Address the Disparity in Private Sector - Public Sector Wages, Pensions and Benefits

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    Open Government, Government of Canada. (2018, February 28). Address the Disparity in Private Sector - Public Sector Wages, Pensions and Benefits. Retrieved from http://open.canada.ca/en/idea/address-disparity-private-sector-public-sector-wages-pensions-and-benefits
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    “Address the Disparity in Private Sector - Public Sector Wages, Pensions and Benefits.” Open Government, Government of Canada, 28 February 2018, http://open.canada.ca/en/idea/address-disparity-private-sector-public-sector-wages-pensions-and-benefits
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Votes: 167

Open Government needs to create serious venues for addressing really tough and "NOT POLITICALLY CORRECT TO TALK ABOUT"  issues facing Canadians. We need to bring these issues out into the open from their "neat little hiding places", where they've been swept under the rug so to speak. For example: There is a very large Compensation/Benefit Gap  issue in Canada between Public and Private Sector workers. This tends to create a two-class system. Why is this issue not being addressed or openly discussed.

Study after study shows that public sector worker pay is 10% - 20% higher than private sector worker pay for the same type job. And the total compensation gap does not stop there. Public Sector workers all have defined benefit pension plans whereas the average private sector worker does not even have a pension. When we add in dental plans, prescription drug plans, number of sick days taken per year, vacation days available per year, the disparity becomes embarrassing. Public sector workers in Canada are retiring younger and younger on full pensions adjusted to inflation with benefits while private sector workers in Canada are working longer and longer past 65 with no pension and no benefits. This is insidiousness. Private sector worker tax dollars are taken to enable public sector workers to retire earlier and earlier while they (private sector workers) in turn have to work longer and longer. Something is very wrong with this picture.  For there to be any kind of  success with the "Open Government" initiative, the these kinds of tough issues and topics MUST be tabled and openly discussed in a moderated environment - objectively, factually and peacefully.

Milestones
1. Set up independent study group (not all from pubic sector and academia but rather selected on basis of population - i.e. ~35% of workers in Public Sector and ~65% in Private Sector so this is split of study group selection. The ~65% from private sector can't all be from near-government institutions  like banks etc. Their selection must represent Canadian industry employment demographics).
2. Make available stats can information and assistant to this group

Deliverables 
1. Group submit finding and submit recommendations/report after 18 months with monthly progress updates to Sponsor
2. Publish findings and set of remedial action recommendations for Canadians to review on website
3. Legislative action plan to eliminate Public Sector - Private Sector wage, pension and benefit gap for jobs of similar types / values

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Comments

Submitted by Steve on February 22, 2021 - 11:49 PM

If the gross wage of a government worker is paid by the private tax payers then to arrive at a net wage it would make sense that the private sector taxes also pays government employees taxes and all other benefits gained from that government body employment.
If this is denied then the government body should extend this concept to all Canadians. This is a horrible structure.

Submitted by Greg Stephenso… on February 12, 2021 - 3:03 AM

Thank you for posting this.
Looking at gaps between public and private sector wage, pension, and benefits is important for our long-term success.
It also speaks to quality of life differences. It is telling when looking at retirement age, vacations, etc. Private sector citizens deserve equal opportunity for a positive quality of life.
This does not diminish the value of public sector workers,
But it is important to point out - what resources would we have with out the private sector also?

Submitted by Elizabeth Tayl… on April 22, 2020 - 11:50 AM

It does feel like this gap is widening and it seems unfair . The taxes we pay in the private sector allow people in the public sector to have a life style and benefits that we can not afford for ourselves. It is only getting worse. There needs to be accountability for our tax payer dollars. I value the work that the public sector does on our behalf but it should not break my back.

Submitted by Anonymous on April 05, 2020 - 6:42 PM

The defensive comments here from public sector workers /retirees is so typical of the denial one is confronted with in any attempt to have an open discussion on the subject of private/public sector pensions.
Now, as a 63 year old

Submitted by Alex Machida on June 22, 2019 - 5:51 AM

I'm not sure where these assumptions are coming from. I've seen the articles of fake news such as the Fraser Institute. Like many, I've worked in the public sector for a few years and before that in the private sector for nearly two decades and I can honestly say you can and do make a lot more in the private sector. Especially in any Professional career role. Also many large private corporations offer great benefit (dental / medical), and some do offer pension plans. Even without it though, the extra $10 - $20k / year I made in private was more then enough to make my own pension plan through investments. If anything, those in the public sector need major raises to match industry standards already in the private sector. A typical Construction Project Manager in a private construction firms makes way more then their counter part in Government. Likewise a typical Engineer or Director in a private utility provider makes more then their counter part in crown corporation. People don't come to Government for the money. They do so to make a difference in their community. I hope this helps. .

Submitted by Paul Kucera on April 09, 2021 - 5:56 AM

You are talking about professional positions, people with higher education. Yes, in private sector these positions may earn more than in public sector. However, these jobs are in minority compared to the huge number of general labor jobs in private sector. Laborers earn a lot less and often do not get the benefits like early retirements, indexed pensions, vacations and perks common in the public sector. Laborers pay the taxes to support such benefits. Don't forget that.

Submitted by Chris Jezovnik on May 16, 2020 - 2:31 AM

The examples chosen don't reflect the average Canadian worker. Most do not work for large private corporations. Most do not have titles like "Construction Project Manager", "Engineer" or "Director" in a private utility. Most do not have private pension plans.

Submitted by James Armstrong on April 20, 2019 - 12:20 PM

The majority of Canadians are in the private sector and most after having contributing the maximum permitted RRSP contributions throughout their working lives cannot afford to retire early. Benefits like hospital, dental, drugs, vision will cease immediately on retirement. Those fortunate enough to have a DCPP are completely at the mercy of the ups and downs of the market while the public sector worker collects a gauranteed index linked pension for life. I'm sure private sector employees would be more than happy to contribute to a similar plan that would provides similar benefits, but I doubt the contributions made would cover the costs, and that's the inequality.

