There’s been a lot of debate about who gets paid more—public or private sector workers. What is ignored is the evidence showing that within the public sector pay and benefits are more equitable. Public sector pay provides better wages for lower paid occupations which means smaller pay gaps all around, including for women and racialized workers.
The reality is large employers (500+ employees)—whether public or private sectors—provide considerably better benefits and pensions than smaller employers. Since most public sector workers are with large employers, their benefits should be compared with the benefits provided by large employers in the private sector. In Canada, 70 per cent of workers in public administration, utilities, education and health sectors work for large employers, compared to just 36 per cent of private sector employees.
Unfortunately, there’s very little comprehensive data available on the costs of employee benefits in Canada, but we can look to the U.S. for some insight. A recent survey from the Bureau of Labor Statistics shows that while paid leave, health, pension and other benefits average just $9.71/hr over all for private industry, the relative cost of these benefits for large private employers, $16.21/hr, is actually higher than the public sector, at $15.92/hr.
There are much greater disparities in benefits provided by the private sector to employees by occupational level and by wage level, with the private sector providing much less in the way of benefits for lower paid workers. Average costs of benefits for sales and office occupations in the private sector are only $6.86/hr, close to half the $12.30/hr in the public sector. Private sector benefits are also much lower for part-time workers and in non-union workplaces.
The Canadian information that exists suggests similar results. With public health care, the costs of benefits are lower in Canada, but even mid-sized organizations pay about 36 per cent of their payroll in benefits, according to KPMG. Those working for smaller employers, in non-unionized workplaces and lower paid occupations in the private sector receive considerably lower benefits. The cost and value of benefits provided by larger employers, unionized workplaces and for higher paid occupations are more similar to the public sector. The difference is that public sector employers provide much more equitable benefits—and pay—to all their employees.
While emplo-yers, politicians and business lobby groups have gone on the offensive to cut public sector benefits, claiming they’re much more costly and generous than the private sector, the data shows that the real inequalities in benefits aren’t between public and private sector workers; they’re within the private sector. This is why expanding social protections and universal public services provided to all, including public pensions such as the CPP, better quality public health care, and introducing a national pharmacare plan, are so important. They help ensure all Canadians, no matter who they work for, can have a decent standard of living.