Pay gap widening

Back in the early 1900s, top labour issues in Canada included things like; safe workplaces, a five-day work week and decent wages.

Through government legislation and voluntary business decisions, the aforementioned issues are no longer problems in most workplaces.

However, a new significant labour issue in Canada has emerged - the growing gap between government employee pay and private sector pay. In plain English, the typical government employee is getting a much better deal than everyone else.

Consider Statistics Canada data obtained by the Canadian Taxpayers Federation that shows from 2001 to 2011, the average government employee's pay increased from $756.01 per week to $1,023.20; a 35.3 per cent increase. Over the same period, the average private sector worker saw their pay increase from $598.81 per week to $777.69; a 29.9 per cent increase.

From 1977 to 2009, the number of government employees with workplace pensions increased from 75.5 per cent to 86.2 per cent. Over the same period, private sector employees saw their workplace pension coverage decrease from 35.2 per cent to just 25.3 per cent.

In terms of defined benefit pensions plans (the better type as it guarantees a cash payout for life even if the fund has run dry), 81 per cent of government employees have them compared with just 14 per cent in the private sector.

But government jobs shouldn't have pay levels that are much higher than private sector positions that are providing similar work. For example, a government accountant shouldn't make 25 per cent more in pay and benefits than a private sector accountant performing similar duties.

Sure, you're going to find the odd government position that currently comes with lower pay than in the private sector. But on the whole, government employees in Canada are getting a much better deal than employees doing similar work in the private sector. For instance, a federal bureaucrat was fired in 2009 for spending 50 per cent to 75 per cent of the work day looking at news, sports and yes, pornography. He appealed, arguing he was 'bored' and that it was the government's fault. Incredibly, the employee in question has since been hired back and is making between $76,010 - $104,026 a year (his pay range is known, but exact pay level is not disclosed.)

To correct the overall pay and benefit gap, most government services should be opened up to competition.

That would not only ensure competitive costs and efficiencies are achieved, it would give everyone a fair shot at bidding to provide government services.

For services that can't be easily put out to competition, the government should ensure it isn't offering increases to unions that are far higher than what taxpayers are receiving. In terms of pensions, switching from defined benefit to defined contribution plans would also be a good first step in closing the gap.

Colin Craig is the Prairie Director for the Canadian Taxpayers Federation