B.C. government workers have 6.7% higher wages, superior benefits compared with private-sector employees

Government employees in British Columbia earn more and enjoy better pensions and other benefits than...


Government employees in British Columbia earn more and enjoy better pensions and other benefits than comparable private-sector workers, according to a Fraser Institute report released January 20.

Workers in the public sector earned 6.7% more than those not working for governments, but the disparity didn’t end there.

The value of pension plans between the two groups varied widely. Almost all government workers – 87% – have a registered pension plan. On the other hand, fewer than one-in-five private sector workers – 19% – have this benefit.

As well, the types of plans that do exist in both groups were vastly different. Almost 96% of government pension plans were defined-benefit plans, while only 47% of non-government pension plans were this type.

The distinction between these two pension plan types is important, Charles Lammam, study co-author and Fraser Institute associate director of tax and fiscal policy, told Business in Vancouver.

“A defined-benefit pension guarantees a certain level of benefits in retirement,” Lammam said. “A defined contribution plan is dependent on the amount of contributions one puts into their savings and how well their investments perform. The guarantee of the defined benefit is critical.

“[The defined benefit plan] is much less risky, because it’s basically ensuring some level of benefits in retirement, regardless of how the investment performs.”

As well, retirement comes sooner for public-sector workers, the study found. Government workers in B.C. retire, on average, at 61 years old. This is 2.8 years earlier than the average retirement age for non-government employees of 63.8 years old.

The study also found that government workers had greater job security than their private-sector counterparts. Fewer than 1% of public-sector employees lost their jobs in 2013, compared with 3.3% in the private sector.

As well, government workers took more personal days off work than did non-government staff (12.7 days versus 9.3 days).

The study looked at staff in federal, provincial and municipal governments and compared them with comparable non-government workers, taking into account age, gender, type of work, industry, education and occupation.