Analysis: Private, public sector wage gap growing

Sue-Ann Levy, Toronto Sun

, Last Updated: 11:25 AM ET

TORONTO - Tish Fedora’s husband has owned and operated a car wash in the GTA for more than 30 years.

She said more often than not her husband works seven days a week, “even Christmas Day,” and does not take a holiday.

While they’ve made a living wage over the years, the couple has not eked out enough to set money aside in an RRSP or a Tax-Free Savings Account (TFSA).

Now as they consider selling the business, they’re really concerned about where they’ll invest the proceeds and whether they’ll be at the mercy of the volatile stock market.

“We’re not going to be on a defined pension like my next-door neighbour who is a bus driver,” she said.

Fedora thinks many private sector employees are getting to the tipping point where they can no longer sustain the tax burden that pays for the high wage packets, benefits and pensions provided to those in the public sector.

“They (the wages and benefits) have been awarded as vote buying by successive provincial governments,” she added.

Dan Kelly, president and CEO of the Canadian Federation of Independent Business (CFIB), said he’s concerned about the “societal dislocation” that will occur when private sector employees can’t afford to retire at 65 but see that their neighbours leaving the workforce at 57 and spending winters in Florida because they worked for the government.

“I really worry that the fabric of our country will start to pull apart because the jealousies between one group and another will be pretty enormous,” he said.

“The new rich are often public servants who are in much better financial shape than the average Canadian,” Kelly added.

Indeed they are.

Studies from both the CFIB and the Fraser Institute, a public policy think-tank based in Vancouver, show a consistently significant gap, not just between private and public sector wages, but with respect to the benefits and perks, as well.

In its February 2013 Ontario Prosperity Initiative report, the Fraser Institute found that on average, Ontario public sector workers earned a whopping 13.9% more in 2011 than their private sector counterparts doing similar jobs.

But as the Fraser report emphasizes, if public sector wages are rich, the benefits and perks of the job are out of this world.


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