil service is the reason.
And, finally, the bulk (over two-thirds) of the 36.4% wage premium that the CFIB alleges between municipal and private sector jobs in Toronto is made up of benefits and not wages. There is no methodology provided in the CFIB study as to how this is arrived at, with the exception of average hours worked per week.
