Are public sector workers overpaid?
By Gordon Powers, Sympatico / MSN Finance
As the economy continues to crumble, the debate surrounding provincial and municipal governments’ ability to set wages at an appropriate level is really heating up. And one of the really hot issues is the growing compensation gap between public- and private-sector jobs.
According to the Canadian Federation of Independent Business, public-sector workers across Canada earn 8 per cent to 17 per cent more than people with similar jobs in the private sector. When shorter work weeks and other benefits are taken into account, the number rises to more than 30 per cent.
The public-sector wage advantage is now 11.9 per cent for municipal workers, 7.9 per cent for provincial workers and 17.3 per cent for federal workers. On average, the annual pay of provincial employees is $52,863 while that of equivalent private sector workers is $49,002, according to CFIB data.
The findings of this latest study not only confirm previous research, but suggest that governments as a group are losing control of their employment costs — particularly benefits — thus forcing taxes up unnecessarily, the CFIB argues.
Critics of the study, while acknowledging that a wage gap does exist, suggest the disparity is based on the strengths of unionization, not on red-herring distinctions between public versus private.
In fact, the real issue – what constitutes a fair wage for Canadians – gets lost in the shuffle, says Winnipeg Free Press columnist Dan Lett: “To buy into the CFIB argument that public-sector wages are overly generous, you'd have to accept that the lower private-sector wages it espouses provide workers with a real living. And that's just not true.”
Most Canadians are falling further and further behind in their desperate bid to keep up to the cost of living. If there's an argument for tax relief, it’s at the bottom-most rungs of the income tax system, he says, maintaining that the problem lies not with public sector costs but with the cut-price wages paid by the CFIB’s constituents.
What do you think: Are public sector workers overpaid?
Posted by: Eric Robinson | Jul 17, 2021 10:53:51 AM
They go for a raise and the tax payers pay-great severence.lots of holidays good job security what more does anyone want? Some gov. departments should be privitized anyway especially the CBC alias PCC ( parisitic broadcasting corp.)
Posted by: Richard | Jul 17, 2021 10:55:04 AM
I'm currently in the public service and I partially agree with all the comments so far. Yes, some are overpaid, but as mentioned by others, you have to compare apples to apples. According to the average salaries for my position, I am about $10-15,000 underpaid compared to the private sector. As for the benefits and all the "perks", again you have to compare apples to apples. I am unclassified which means I basically get my yearly salary and thats it. No benefits, no vacations. Thankfully I am able to pay into the pension and am entitled to 1.25 sick days per month (provided I do not miss a day of work for the month).
Posted by: Michael | Jul 17, 2021 10:59:10 AM
"It's not that public sector worker's are overpaid, it's that private sector workers are underpaid."
- When you work for a private business owner, he pays you with his own money, not with taxpayers' money. He won't pay you more than other private business pay for a similar type of work.
"If you work in the private sector you knew what you were getting into. If the grass is greener on the other side, climb the fence and play in that yard."
- You can't just "climb the fence" - most jobs openings are in the private sector, not to mention rampant nepotism in the public sector.
Posted by: The grass is always greener | Jul 17, 2021 11:08:05 AM
So True Richard. I too used to work in the public sector. I made my wage and that was it. Now as I mentioned above, my man works in the public sector. Another thing to compare is which goverment/municipality you are working for. I have noticed that cities are less accountable than Counties or municiple districts, but I know nothing about provincial or federal governments so I won't comment on them. My man gets the equivalent of three weeks holidays a year, which matches mine in the private sector. He works for a county (Municiple) Government and last year the taxes actually decreased in our County. I don't think that it is Private sector vs. Public Sector, but rather more along the lines of the morality of the people in the management positions.
I do however agree that the wages in some areas of both the private sector and the public sector are loo low and don't even get me started on minimum wage. These are really tough times we live in and I don't think anyone except the upper echelon of workers is getting pay increases that are adequate with the current rising costs of living.
Posted by: babu | Jul 17, 2021 11:08:36 AM
I have worked with a young guy who only ever wanted was to work for the city. His reasoning was: hey, I want to retire early, I want a lot of money and I don't want to break a sweat getting it. He's now working for the city and doing all that. Did I mention that he doesn't know a whole lot and is only fairly educated on top of having no ambition? Guess on whos back is he able to do all this? Any guesses?
And don't tell me I could have done the same thing......I have way too much self-respect for that!
