Comparing Government and Private Sector Compensation in British Columbia

With heightened interest in how wages and non-wage benefits in the government sector compare with those in the private sector, this study estimates wage differentials between the government and private sector in British Columbia. It also evaluates four available non-wage benefits in an attempt to quantify compensation differences between the two sectors.

While a lack of non-wage benefits data mean that there is insufficient information to make a definitive comparison of total compensation, the available data indicate that the government sector enjoys a clear wage premium. After controlling for such factors as gender, age, marital status, education, tenure, size of firm, type of job, industry, and occupation, government workers in BC (from the federal, provincial, and local governments) enjoyed a 6.7% wage premium, on average, over their private sector counterparts in 2013. When unionization status is factored into the analysis, the wage premium for the public sector declines to 3.6%.

There are also strong indications that the government sector has more generous non-wage benefits than the private sector. The available aggregated data suggest—similarly to the wage comparison—that government workers fare better than those in the private sector: 86.9% of public sector workers in BC were covered by a registered pension plan, compared to 19.2% of private sector workers. Of those public sector workers covered by a registered pension plan, 95.7% enjoyed a defined benefit pension, compared to 46.9% of private sector workers.

In addition, public sector workers in British Columbia retire earlier than their private sector counterparts—about 3 years earlier, on average—and are less likely to lose their jobs (3.3 percent in the private sector versus 0.8 percent in the public sector). Government workers in British Columbia also lost more time to absenteeism in 2013 for personal reasons (12.7 days on average) than their private sector counterparts (9.3 days).