The future of public-sector jobs

Today’s job seekers can’t always turn to the government for secure, highly paid work


 

Pawel Dwulit / Toronto Star / Getstock

The taxpayers will only put up with so much, and when two Winnipeg parks workers were recently photographed snoozing on the job—90 minutes in the lee of their lawn tractors, said witnesses—the limits of public patience became clear. Furious residents called for the summary firing of the hapless employees, and the city mounted an investigation of the incident. Even the union that represents the staffers felt moved to voice its disapproval: This was not, said an official with CUPE Local 500, a representative image of life in the public service.

Not any more, at least. While government positions still remain attractive to those seeking security and a middle-class lifestyle, the stereotype of the public sector as a fallback for the less-than-ambitious is starting to disintegrate. Budget deficits at the federal and municipal levels have prevented the public sector workforce from expanding in recent years, while most areas of public enterprise are unlikely to see much growth in the future. Even health care and social services, work oriented around the aging population, is projected by federal forecasters to grow at half the pace it did in the past decade, or about 1.7 per cent annually, and governments face increasing pressure to close the wage and benefit gap between civil servants and their private sector counterparts. Some have begun clawing back perks granted in previous rounds of collective bargaining.

All told, say experts, public service jobs may be harder to come by and less rewarding than they have in the past. “Governments are more or less in a hiring-freeze mode,” says David Madani, Canada economist with Capital Economics, an international research firm. “As people retire, they’re simply not filling positions.” That sense of caution, he adds, could last for years. The most recent forecasts produced by Human Resources Development Canada predict that employment growth in education and public administration will slow “drastically” between now and 2020, to less than 0.6 per cent. The outlook for wage growth in the public sector is similarly underwhelming: One study, by the Hay Group management consultants, predicted that it would lag the private sector in 2013 by more than half a percentage point, struggling to keep up with inflation.

To a degree, the next generation of job seekers is paying for the past successes of public sector workers in collective bargaining. Bureaucrats, teachers, utility workers and others were able to amass enviable packages of pay, benefits and pensions over the decades, in part because they held monopoly over the services they provided. If they walked out, the public would feel the pain keenly. So would their bosses over in the legislative branch. Many of those gains were realized when Baby Boomers were in their career primes, and now, with hundreds of thousands in retirement, governments and workers alike are feeling the burden. In Ontario, for instance, teachers are paying higher pension premiums, while their pay has been frozen and their coveted sick-day banks curtailed. In B.C., school support staff have not had a raise in four years.

Meantime, ideas have changed inside and outside government about what services belong in the public realm. In most cities, garbage collection is performed by private firms, while provinces busily outsource ongoing business, such as employment counselling. “They’re trying to contract out as much as possible,” says Morley Gunderson, an expert in labour economics with the University of Toronto. “And they’re substituting capital for labour in subtle forms. You have self-service kiosks and online service for licence renewal, and things like that.” Those trends are nowhere near as pervasive as in the private sector, Gunderson notes, but he adds: “If you can monitor the output [of a service] easily, then, usually, contracting it out saves quite a bit of money.”

That’s not to say the public sector will dramatically shrink. Skilled employees such as teachers, nurses and accountants continue to be in demand. And any government that tried to outsource basic administrative services outside its jurisdiction would face a political backlash. Still, anyone who gets a public service job is well-advised to moderate expectations. After years of kicking the cost can down the road, governments are only starting to pay the bills, and overburdened taxpayers are in no mood to be trifled with. Workers who fail to understand that are probably in for a rude awakening.

PERCENTAGE OF EMPLOYEES COVERED BY A REGISTERED PENSION PLAN IN 2011

PUBLIC SECTOR: 88.2%

PRIVATE SECTOR: 24%

AVERAGE RETIREMENT AGE IN CANADA, 2007–11

PUBLIC SECTOR: 60

PRIVATE SECTOR: 62.4

COMPONENTS OF TOTAL EMPLOYMENT, 2011

PRIVATE SECTOR: 64%

SELF-EMPLOYMENT: 15.4%

PUBLIC SECTOR: 20.6%

Source: Comparing Public and Private Sector Compensation in Canada, April 2013, Fraser Institute


 

The future of public-sector jobs

  1. Interesting, what this story chooses to ignore is that in some areas of the public sector 50% of their labour force is able to retire over the next 5 years. The labour force may only grow marginally but when half of them are set to disappear they are going to have colossal shortages. Even if you assume some boomers try to hang on and the government downsizes somewhat you’ve still got big labour problems. Although, given the pension numbers cited a whole lot of them will willingly retire.

    Am I missing something here?

