TORONTO - Ontario's public-sector workers earn more, retire earlier and are less likely to lose their jobs than their private-sector counterparts, a new Fraser Institute report says.
Workers employed by the taxpayers earn on average 13.9% more in wages, or 12.4% more once unionization is factored in, and 77% were covered by a registered pension plan in 2011 that in the vast majority of cases offered defined benefits, the Ontario Prosperity Report comparing public and private compensation found.
Only 26% of private-sector employees had a registered pension and almost half were defined contribution plans, which don't guarantee the level of benefits, the report says.
The public sector retires 1.3 years earlier on average and has much stronger job security, it says.
"While a lack of non-wage benefits data means that there is insufficient information to make a definitive statement about total compensation between the private and public sectors, the data that is available indicates that the public sector enjoys a clear wage premium," the Fraser Institute report says. "There are also strong indications that the public sector has more generous non-wage benefits than the private sector."
The Fraser Institute argues private pay is limited by a company's profits, while negotiating public compensation is a political process where the employer has the option of running deficits and hiking taxes.
Public workers are more likely to offer a monopoly service, another advantage in negotiating because a strike is unlikely to erode their customer base, the report says.
The Ontario government, which will spend $12 billion more than it takes in this year, has been attempting to keep a lid on public-sector wage increases.
Before leaving the premier's office, Dalton McGuinty oversaw negotiations that returned contracts with two-year, 0% increases in government management, frontline services and teaching.
The government also signed deals with doctors to reduce fees and, on a go-forward basis, ended teacher sick-day banks.
Ontario Premier Kathleen Wynne has committed to a 1% increase in overall government spending until the budget is balanced as planned in 2017-18.
There remains significant compensation pressures, including teacher battles over their contracts and a previous agreement to make OPP the highest-paid police force in the province.
Public-sector unions have argued that their employees tend to make less than private-sector staff over time, especially in a stronger economy, and that job security has been a tradeoff for lower wages.
"The Canadian research examining wage differences between the two sectors over the past three decades consistently indicates a premium for public-sector workers," the Fraser Institute report says. "The specific wage premiums vary depending on the data source and timing. What is clear, however, is that a premium exists."
WAGE COMPARISON: PUBLIC VS. PRIVATE
*source: Fraser Institute
Percentage of employees covered by a registered pension plan in 2011
Average retirement age, 2007-11
Job loss as a percentage of employment in 2011