Are public sector employees overpaid? That’s the suggestion of a new Fraser Institute study, which finds compensation for government workers far outpaced that of their private sector counterparts last year.
The study says government workers at all levels are pulling in about 11 per cent more than private sector workers in similar jobs.
Author Charles Lammam says they’re doing better on benefits too.
“We found that eight out of 10 government workers have pensions that guarantee an income in retirement, versus one out of 10 in the private sector. Government workers retire about 2.3 years earlier, are off for personal reasons more days in a year than their private sector counterparts – about five days more.”
“Governments cannot afford to continue to provide these overly generous compensation packages, particularly as they struggle through serious fiscal challenges, and it’s really important to maintain fairness to the taxpayers who are ultimately funding this.”
The study also finds public sector workers retire more than two years earlier, take nearly twice as many personal days, and were far less likely to lose their job.
“We think the gap needs to be closed, but in the other direction”
The president of the BC Federation of Labour agrees that the public-private pay gap needs to be eliminated, but says private sector workers should be earning more.
Irene Lanzinger says wages have stagnated, with three quarters of new jobs being part time.
And she says the gap is partly driven by gender issues.
“In the public sector, men and women are largely paid the same. There’s a small pay equity gap, but it’s very small. Whereas in the general population, women only earn 81 cents for every dollar a man earns. So we have a more equal situation.”
Calling for better senior pensions, minimum wage hike
Lanzinger says rather than cutting pensions, we should be ensuring more seniors have them so they don’t have to work into old age.
“We have seniors in this province living in poverty. 70,000 seniors are working for wages less than $15 an hour. That’s because they don’t have a decent pension.”
She also says that recent experiments have shown paying employees more can actually stimulate the economy.
“Seattle went to a $15 minimum wage, the restaurant industry swore that every restaurant in the city would go out of business. And you know what’s happening as they go to a $15 minimum wage in Seattle? The restaurant industry is booming. And you know why? Because people can afford to go to restaurants.”
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