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: Mike | Jul 17, 2021 4:42:56 PM
John, you made more spelling errors in your previous post than anybody else.
Posted by: Ian Ochitwa | Jul 17, 2021 4:46:09 PM
I was married to a Government worker ( Provincial ) for 18 yrs. We are no longer together now. In our divorce settlement there was absolutely no consideration for her benefits against my none being self employed. Do you know what it costs for glasses or dental work? etc. etc. She even had her birthday off with pay! I'm moving out of the country. It's a bunch of balogna.
Posted by: Ed Wallan | Jul 17, 2021 4:55:03 PM
It's hard to imagine any reason to either overpay or underpay people who work in the public sector. There should be regular monitoring of the salaries paid in the private sector for similar work and then adjustments made accordingly.
It seems to me that the Government (really, the taxpayer) has become an easy target for demands that exceed reasonable compensation rates.
Posted by: RRR | Jul 17, 2021 5:02:53 PM
my two cents, when i guy that digs a hole for the city gets paid more than fire, police and ambulance workers then we have a problem. i applied for a city job, didn't get but the starting wage as quoted on the website was 25.28 and hour. when i was looking at applying for the fire department police department the salry was in between 19 - 24 dollars per hour. difference of a few dollars. my point the people that deserve to get paid a good wage, don't. police fire and medics would never be allowed to completely walk off the job and i think thats the way it should be for all city services. the strike in toronto is stupid especially when they are talking about sick days most people don't even get that many sick days a year. its a slap in the face to the other services who have to work through the bargaining of their contracts. and still quality service. its time to take a look at how peoples tax dollars are being spent
Posted by: guy thomas | Jul 17, 2021 5:08:24 PM
If you all would sit back and just look at what happens when we all get our raises. Wages are a big part of the financial costs in operating a business, wages up prices up, prices up inflation up, wages up. this whole process starts at the bottom of any process. Mining wages go up, trucking wages go up, processing wages go up, office wages go up, etc and so on. Each product tells the same story. But it seems that all we seem to see is our own little place in the world and what that guy next door has in his yard or is going to ,it is all about getting all we can, while the getting is good , no individual group is to blame but we all are part of the problem. So your buddy has a bigger wage,a bigger house, and all the rest. Do you think you would be better off if you had more money coming in ? I think not. All you would do is spend and have more stuff. I quote a freind of mine "any fool can make a million dollars, it takes a smart man to keep it" Man needs so little but wants so much. Look to your own and stop looking at the rest of the world for quick fixes. That's all a big wage is, because it just keeps on going around and bits all of us in the butt. round and round and round
Posted by: MillwrightMan | Jul 17, 2021 5:16:19 PM
I have the unique position of have worked on both sides of the fence. I am a licenced millwright member and therefore I belive I'm middle of the pay scales so maybe I can be used as an average. I worked for "the city" and now for the largest non-unionized Canadian auto parts maker. So here are some comparisons for people to judge from.
"the city"
-$49,500 @ 40hrs per week
-10 sick days a year paid, can roll over until infinate until retirement.
-Pension-indexed
-RRSP match (can't remember the amount)
-3 weeks vacation to start. every year of service accumulate 1 week more up to 8 weeks maximum.
-all overtime is at 2x
-if "called in" paid for 8 hours even if its a 10 minute repair...I loved this, sometimes it was repaired before I got there and I still got paid, and then the hours I would have normally worked in the 24 hours following this were all at 2x regular rate.
-no skilled trades workers had ever been laid off in the history of the city.
- had to work shifts and be on call.
- benifits 100% drug, 90% dental, LTD, STD
"Canada's Largest Autoparts Maker"
-$72,800 @ 40 hrs per week
-no sick days
-no pension at all.
-RRSP match up to 6% of base wage but cancelled by company in Sept. The RRSP must be though a company picked plan (current rate of return is -23%, yes thats a negative in front of the 23)
-2 weeks vacation to start, 5 weeks after 10 years service.
-call in at 1.5 times normal wage minimum 3 hour pay but must stay at plant for 3 hours.
-overtime is 1.5 times after 40 hours and only "double time" Sunday.
-have been laid off for months, thus affecting wage in line #1
-must work rotating shifts.
-benifits 80% dental, 80% drug (must be generic mfg.) LTD but only for 2 years after that you're no longer employed by the company, STD.
The bad part about working for the city was that I felt stagnant. I was quite bored, the equipment was old and I never got to learn new things. So I jumped fence the other way the robots and technology of the auto sector are exciting and I'm learning something newall the time. The bad part is you always have this cloud over your head knowing that your employment and wage is based on competition, which used to be local i.e US and Canada but is now is global ie India and China.
