Hey Occupy, what about the 20%?
OttawaSun.com – opinion/columnists – Public-sector workers make nearly a third more than other Canadians
September 01, 2012. By Lorne Gunter ,Qmi Agency
Much was made last year by the “Occupy” movement about the privilege of the 1% vs. the poverty of the 99%.
But if the movement and its supporters are so against unearned privilege, how come we have never heard anything from them about the 20% vs. the 80%?
I’m talking about the 20% of workers employed in the public sector vs. the 80% of us who work for private-sector employers.
Public sector workers — not just civil servants and bureaucrats, but also teachers, nurses, professors, Crown corporation employees and others — now make up a privileged class with higher pay, shorter work hours and far, far richer pensions than the rest of us.
And nearly all of it is paid for by the 80%.
At $42 billion, total civil service compensation is now the federal government’s largest expenditure. That figure is nearly double what is was just a decade ago and accounts for almost 17% of all of Ottawa’s spending. And whereas the incomes of private-sector employees have advanced just 10% against inflation in the past 20 years, federal employees have come ahead 22% in real terms.
The figures are similar among provincial and municipal employees. The cost of the average public-sector worker is currently more than $90,000 a year compared to just under $70,000 in the real world.
According to the Canadian Federation of Independent Business, public-sector workers now make nearly a third more than their private-sector colleagues when pay, perks and hours of work are factored in.
This has happened because governments aren’t spending their own money; they’re spending yours and mine. And since they have the legislative power to extract ever more money from us (and to borrow nearly limitless amounts when they run short of taxes), governments feel free to act as though there are no upper limits on what they can pay their employees.
But perhaps the biggest gap between public and private employees comes in their pensions.
According to Statistics Canada figures obtained by the Canadian Taxpayers Federation, governments pump more than twice as much per employee into their workers’ pensions as private-sector employers do. In 2011, governments put $8,700 per capita into public-sector pension plans while private employers put in just $4,100.
This is partly due to the fact that most public workers only contribute about 35% to 40% of the cost of their annual contributions (vs. 50% for private workers), which means governments have to “top up” higher amounts. But the larger contributions are also due to the fact that public plans are permitted by regulators to build benefits at a faster rate than private plans.
And, yet, even with all this extra money, public-pensions plans are hundreds of billions of dollars in debt.
They couldn’t even come close to paying all the pension money they’ve promised without enormous subsidies from taxpayers.
There are other ways public-sector workers have it over the rest of us on pensions, too.
The average age at which most qualify for a pension is 58 vs. 62 in the private sector.
And 87% of the 3.6 million public workers in Canada have pension plans, while just 24% of private-sector workers do.
Even more significantly, 82% of public-sector workers have what are called defined-benefit plans. These guarantee them a percentage of their salary (typically 70%) averaged over their five years of highest pay, even though, of course, they have not been contributing anywhere near that amount during their working lives.
Such pensions are not permitted in the private sector unless they are fully funded by employer-employee contributions. But public-sector plans face few such regulations.
So where’s the outrage about this new privileged class?
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