Wage gap smaller in public than private sector, Canada

There is a smaller wage gap between men, women, aboriginal and minority workers in Canada in the public sector than in the private sector, says a new report published by the Canadian Centre for Policy Alternatives (CCPA) on Wednesday.

The study found that aboriginal employees with university degrees earn 44% less than their non-aboriginal counterparts in the private sector, compared to 14% less in the public sector.

Women with degrees in the private sector earn 27% less than men. In the public sector the gap is 18%.

Minority workers with university degrees take home 20% less than their non-minority peers in the private sector, compared to 12% in the public sector.

CCPA senior researcher Kate McInturff, said:

“Salaries are higher in the public sector precisely for those groups of people who experience the greatest discrimination in the private sector – because the public sector goes further in correcting those discriminatory practices. The result is not higher wages but rather a more equitable system of pay.”

(Source: Canadian Centre for Policy Alternatives)

A number of factors contribute towards a smaller wage gap in the public sector, including more access to sick leave or family leave, equal pay legislation, and higher unionization rates, the authors say.

Full-time pay in the public sector is, on average, about 2.3% higher in the public sector when one compares occupations that exist in both sectors.

The reason the bottom line is marginally higher for public sector occupations is that employees who face lower levels of discrimination in the public sector are seeking out those jobs in larger numbers.

Similarly, employees who get larger salaries in the private sector are more likely to flock in that direction.

McInturff concluded:

“Public sector wages are actually lower for some of the highest paid workers in our economy. The difference in public and private sector wages results from higher levels of discrimination in the private sector and a more equitable system of pay in the public sector.”

“Narrowing the Gap – The Difference That Public Sector Wages Make,” Kate McInturff and Paul Tulloch, ISBN 978-1-77125-153-2.