Private sector and public sector wages / government employee comparisons
Author:
Mark Milke
2002/01/21
Since most government spending is a result of how many employees exist and how much is paid in wages (annual capital expenditures are, relatively, much smaller) employee numbers and wage scales are worth looking at in more detail.
Two studies - both from governments and produced by government workers - are worth looking at closely. The first one is "A Guide to the BC Economy and Labour Market," produced by BC Stats and published several years ago (i.e., before the NDP left office). In the report, it noted the following as it concerns wages:
"Public sector workers were generally well-paid, receiving an average of $797 weekly, which was 28% higher than the all-industry average-. Federal ($821) and provincial ($822) government employees received relatively similar pay packets on average. Those working for local governments typically earned $753 for a week's work."
The report also notes (in the ellipsis above) that government workers had a standard workweek of 35 hours, four hours more than the provincial average workweek of 31 hours. That explains some of the difference in pay, and many people might take issue with the private sector average, but that's the statistic and the commentary on private v. public wages by BC Stats. It can be found here: (http://www.guidetobceconomy.org/)
The Canadian Policy Research Networks, a federally government-funded thinktank, produced another look at public and private wage comparisons in 2000. That study found that even after accounting for other factors that could explain the wage premium in the public sector (age, education, occupation, and union membership,) government employees still had an average pay advantage of 7.6%. The average wage advantage for provincial government employees was higher, at 11.4%. Keep in mind that the 11.4% statistic (unlike the BC Stats study noted above) was an average across all provinces, and most provinces didn't have an NDP government over the past decade, one highly sympathetic to public sector labour and happy to boost their salaries whenever possible.
As it concerns the number of civil servants in B.C., Statistics Canada noted recently that British Columbia has 342,055 public sector jobs (though this StatsCan data does not differentiate between full-time and part-time employment.) The breakdown is 35,896 federal positions, 174,626 provincially, 96,832 municipally, and 34,701 positions at government business enterprises (usually Crowns). The file is here: http://www.statcan.ca/cgi-bin/DAILY/daily.cgi date=011213.)
Remember that government ministries do not directly employ or pay many people whose salaries are anyway paid by taxpayers (nurses, for example). Other government workers are in Crowns, technically separate from the government, but as is the case with BC Ferries, still costly to taxpayers. Thus, the 342,000 figure should be kept in mind over debates about job cuts to the public sector in British Columbia. Taken together, the provincial public sector will still be quite large. One way to cut the cost of government but keep more government workers would be to have wages comparable to private sector wages. Don't hold your breath.
Note:
Apparently a former NDP MLA has e-mailed members of the press and argued that my calculations last week on provincial cutbacks, notably as it concerned Saskatchewan, were incorrect. The allegation is that a chart on the CTF website, labeled "Total Provincial Spending," doesn't actually show a decline of 10.1% in spending in Saskatchewan in the early 1990s, even though that's what was in the CTF-BC news release. The conflict occurs because my calculations were, properly, not based on that particular chart, given that "Total Provincial Spending" includes debt interest.
My calculations were instead based on program spending cuts as a percentage of program spending only, which are different numbers and come from an entirely different chart. These calculations use the same base assumption - program spending only - as made by the B.C. government last week to come up with their 8% "decline in spending" figure. To compare the 8% B.C. figure to spending cuts in other provinces, one has to use the same base assumption, which is provincial program spending. Any other base assumption (i.e., one that includes program spending and debt interest) would be an "orange" comparison to my "apple" comparison, and in fact would necessitate a revised estimate of how much the BC cuts are as a percentage. The former NDP MLA should have phoned me for the proper chart and saved himself the embarrassment of an elementary mistake and an invalid comparison.