Posted by: peter | Jul 17, 2021 11:08:44 AM
I will let you be the judge. I park my car in a lot where most of the cars are driven by public employees. On a typical day, the lot is empty until about 10:00AM, except for 3-4 cars driven by private workers. The parking lot fills up completely by 11:00 AM. By 3:30 PM the lot is pretty much empty (except, of course, the cars driven by the same people who were in early).Notice I use teh term public employees becuase the term "public workers" is an oxymoron. And yes, those employeed by the public sector are grossly overpaid.
Posted by: Officer | Jul 17, 2021 11:13:20 AM
To Privat Workur:
I think I should clear some things up for you. I am a police officer and therefore a public sector employee. Here's what you need to know:
I work more that 37.5 hours a week. Actually I work nights all weekend and I just got home form court this morning when I was supposed to be off. I have no say in this matter. I also have to work overtime all the time because for some reason when I get a call at the end of shift, I can't merely tell the people I am assisting that I am done for the day and going home.
I do not get my birthday off.
I do not get to accumulate sick time. I actually get only four fully paid sick days off a year. If I don't use them they are gone. Just so you know, I didn't use one sick day last year. I have used one this year when I had the flu.
I do get a good pension, after 30 years I get 60% of my pay. I do pay into the play. Between my pension plan and CPP I pay well over $600 every month. I do have benefits that I pay for and get 90% coverage for medical and dental.
I am educated. I have an honours degree in both Criminology and Psychology.
Just so you know.
Posted by: danny | Jul 17, 2021 11:13:37 AM
It wasn't that long ago when the roles were reversed and private sector was making way more than the public sector. I personally know people who work private making 6 figure salary. The exact same job in the public sector is making $45,000 a year. They risk job security when you work private. I'll sacrifice salary to ensure i'm employed until I retire. The choice is yours to make. BTW, EVERYONE PAYS TAXES... public and private.
Posted by: Victor Fenech | Jul 17, 2021 11:17:21 AM
I think like a great president Ronald Reagen said, you have till so ans so and if you are not at work, you are fired. I think the spoiled brats should try to work for the private sector and see what benefits they get after retirement. I believe all government jobs are essential, if they are not, why have them we can always pick people from the streets if the jobs were not essential. Fire the BUMS
Posted by: babu | Jul 17, 2021 11:19:26 AM
Good for you, Officer.
I don't think anyone has a complaint with you. I could never do what you do and I thank you for it.
It is mostly a problem (being underworked and overpaid) with office workers in cities who really do not have a lot to offer but they are offered a lot.
Posted by: Victor Fenech | Jul 17, 2021 11:22:39 AM
Like I said, Fire the Bums, there are a lot of people without jobs ready to replace them
Posted by: Utterly Amazed | Jul 17, 2021 11:30:35 AM
What a con game - Bernie Madoff would be proud. The corporate shell game at its best - keep the worker ants' eyes off the ball (the trillions of dollars going out the back door, side door, and even the front door) and have them squabbling amongst themselves about the pennies that have fallen through the cracks. The multi-nationals, their CEO's and all of their large investors created the economic collapse with their greed, turned to the worker ants to bail them out, used the "crisis" to lay off workers, lower the earnings of those who are left, and (irony of ironies) watch as workers point fingers at each other as the cause of the "problem". Isn't it wonderful to have control of the media so that "discussion" articles such as this one (and dozens of newspaper, radio and television "opinion" pieces daily) can , oh so subtley, create the conclusion that it's those damned worker ants (especially the unionized ones) that are the cause of the mess we're in. A M A Z I N G !!!!!!
Posted by: James | Jul 17, 2021 11:30:40 AM
The public sector is grossly overpaid, overstaffed and underworked. They are guilty of finanacial rape of this country. When you factor in benefits and pension plans the gap widens. Look at who's retiring at 55. This means they pay less into CPP ( no premiums paid upon retiring at 55) but frequently have a "bridge" subsidizing them full CPP until 65, then they claim the maximum CPP, again after having paid much less into it. The number of sick days taken by Public sector employees vs. private sector is grossly out of whack. Many are also paid out for sick days not taken upon retirement. Not at all uncommon for teachers to receive $40k -$50k in a "gratuity" for sick days not taken. The growth in the public sector is staggering, both in numbers and dollar cost, particularly since the late sixties early seventies when strikes were allowed. Not surprising when they have a monoply on their jobs - we cannot go elsewhere for the service but are forced to pay them. If Ford workers are on strike I have alternative organizations to purchase from. Not so with the public sector. I know many public sector employees who will privately acknowkedge "it is a joke." Competition is what makes anyone good at what they do. No competeition in the public sector is why they are not good at what they do. There is an old saying -
" If you want to get something done, give it to someone who is busy." This explains the difficulty and delays in getting things done by the public sector. They are largely idle people. In these economic times, do you hear any public sector employee worrying about their pension? Our taxes are just raised! It is time the entire sector was reviewed for payscales including benefits, as well as staffing levels. The cost for this mess at the municipal, provincial and federal levels is in the tens of billions of dollars per year. We can save several billion dollars per year by simply reviewing the sector and ensuring it is not overly compensated in terms of wages or benefits. All of our taxes can be reduced, money made available for healthcare, education, infrastructure, debt reduction. In addition when we make people less idle and busier our service levels will actually improve.
