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: KEN HAMILTON | Jul 17, 2021 12:17:45 PM
THE ISSUE IS NOT THAT THEY ARE OVER PAID RATHER THEY ARE UNDERWORKED. IT IS MY OBSERVATION THAT THERE ARE 2+ CIVIL SERVANTS FOR 1 IN THE PRIVATE SECTOR. FURTHERMORE, THEY CANNOT BE HELD ACCOUNTABLE FOR UNDERPERFORMING AT THEIR JOB AS THE UNION CONTRACT PROTECTS UNDERPERFORMERS WHEN IN THE PRIVATE SECTOR THE UNDERPERFORMER IS RELEASED FROM HIS OR HER JOB / POSITION.
Posted by: Phil | Jul 17, 2021 12:23:37 PM
WOW - James, you really need to take your head out of your ass! Evidently you didn't read my post. I'm a federal public servant and I double dog dare you to spend a day in my job and see how you like it.
Posted by: CRW | Jul 17, 2021 12:26:32 PM
I have worked both in the private and public sector (provinical unclassified contract) and must agree that in some areas public sector workers are overpaid for what they do, the education required and the responsibility they carry. The perks such as bankable sick days, amount of vacation time, paid continuing education, benefits etc. are ususally not seen in the private sector. However the public sector has a downside. My contracts have not been renewed because Queen's Park and management has decided that they want the administration staff in my office to be 100% Francophone in an area that is 30% Francohpne. I am not bilingual. All of this to be 'politically correct'. So a word of warning to all those with kids in school... whether you are in northern Ontario or southern Ontario, make sure your kids learn French if you want them to have a chance at the Federal/Provincial jobs... The largest waste of tax payers money is not in wages but in abuse. Money is spent, needed or not, out of the annual budget just so the budget isn't reduced the next year. In my office the frequency of travelling to meetings in Toronto is taken to the absurd, with usually personal business attached to government business. Most meetings could be done via in-house video-conferencing but instead mileage/car rental, food, hotel, overtime is paid out. While the employee is out of the office at a meeting or travelling to a meeting his work in the office is not getting done so management makes the argument that they need more staff! Perhaps the Provincial Auditor should examine the operating budgets and practices of the ministries and their offices...
Posted by: Michael | Jul 17, 2021 12:27:14 PM
Enough with this class warfare mentality. The business owners are not enemies of the workers. In fact, without business owners the workers would have nowhere to work in first place. And they won't pay their workers more than their market value just like all of us wouldn't pay a mechanic $50 for an oil change if all other mechanics charge $20. The reason the governments can afford paying more than the market value is because they spend somebody else's money. This is the root of the problem.
Posted by: Wayne | Jul 17, 2021 12:33:23 PM
I agree with that some of the Public workers are overpaid but I also think 80% of Unuinized workers are overpaid. Unions are only good for unskilled and workers that who most likely would not be able to hold down a real job. You look at the auto industry what they were making. As for the public sector workers (and some other unionized workers) you also see that when it comes to them working they need 2 or 3 people to do the same job. I don't know how many times you drive by city workers and see 3 people standing around while 1 person works. The whole system is flawed because it does not benefit good workers. We are going to be broke if we keep giving employees these benefits like pension lesser hours for more pay because when alot of them retire we still have to pay into the pension. The politicions are really bad for that because you have 143 of current and how many are retired and still get paid? we are paying for workers even after they stop working.
Posted by: Sammy | Jul 17, 2021 12:34:31 PM
Just a few comments.
Be thankful for what YOU have and don't begrudge what other people have.
Non-unionizes private sector wages & benefits are positively influenced by what private and public sector union workers obtain in wages & benefits.
Can't beat em', might as well join them!
