Government employees in Alberta received 9.3 per cent higher wages on average than comparable workers in the private sector last year, and also enjoyed much more generous non-wage benefits, says a study released Tuesday by public policy think tank the Fraser Institute.
“Bringing government-sector compensation in line with the private sector would not only help governments in Alberta control spending without reducing services, it would also maintain fairness for taxpayers,” Ben Eisen, a senior fellow with the Fraser Institute’s Alberta Prosperity Initiative, said in a news release.
The study, Comparing Government and Private Sector Compensation in Alberta, also found:
- Pensions: Almost seven-in-10 government workers in Alberta (66.8 per cent) have a defined benefit pension plan—which offers a guaranteed level of benefits in retirement—compared to less than one-in-10 workers in the private sector (6.3 per cent).
- Early retirement: Government workers in Alberta retire 1.8 years earlier, on average, than private-sector workers.
- Personal leave: Government workers in Alberta are absent from their jobs for personal reasons 63.2 per cent more often than private-sector workers—12.4 days compared to 7.6 days.
- Job security: Government workers were five times less likely to experience job loss than private-sector workers—0.6 per cent compared to 3.2 per cent.
“Of course, governments in Alberta should provide competitive compensation to attract qualified employees, but clearly wages and benefits in the government sector are out of step with the private sector,” said Steve Lafleur, study co-author and Fraser Institute senior policy analyst.
The report said Alberta has run nearly uninterrupted deficits since 2008/09. The newly elected United Conservative government has unveiled its first budget, rolling out a four-year plan to balance the budget. As $26.9 billion or 55 per cent of the Alberta government’s operating budget was spent on public-sector compensation in 2018/19, the budget made an important step toward tight control of public-sector compensation and the reduction of the size of the public sector. The province had the highest total compensation for all public-sector jobs per capita in 2018 compared with Quebec, British Columbia, and Ontario, said the Fraser Institute.
“In 2018, Alberta’s government-sector workers earned a wage premium of 9.3 per cent, on average. When unionization is accounted for, the wage premium declines to 6.2 per cent. These findings are in line with previous research investigating wage differences between the two sectors. While there is insufficient data to calculate or make a definitive statement about the differences in non-wage benefits between the public and private sectors in Alberta, the available data suggest that the public sector enjoys more generous non-wage benefits than the private sector, including higher rates of pension coverage, higher rates of defined benefit pensions, earlier ages of retirement, lower rates of job loss, and more days lost per worker,” the report concluded.