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Wage Watch: A comparison of public-sector and private-sector wages

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March 2015

Ted Mallett, VP & Chief Economist

The broad public sector is a major employer in Canada. As a group, it employs 3.6 million Canadians—more than one job in five. Because the large share of these jobs are supported in whole or in part by tax revenues, it is certainly appropriate to question how representative and appropriate public sector salaries are in relation to private sector norms. Latest findings based on the 2011 National Household Survey, which represents earnings from 2010, show a continued and substantial gap in salary compensation in favour of government or public sector employees—even after adjustments for differences in occupation mix, age and education. The gaps grow even wider once employment benefits such as working hours and pensions are taken into account.The impacts on the public purse are significant, adding almost $20 billion to the hard costs of compensating the public sector in 2010.

Among the big public sector employers, the federal government has the largest gaps, with a salary premium of 13.0 per cent, which grows to 33.2 per cent once benefits are taken into account. Premiums paid to municipal employees are almost as severe—8.9 per cent (22.3 per cent with benefits). Provincial governments, as a group, appear to have a little more control over salary premiums at 5.5 per cent, but benefits bring the gap rises to 21.2 per cent with benefits factored in.

CFIB’s analysis also covers public sector groups such as education, health care institutions, urban transit agencies and Canada Post—with findings along similar lines.


Wage watch