Posted by: John White | Jul 17, 2021 11:33:59 AM
NOT ONLY DO THEY MAKE MORE THE THE PRIVATE SECTOR YOUR MAKING NO MENTION OF THE PERKS THAT GO WITH THEIR JOBS LIKE 20-30K MORE COULD BE ADDED ON WE PAY FOR EVERYTHING THEY DO FROM CARS TO MEALS TO NAME IT GAS THAT WOULD BE SO NICE TO HAVE ALL THEM PERKS WOULDN'T IT NICE FOR US ALL YEA RIGHT AND TO HEAR THEM THEY STILL DON'T GET OR MAKE ENOUGH UNREAL SAD
Posted by: overpaid but will take the money | Jul 17, 2021 11:34:35 AM
Yes yes, we know compare apples to apples, oranges to oranges. I am a public service employee, on average we are paid way too much. I can only justify high wages in either sector if you have a unique skill set or you are saving your company money or making it money which will in turn cover the cost of your wage. Entitlement is why post secondary education is outrageous, why the gst introduced over 15 years ago hasnt helped our countries debt issues, why our health care system cost are out of control and we sit in emergency rooms on average 3 hours. Public sector workers who complain about the government helping GM have no opinion and should keep their opinion. Public sector workers have the luxury of hiding behind the government with their ineffective and inefficient operations that we apparently need. Both government officials, including politicians and unions in general should have a body that determines what the increases will be. Like a CRTC but for politicians and public servants which is objective enough to overcome the pangs of entitlement.
Posted by: Michael | Jul 17, 2021 11:42:50 AM
Utterly Amazed, why don't you try living in North Korea, Cuba or some other "workers' paradise" of your choice for a few years, and then tell us all about your experiences.
Posted by: marcomac | Jul 17, 2021 11:49:00 AM
The public sector is over paid by a long way. They work less, have generally better perks and pensions and have little or no accountability. Their unions (like most including private sector) protect the weak and lazy. I would have less problem with the public sector making higher wages if the workers were made accountable in the same way that us in the private sector are.
Posted by: Debbie | Jul 17, 2021 11:52:35 AM
Yes, you are absolutely right, the public sector is paid way too much. We are going through a city strike and the workers were actually offered raises and a signing bonus but turned it down because they want pensions for new hires. Who do they think is paying for this, it is the people in the city who have lost their jobs, taken pay cuts and don't know what is happening to their pensions that they have worked all their lives to save not given to. And why are we continuing to pay taxes when they have been on strike for two months. The taxes didn't go down.
Posted by: Laroo | Jul 17, 2021 12:02:18 PM
I think unions in general are losing sight of the real economy as it is now, and it seems that the public sector are especially out of touch. Lets look at the factors: Technology is putting constant pressure on an available expanding workforce. More work can be done by less people. Businesses chasing better bottom lines are off-shoring work to emerging and less expensive economies around the world. Less money is going into the economy because of lack of confidence in the financial and investment sectors. If the economy gets worse, governments will go bankrupt, and then where will the money come from to pay public sector workers.
Posted by: . | Jul 17, 2021 12:02:27 PM
Posted by: Utterly Amazed..............
Exactly, people will always blame their peers.
The Owners of companies need to Satify the CEO's need but most of all the share holders needs.
Shareholders expect there money they invested should Double if not triple, and if that does not happen they sell it off, companies get worried so they say well I dont want to lose money so we will lay off some people and say we needed to do this or we will go bankrupt. kinda true but they could keep their workers and them take a 10% decrease in pay they are still making Tons of money but atleast the workers who matter still have their jobs