Posted by: Dodge | Jul 17, 2021 12:38:12 PM
I managed hotels for years and got paid 30,000.00 per year with no benefits except health care. I worked 80 hours a week. I got no sick days and if I was off sick I still went to work for a few hours. The Puvlic service employess, with the exception, of Police, Fire and EMS get paid away too much for what they do. I think it is time to fire them all and contract out the whole business, with the above exceptions. I managed an Hotel in New Brunswick and next to the hotel was a Federal vuilding, all they seemed to do was to take coffee breaks and their lunch hour. If I had busines to do there you did not go between 9:15 and 9:30, 12 and 1 and 3:00 to 3:15 as there was no one in the office to help you. The office had 3 times the amount of people it needed and usually they sat around talking. So don't tell me anything about the puclic service being overworked. I am not saying all publis service employess are lazy but the most are. They are that way because of the politicians who want their vote and that of the Union. It is called vote buying
Posted by: Just sayin | Jul 17, 2021 12:39:34 PM
I'm a professional who worked in the Provincial civil service from 2005 to 2008 and I was absolutely shocked by the low professional/analytical skills of many, many highly paid civil servants - particularly management.
The typical situation is someone with a BA/BS or similar who does not belong to a professional organization and whose only educational work after University (for many 20 or more years ago) is a variety of one or two day workshops specific to administrative tasks. And for this many are paid $75K plus a year and will get 80% of their last 3 years income each year as pension.
Posted by: rob | Jul 17, 2021 12:45:35 PM
If you do the math, they have probably lost any increase they would get over the last 4-weeks anyway, so, they should get back to work and be glad to have a job that pays more than you're well.
Posted by: David Shepherdson | Jul 17, 2021 12:45:56 PM
The economic analysis relating to the determination of wage rates suggest that organization size is the single most significant factor in predicting wage rates, followed by unionization. Large, unionized employers pay higher wages than smaller, non-unionized employers. To the extent that the public sector is comprised of very large employers, and is largely unionized, it is not surprising at all that wages rates are higher than for CFIB members comprised of very small, non-unionized employers.
Having said that, politicians tend not to be prepared to spend their political capital taking on public sector unions. There is also evidence that large private sector employers, such as in the auto industry, were generally not prepared to take too hard a line with unions because, historically, they could pass on costs to the consumer and they risked loss of market share if they took a long strike.
Regardless, it is not the worker who should be demonized, but those with the political and executive decision-making power who fail to act responsibly and be accountable for their decisions.
Posted by: Rooby | Jul 17, 2021 12:56:10 PM
Overpaid?!?!?!? As a "public sector worker" I can assure you that I am NOT overpaid. I would love to see the breakdown of these stats across the country and by profession. My guess is that you would see a trend suggesting that Ontario and Quebec public sector workers topped the wage scale while several of the other smaller provinces such as Saskatchewan, Newfoundland and New Brunswick public sector workerswere grossly underpaid. I also agree that it is not that public sector workers make too much or that they have a shorter work week, but that private sector workers are not paid their worth. Frequently, public sector workers are paid a salary and even though their work week may be stated as 35 hours, their work week is far longer. Teachers are a prime example. paid for a 35 hour work week but in reality it is sometimes closer to between 50 and 70 depending on the subject areas taught, the teacher's experience level, and how often they switch up their curriculum.
Posted by: beatricebill | Jul 17, 2021 1:01:54 PM
What seems to be missing from this whole discussion is the fundamental distinction that public sector jobs are funded from the private economy. These jobs should be retractable by the private economy. This will only begin to happen if private sector forces refuse to fund the public sector. The Toronto municipal workers strike should be a graphic reminder to private sector taxpayers that public sector employees see themselves as working not for the citizenry who fund their salaries, but for the union. It is time for the private economy to cut off funding to the public sector. Stop paying property taxes!
Posted by: Bill Ford | Jul 17, 2021 1:08:29 PM
It is what it is.
Right now some public workers are doing alright. What is happening in Toronto is a leadership issue, not a wage issue. The politicians and the police have had fair wage increases, however, other civil servants are being held back to a minimal or no increase at all. That is the issue behind the strike, nothing else. Everybody gets held back or nobody gets held back. Leadership is just common-sense but most politicians don't see it, or don't have it.
Some folks are knocking the pension plans of some civil servants. The plans model the same plans offered by banks and insurance companies. They offer the workers 2% of their wages to a maximum of 70% of the average of their best five years. Also, the worker is forced by legilslation to pay into that pension: more than 10% of their income over their work life. That payment is matched by the employer. The plan is only "rich" because the worker has paid a small forturne to make it rich.
Getting back to leadership; we have to look at the tax-free compensation paid to some of our politicians and retired politicians. Many are paid full time wages for part-time jobs. When the leader's house is order, the leader can make many meaningful changes. When the leader's house is in kaos, kaos prevails.
