Another Attack on Public Servants

Today’s National Post gave front page coverage to a “study” from the Frontier Centre claiming that wages of public servants have far outstripped those of private sector workers over the past decade.

“Wage increases doled out to federal and provincial public servants have nearly doubled those given to private-sector employees in the past decade, according to a new report that calls on governments to take a closer look at efficiency among their ranks of workers.

The Frontier Centre for Public Policy, an independent Prairie-based think-tank, analyzed the Statistics Canada reports for all 20 industries the national agency tracks and found that federal public servants’ wages rose by 59%, far outpacing the average worker. Provincial government workers came in at a close second with a 55% rise. Overall, wage growth for federal and public administrators dwarfs the 30% economy-wide weekly-wage growth, and shows the civil servants have seen faster boosts than any other industry.”

I got in a brief critical comment in the on line story, and my colleague Sylvain Schetagne has since gone through the tortured number crunching  which delivered this highly misleading conclusion.

The study looks at wage growth using the average weekly earnings from the Employment, Hours and Payrolls survey (SEPH) of Statistics Canada.

This method fails to control for the number of hours worked in each industry. Clearly, average weekly earnings will rise faster than the average if the proportion of full-timers in an industry is high and rising, and if hours are on the increase. Conversely, average weekly earnings will rise more slowly in sectors where there is a high and rising proportion of part-timers.

When looking at the results of this study and trends in part-timers by industry using the Labour Force Survey, Sylvain  found that six of seven industries at the bottom end of average weekly wage increases have seen an increase in the proportion of part-timers. At the other end of the spectrum, six out of seven industries at the top end in terms of increases in average weekly earnings saw a significant reduction in the proportion of part-timers. In fact, the proportion of part-timers in public administration was reduced by a third over that period of time, which contributes significantly to the increase in the average weekly wage over the decade, as workers were working more hours, not necessarily being paid a lot more per hour.

Moreover, a number of Statscan studies have shown that the incidence of unpaid overtime in the public sector is significantly higher than in the private sector. In 2009, 14.3% of public sector employees worked unpaid overtime, as compared to 11.4% of all employees.

The study also neglects to consider several reasonable explanations for a modest premium in public administration hourly wage growth compared to the average.

Some significant pay equity adjustments took place in public administration during that period of time, and the workforce in public administration has been aging at a more rapid rate than average. Even in the private sector, more experienced workers generally command higher pay. And there has probably been an above average  shift in the public administration job mix from clerical and other less skilled workers workers to highly educated professionals.

As for the alleged union effect highlighted by the Frontier Centre, it is true that public sector wage settlements did somewhat exceed private sector settlements over this period, but only by a small amount, and that after a decade in which public sector settlements lagged behind. (Private sector settlements averaged 2.5% 2000-09 compared to 2.8% in the public sector.)  Private sector settlements are now running a bit above those in the public sector.

8 comments

  • Unbelievable, truly.

    I am just finishing a study with Cupe on this topic. Not sure if I can jump the gun on the release which will be next week.

    Lets just say this, using the census data, controlling on 4 digit occupation (NocS), gender and age, there is less than a 2% difference in average annual pay, between private and public sector workers working within similar occupations.

    The release will be the best estimate, from a statistical
    quality wise Perspective that has been done in many years.

    It will also show that where there is a difference in favor of the public over private sector occupations, it is concentrated in lower waged, female dominate occupations. The study shows that on average, male workers actually make slightly more in the private sector than comparable occupations in the public sector.

    My results will stand for themselves. Can’t wait for the release.

  • Christopher Albertyn

    In support of what you say, I recently gave a talk in South Africa on interest arbitration in Ontario. I asked the Office of Collective Bargaining Information (OCBI) of the Ministry of Labour to provide statistics of the differences between the outcomes over a period of time between the private sector and the public sector, and between arbitrated and non-arbitrated settlements.
    The summary of their stats for Ontario, in the 11-year period, 1998 to 2009, was as follows:
    Private sector:
    Arbitrated settlements: 28 (50,828 employees) average annual increase: 2.5%
    Non-arbitrated settlements: 1,877 (1,658,929 employees)
    average annual increase: 2.5%
    Public sector:
    Arbitrated settlements: 407 (282,903 employees)
    average annual increase: 2.5%
    Non-arbitrated settlements: 2,842 (2,875,878 employees)
    average annual increase: 2.7%
    This says nothing, of course, of the base from which those increases were granted, particularly after the public sector austerity in Ontario during the 1990s.

  • Andrew, what is the use of having servants if you cannot attack them? :),

  • I think Chris is right to note the fact that the base from which these increases were granted is a key variable here. Not only were tremendous austerity programs imposed in Ontario, but throughout the provinces and federal government.

    In response to Travis’ comment, I think that’s precisely what the Frontier center is trying to do here. Jump on the bureaucrat-bashing bandwagon that had built up speed since the beginning of debt problems and ensuing responses by the Trudeau and Mulroney governments in the 1980s. Canada’s public service shifted from a widely respected institution into a symbol of waste and inefficiency-as if bureaucrats alone (and not their political overlords) were the cause of the problem. It was far easier to attack nameless bureaucrats than their own policies.

    I think that, following all of these huge cost-cutting measures and huge knock on the public service in recent decades, we would do well to lay off the public service a little bit. Our books and economic growth prospects are exceptional by OECD standards and, not to say that the public service is the only reason for these, it has at least had a valuable contribution to play. Our public sector management policies and principles are world-renowned and have allowed Canada to leverage our position to remain at the forefront of the global public management agenda- perhaps so much so that the Chinese needed to dig a little deeper to understand what we were doing? If only we could start to convince our own public that we’re on the right track.

  • Seph is the worst collection vehicle to do this. The business register accounts that Flags public sector entities is actually quite poor. Even the employee counts for both sectors are estimated. Without one control variable how could anybody take these numbers serious.

    Garbage.

    Seph is good for many thi gs but this is not one of them. I thought that Stacey had a policy that prevented abuse of statistics. A user is not allowed to release data unless approved by stat can. Was there one quality measure mentioned?

  • The Frontier Centre for Public Policy is not an independent think tank and you know it. The FCPP has pushed Climate Change denialism and is responsible for a lot of misinformation on topics that presumably are close to their supporting Foundation’s hearts. Their involvement is supporting Vincent Gray illustrates how dishonest they are.
    Guys you need to be bluntly honest about “foundations” and their proxies.

  • Guess what boys .The public service union bashing is just beginning.Read what is going on in the in the US .They have come to the conclusion that the public servant is costing to much.

  • Sorry the first comment should not have been posted.

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