Posted by: GB | Jul 17, 2021 5:29:14 PM
As a public service employee of 9 years I am paid considerably less than someone in my same job. For my job I am required to hold 2 engineering certificates and a journeyman's status. Being paid only $25 per hour when the average journeyman in the private sector is being paid $30 is a considerable salary cut. All benefits where I work come out of my salary and the pension is done 50/50. I work 8 hours of very physical labour a day and am on call 7 days a week 24 hours a day. Not all of us public sector workers are slackers and uneducated. Some of us are underpaid and underappreciated.
Posted by: stinky socks | Jul 17, 2021 6:06:12 PM
The striking Toronto workers should be fired and their jobs given to people that will do them properly. Maybe when these unionized workers have to go on social assistance they'll realize just how good they had it to begin with!
Posted by: DBG | Jul 17, 2021 6:06:13 PM
Front line public servants are not overpaid.They work in most cases with lowest tendered equipment JUNK.Private firms usually get there work on trips Daytona 500 tickets and look after the ones who gave them the work.Public service only gets better by adding to there staff attitudes of Get it done right away thinking outside of the box and getting reliable equipment operators and workers.Every once and a while public service should clean house to prevent mould from growing and recruit new innovative thinking.public service is a necessary evil and a balance of private and public servants is healthy no one can have it all one way.
Posted by: Jackie | Jul 17, 2021 6:06:26 PM
I also work for the public sector in Ontario. I am fairly paid for the job that I do, but I do not make nearly as much as my acquaintances in the private sector, although I am better educated than most of them. As mentioned, we all make choices, and my choice was to become an educator. If it was your choice to enter a different field, that was your choice. And, might I add, that public sector employees pay taxes too!
Posted by: Gerry Q | Jul 17, 2021 6:09:45 PM
To Private wurkur( uneducated public workers). How dare you comment that garbage workers are uneducated. I happen to work in that field in another metro (not TO ) and I can tell you that I have meet more people from different walks of life and have found that a very large majority of us have trades and skills behind us and have done good things with our lives and have contributed to our cities in many ways. The abuse that we take from the public I see as a scape goat because you choose lower paying jobs because you are to GOOD to do what we do. We put up with abuse to the systems and unsafe conditions because no one thinks of the next person. I like to say to you private Wurkur( by the way it is spelt WORKER) If you think we have a cushy job come do it for a year and I believe that you will have a different outlook towards us. Also not all unions allow to bank sick days. So stop painting all of us with the same brush, because it is people like you who make our lives that much more harder. Instead thank your garbage men and women for keeping your areas clean, And dont say that you pay our wages because we all pay taxes too!
Posted by: Pillaged | Jul 17, 2021 6:39:34 PM
It sickens me to hear about public sector employees. We live in a society whereby the government(public sector) extorts money in the form of taxes and then enriches themselves through the lavishes they shower upon themselves. Those of us who pay these taxes have no choice, it is either pay up or go to jail, it is that simple. The best thing I ever heard was a public sector employee say they pay taxes too, are they too ignorant to realize that the taxes they pay came from the taxes the private sector had to first generate then give to them. It was once said "the bureaucracy is there to serve the bureacracy". The public sector is nothing more than dressed up social assistance, so yes they are over paid.
Posted by: Trucking Jobs | Jul 17, 2021 6:45:09 PM
The only public workers that are overpaid are the dirty politicians...
-Jack
Posted by: Susan | Jul 17, 2021 6:55:01 PM
I have to have darn good education to become registered in my profession. I have to keep my education updated ( specified number of hours in continuing education), on my own time, each year, otherwise my license would be revoked. I work extra hours for no pay, because I work in health care. I always see patient, who needs my services, whether I get paid or not. I work under tremendous pressure and stress. I work days, nights, weekends, holidays. If I get sick more than three times a year, even if each sick day is only a day long, I am put on a "watch" list and may not get my next sick day paid. I work in an environment where infection, toxic substances and carcinoges are the norm. You think I am paid too much? I bet a TTC driver makes more than me. Why don't you check your facts before making a sweeping statement saying all public workers are overpaid.
Posted by: LGHunter | Jul 17, 2021 6:56:56 PM
I'm sorry, but I have to completely disagree with this story. I work for a provincial government, and we are some of the WORST PAID people in Canada where I live. It would actually be better for me to work for anyone outside of the government because they pay more and have far better benefits than what our cheapskate provincial government actually offers us!! And don't get me started on the joke that is the AUPE (our union), who does diddly-squat for us.
The above story does not take into account what POSITION people are in in regards to pay. There is a huge pay discrepancy between a Minister, Assistant/Deputy Minister, Executive Directors, or CEO, CFO, any other high-ranking acronym, and the rest of us, especially Administrative Support, which I am.