All of the experts agree the only way to get ourselves out of this recession is for the consumer to start spending. It seems counterproductive to me for us to be talking about freezing/ or reducing wages. The media and the politicans are scaring the crap out of everybody. Who is going to want to spend in the einvironment that you are creating. Common sense.
It is what it is.
Posted by: A Proud Hard Working Canadian | Jul 17, 2021 1:09:31 PM
Major understatement. With the protection of the unions, they have managed to work themselves into a culture of entitlement, laziness and poor productivity that has been evident for many years now. There may have been once hard working public service employees but now they work to do as little as possible while trying to justify their demands for better benefits and wages. Then when it's time for a raise, let's strike. Let them remember that taxpayers pay their wage, and the payor should always have a say in what they are paying for.
Posted by: Greg | Jul 17, 2021 1:12:18 PM
Hell Yes. I want sick days so I can bank them and have a nice retirement fund. I want to work 5 hrs. and get paid 8 hrs. I want full health care beneifts so I do not have to pay any fees. I want to ripoff the taxpayers as much and as fast as I can before they realize what has been going on. I would suggest that we get rid of the unions and replace them with fair treatment policies.
Posted by: John Kersten | Jul 17, 2021 1:15:08 PM
The hardest job public workers face at the job is boredom in going through the same routine over and over again, five days a week, 48 or more weeks each year. Generally, their job positions are secure, but the the routines are exhausting unless they do something about it. Many public workers show up looking tired and drawn out, maybe from being out on the town the previous night. I recently waited two and a half hour to get a simple routine task done for me before leaving, only to walk out of another location in less than ten minutes with the satisfactory result. In the first location, the receptionist had enter my request without proper direction and nobody noticing it, while someone, not knowing what to do with the entry, simply erased entry. At the second location, the reception person was alert and effective and directed me to a desk where the clerk just did what was needed and I was out of the door again. I talked with some picketer on the line at a number of locations here in Toronto and over half of the membership all know they're 'on strike' but most don't kmow what about save they 'want more money.' I've told them so did I but doubted I would get it unless the performance was their and my wage index didn't already exceed comparable wages.
The fact remains that, in Toronto especially, most public sector workers are at least on equal footing with the private sector, if not better of. To combat boredom on any job, including in the public sector, one must simply show up rested and relaxed at work in the morning and get away from daily routine by doing more than just be at home all weekend. Go do some sight seeing, go to the park or library, get out of town for a few hours. Engage the family in attending a ball game or enjoy an amusement park. Book a local or regional trip to some point of interest.
Hopefully, the striking public workers will come to their senses before to long and start counting their blessings they already have.
Posted by: Holly | Jul 17, 2021 1:18:58 PM
Well the public sector IS overpaid. And im sick of my tax dollars paying high school drop outs to collect my garbage and make twice the wage I do for an educated job. In this day and age I think its about time those big fat raises were adjusted to put their wages on par with the majority of Canadas work force. And Ive worked union, if you like working with lazy, non productive, non stop complaining miserable whiners, then the union is the place for you.
Posted by: B DORLAND | Jul 17, 2021 1:19:50 PM
think before you talk ! ask yourself this question ? why were unions formed in the first place? then talk !!! and by the way if workers were payed everytime the cost of living went up their wages would look like CEO'S.....
Posted by: Kevin Shea | Jul 17, 2021 1:44:55 PM
Anytime Unions are involved - then YES the employees are OVERPAID ! We need to come to our senses - ESPECIALLY in tough economic times - unionized employees should be part of the SOLUTION for a change because they have been an enormous part of the PROBLEM for many many many years! The sooner we get rid of all the Unions - " THE BETTER OFF WE WILL ALL BE COLLECTIVELY MY BROTHERS AND SISTERS ", !!!!!!!!!!!!!!!!!!!!!!!
Kevin Shea
Ottawa Ontario
Posted by: Bill | Jul 17, 2021 1:45:01 PM
Ofcourse they are grossly overpaid, thats how they can afford to go on strike for so long,
&&& wait till they go back to work,!!!!!
they.ll get lots of overtime cleaning up the mess they have personnaly made!!!!
The people they work for are so stupid, OH yeh, thats US!!!!!!