Fraser Forum

Sunshine list misses major problem with government worker pay in Alberta

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Sunshine lists are meant to provide taxpayers with information on how much governments are paying their highest paid employees. Alberta’s recently released sunshine list shows that last year, 3,511 Alberta government employees were paid more than $107,071 (including salaries and other benefits).

Although headline-grabbing, these sunshine lists alone do not provide a complete picture of whether compensation in the Alberta government is too high, too little, or just right. One way to assess the state of government compensation is by comparing it to compensation levels in the private sector for workers with similar characteristics.

A recent Fraser Institute study did just that. It measures the wage premium enjoyed by government employees in Alberta at all levels (federal, provincial and local). Using Statistics Canada data from 2015, the study finds that government employees receive, on average, 7.9 per cent higher wages than comparable workers in the private sector. Critically, this wage premium accounts for differences between individual workers in the two sectors such as age, gender, education, tenure, experience and type of work.

But of course wages are just one component of total compensation, which includes pensions and other fringe benefits such as early retirement and job security. It’s the total cost of compensation that matters—not the individual components. Yet even on various non-wage benefits, the available data suggests government employees in Alberta come out ahead.

First, consider the imbalance on pensions, one of the costliest benefits provided to workers in both sectors. In 2015, seven of 10 government workers in Alberta (70.8 per cent) were covered by a defined benefit pension plan—which guarantees a level of benefits in retirement—compared to less than one of 10 workers in the private sector (7.6 per cent).

Government-sector workers in Alberta also retire, on average, 1.1 years earlier than private-sector workers and are away from their jobs for personal reasons 73 per cent more days per year (10.7 days vs. 6.2 days in the private sector).

When it comes to job security, another non-wage benefit, government employees have a distinct advantage. In 2015, 4.6 per cent of private-sector employment in Alberta endured job loss compared to just 0.4 per cent of government-sector employment.

Indeed, government employees not only enjoy much greater job security, they also receive greater pay and other fringe benefits. Sunshine list aside, there’s a more fundamental problem with the pay of government workers in Alberta.


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