My position started at $36000 or a little less when I first started just over two years ago. I was able to go up some pay steps in the last couple of years plus achieving a new position level, so I'm just barely over $38000 now. But that is BEFORE taxes and deductions for CPP, Union Dues, Insurance, Blue Cross, etc. When all is said and done, I see maybe $28000 after everything is taken off.
Do you honestly think that I'm overpaid? For pity's sake, just last year I was doing the work of THREE FREAKING ADMINISTRATIVE SUPPORT PERSONNEL BY MYSELF for TWO DIVISIONS, and only getting paid my regular salary! We are so incredibly short-staffed that many people are doing the work of 2 or 3 people, and only getting paid for one, while suffering the health consequences. They can't or won't hire more people.
Get a flipping CLUE!! We are just as "badly paid" as anyone else in whatever sector depending on what the position is. That study is flawed. Or, you simply performed regular sensationalistic journalism, and focused on the "overpaid negative" and omitted to say what positions were part of the study, just to get a rise out of people.
That pisses me off.
Posted by: Lauren Boldt | Jul 17, 2021 7:10:08 PM
I work for the City of Calgary Water Services and NO, my salary is NOT paid for with tax money. Not only are we paid from the income taken in from utility bills (like any other PRIVATE sector utility company i.e. Atco gas, Shaw Cable), our department contributes over $40 million from our profits back into the City coffers to help reduce tax increases. As far as pay, I get bugged by friends who work in the private sector when they brag about their raises (way more than the inflation rate raises we City workers are lucky to get) and bonuses (which we don't get). I could have gone into the private sector and made more money but I preferred to stay where I was because of the security. I was told years ago that I'd never get rich working for the City but I prefer stability more then money. Early retirement? The earliest I can go is at age 55 and I still can't retire even after 35 pensionable years because I'll only be making 48% of the salary I get now. If I do retire, I'll have to get another job until at least 60 when my Canada Pension kicks in (if there still is a Canada Pension). We get some benefits but have to contribute a portion of our pay cheques to get them and we don't get to save our sick days like some unions.
All in all, there are benefits working for the public sector and there are benefits working in the private sector(SO QUIT YOUR WHINING!!!)
Posted by: ssills | Jul 17, 2021 7:16:59 PM
I am proud to say of have been a public sector work for 25yrs now. I don't know where people get there information that we are lazy and overpaid as I am not. I have seen private sector jobs that pay more then I get and I don't receive any special treatment. Yes I have sick time but haven't used any yet and I will lose it at year end. I have a very responsible job and have to account for everything I do. I am proud to serve the people of the province of ontario. I deal with both public and private sector people daily. I work 36.25 hrs a week and I am constantly on the run all the time. I don't no where people get there information but I am not overpaid or lazy. You can come spend a day with me and tell me what you think. I think you would look at differently. So get off your high horse on this overpaid and lazy public sector workers.
Posted by: dewd | Jul 17, 2021 7:20:11 PM
public sector workers make more and work less,its a good thing we all dont work for the government.someone told me one time, that government is really a form of welfare. so i guess those of us who work in the private sector should be proud that we actually contribute to society rather than sucking on it! cheers!
Posted by: mcshane | Jul 17, 2021 7:49:39 PM
Ha Ha Ha...during the "Boom" trade city employees were ridiculed every day...go to alberta, workers clear $100,000+ per year...babu you could have done the same wanker...I went for the big money I'm laid off. Even the public sector can't keep up with the cost of living, no one can. The rich get richer, now we complain? Perhaps we should all stick together...then we could afford to have children, Support ourselves, support our aging parents AND raise a family. There is still a mass shortage of trades in North America...our wages will continue to go down as immigration goes up. The rich will get richer....they are the only ones that benefit as do the politicians who smooth the way for them. (the sale of CP Rail in British Columbia for example).
Posted by: G-MAN | Jul 17, 2021 8:12:50 PM
In my City job I also get paid from utility income and our department is run like a business. My wage is decent(below industry standard though) with an ok benefits package(my wife's private company benefits are better) and I have a fair bit of job stability(with the exception of our continuing belief that the management is setting us up to be contracted out). I am University educated, but I am not working in my field, and also have advanced education within my city job.Just like any job there are slow times and there are busy times and we take them in stride and just like any job there are those who are lazy and those that pick up the slack. The Disparity in income comes at the supervisor/management level which has become very top heavy in our department. They are the ones who receive the bonuses, get multiple weeks off for holidays, can take sick time and make the decisions about what work gets done by the front line workers. The front line workers are the ones who get the grief from the public, work in conditions that most people would prefer not to be in, and have to do as directed by any number of foreman/supervisors/managers who can be clueless about how the actual job should be done.
Although the public system needs an overhaul in many areas the private sector has a record of non-accountability, increase in fee's and lack of service. This becomes especially true when the private company that takes over for the public department has a monopoly on the business.