Submitted by Anthony Sinn on May 18, 2019 - 2:10 PM

As a private sector non union worker, I would jump at the opportunity to contribute to a defined benefits pension. The CPP, while public is bare bones at best. We are at the mercy of the banks and financial industry and most are not equipped to be our own pension fund managers. I know many workers who don't even know what a TSFA or RRSP is. Let alone a dividend, mutual fund, or capital gains tax for example. Yes, it's easy to learn the terms but managing a portfolio or trusting a financial manger who is paid on commission to sell products is counter productive to retirement planning. Open up the public pension system to all citizens. I do understand that public sector workers do contribute a signifigant amount of their wages to their pensions.

Submitted by Thomas Kay on March 22, 2018 - 7:25 PM

On https://www.canada.ca/en/employment-social-development/services/collective-bargaining-data.html There are tools that search through collective agreement data around private and public sectors wages and benefits. This data could be opened in formats. It could show that when the private sectors have stronger collective bargaining representation, a private sector employee group does move into much stronger wage and benefits positions than public sector employee groups. It would also be interesting to see data about loss/gain in collective bargaining representation in private and public sectors. We could then see if losses in private/public sector bargaining power has had direct evidence based impacts on the wage/benefit gains and losses in same job parity groups over equal periods of time.

Submitted by Anonymous on October 16, 2018 - 5:04 PM

Interesting idea about opening summary data from the sample of collective agreements that the goverment collects to build data models, but what about sampling the GIG enconomy groups data as well inorder to extract the same data sets across time to export that data as well to support enabling of such trend analysis? Individuals doing GIGs have no main support group, so is Canada setting one up for for every Canadian contributing to GIG ecomony in Canada?

Submitted by Rae Dulmage on March 10, 2018 - 4:34 AM

This is a major issue in our country. I am aware of companies that do not have good benefits and have no pensions. Employees have not had raises in 6-10 years and the employer is in a globally competitive market that constrains his ability to address. The public service should switch to a defined contribution plan and needs to reduce its size and long term costs to reduce the burden on the economy.

Submitted by Michael Lucas on March 06, 2018 - 12:45 AM

I believe everyone has the right to a Pension of one sort or another. Public Service Pensions are a right for those who work for the Canadian Public. There should be something at the end of a career spent serving Canadians in such a vital sector as the Public Service Arena.

Submitted by Kevin A. Threader on March 03, 2018 - 2:17 PM

I am a big supporter having written about the need for many facets of government to be publicly addressed and / or voted-on online. After years developing systems including CBC I write about the need for taking an AI approach to this 'cool' insight into 'open government'. I will add this chapter to my site at 7thangel.ca

Submitted by Catherine Fisher on March 01, 2018 - 10:27 PM

Be sure to include ALL facts in your review. Over the decades, employees have paid into their 'government' pension plan at agreed-to contribution rates. The Supreme Court of Canada ruled the pension surplus that Ottawa withdrew over a decade ago to help reduce the deficit did not have to be returned to the plan. No private sector employer would have gotten away with removing $23B from an employee pension fund. Further if Ottawa had left this money in the plan, there would be no need to discuss, "how do we pay for increasing numbers of employees who are retiring during a time when Canada is reducing the hiring numbers". In good faith I paid into my pension plan, I did not get paid higher wages than private sector in similar work and part of the reason I stayed as a public servant was the value I placed on my pension. I was not alone. It is a sad day when the focus is on how to make a pension worth less than on how we can make everyone's pension worth more..

Submitted by Greg Stephenson on February 12, 2021 - 3:11 AM

Tell this sad story to my wife who spent 6 years in post-secondary school and is struggling in a few dollars more than a minimum-paid job with no pension. She is hoping for a raise but the challenges with COVID probably make this impossible.

There is a clear disconnect with reality between public sector workers and what they have to ‘pay’ to have their rich retirement pensions and the private sector who have so little options.

Let’s be clear - a ‘public sector’ job is a sweet deal and you should feel lucky to have the privilege to be paid at top dollar and have a pension that makes you many times richer than many in the private sector could ever hope for. Please, at least acknowledge how lucky you are vs the many who struggle in the private sector.

Sincerely,
Greg Stephenson
Barrie, ON

Submitted by Gordon Holmes on February 28, 2018 - 10:38 PM

Wen is the Government going to change to a "Benefit Contribution" plan. We cannot continue to continue to pay pensions to an increasing number of employees who do not and will not help contribute to there our welfare. This must stop and make more employees save for their own retirement.

Submitted by Anonymous on March 11, 2018 - 7:06 PM

Public service employees have considerable mandatory deductions made from every pay throughout their employment. There is no option to not contribute during difficult financial times and to contribute when things aren't so tight or less in the beginning and more later when you don't need to pay for kids sports or school. It doesn't matter if you are a single parent, disabled, have a parent or disabled child you are supporting....those deductions come off like clockwork. The surplus collected in the plan was used to pay down your federal debt, not returned to the plan. I believe that qualifies as a contribution to citizens welfare even aside from the years of committed public service. Did you know that an employee must remain polite, respectful and act in a citizens interests regardless of whether that person has acted unkindly, rudely or abusively toward them. I have seen front line workers be yelled at, spat upon, threatened with physical harm yet they continue to work in that persons interests to do the best they can under the conditions they are working within. The reason they are employed there....because they want to make a difference, and because they believe that they owe you, the citizen, a debt of service. They not only paid for their pensions, they earned them.