  2. MacLean’s the Canadian Fox news magazine. Bashing Public Sector Unions, while remaining Mum on Free Trade, Globalization, 1%ers earning obscene wages, corporate corruption, Corporate welfare, corrupt politicians. The shrinking of the private sector unions, and what that meant for middle class wage earners is not on the agenda, just bashing the last remnant of middle class wages.. When all the people that can’t wait for unions to disappear finally get their wish, they will wish they weren’t such selfish a-holes. Let me put it in terms even MacLean’s can understand, no middle class no Capitalism!! Well unless, you prefer Fascism!

    • MacLean’s is owned by Rogers so there really isn’t anything you have said that should surprise anyone. Or, should I say, anyone who actually pays attention to what is going on.

    • What is your solution. Hire everybody in the government and pa them lots to do nothing.
      Government employees have a sense of entitlement that justify them sleeping on the job or calling in sick etc. This is because they are untouchables.
      There is a big difference between public sector unions and private sector unions. We need to have stronger private sector unions and weaker public sector unions.

  3. The private sector is riddled with incompetence and it’s just as bad when that same private sector is receiving millions in public subsidies and contracts. So two ne’er-do-wells on the public payroll slacked off and got caught. This is not a reflection of the entire public service or even a fraction of it, anymore than two lazy construction workers smoking dope on the job (I’ve witnessed this) reflect their workforce.

    The media is full of attacks on the public sector and baby boomers lately, I notice. It’s all part of the plan to divide the population of have nots and distract us from the disgusting greed of the rich who enjoy paying no taxes, while they stuff their wealth (trillions of dollars) in offshore tax havens.

    Last year, Facebook’s Zuckerberg made a billion dollars and paid no federal income tax. Now that’s what I call a real problem, not two slackers who by now have been read the riot act.

    • You think they performance manage in the public sector. lol You have to kill someone for them to be able to fire you. Without the threat of firing the “riot act” as you call it is useless.

    • You have a point and I agree with you about the incompetence in the private sector which is most important in the argument of privatizing public services.
      But for providing services at least the private sector has competition which is what the public sector lacks.

      • I have to disagree, unions across Canada over and over have presented governments with mutable business case providing solid evidence that public sector is more economical, but yet no one can see it, or tend to ignore it.

        • All I know is that our neighbourhood wanted to fix the sidewalks and the city would not do it but they said we could do it ourselves as long as we hired their people for $70 per square foot. I know I can do better than that in the private sector.
          Also I had a tenant that worked for the city. He basically came home every day and smoked weed as he had pretty much finished his quota of work in the morning and could hang out all afternoon and do nothing.
          Those may be exceptional examples but they are the ones that directly affect me and that is what I notice.
          Both of those examples are created by public sector unions. My question is where is the homeowners union?

          • No unfortunately they are not exceptional examples. Hopefully in this day and age with the number of cell phone camera’s more of these examples will be documented.
            mmmm…. “I think I have an idea for a blog site”.

  4. I am a government employee and have been on a wage freeze for the last 5 years. My benefits are average as is my vacation time. The numbers are skewed. Not all public service employees are reaping huge pay or benefits. My wage has become barely middle class.

    • I hear ya! I worked in the private sector for a decade, and lived well! And yet I have been with the provincial government for over 4 years, and although my wage has increased slightly in those years, it still leaves me unable to survive off my income alone. I live with my sister, and I try to live quite frugally, and yet still live paycheck to paycheck. I work full time hours, but am unable to get classified as a full time job, only getting part time, term position that continues to be renewed. It is almost impossible to get a loan since I am not guaranteed work 3 months down the road. I am lucky to have a pension that union people before fought to get, but I have very limited benefits again because of my term position.

      And I am proud to say I work 8 hours a day, standing on cement floors all day in a laundry facility for a health facility, and there sure as heck isn’t any slacking where we are! We work hard for the little we earn!

      http://www.elephanttalk.ca

    • Our government officials only have to serve 5 years in office then get to retire !
      Does seem fair ? We need to change some laws.

  5. How unfair it is look in percentage, when we don’t have all the proper info, everyone knows about public sector pension, and how all public servant have one, my question is? How many privet sector citizens have a RRSP and other investments for retirement, and if they don’t they will be collecting supplemental support from the Government,
    ( i.e. tax payers who has a good pension) and from privet citizen money saved from a honest day of their hard work.

    • How many private sector employees forgo Christmas bonuses, work unpaid overtime and sack away 1/3 of their paycheck to fund their pension? Not too many I’m sure. I’m a public sector employee, and I see my friends with similar education and experience in the private sector earning much more, enjoying bonuses which they spend lavishly (not socking any of it away). If they complain in 20 years that I can retire with my earned pension, I definitely will bring up their well spent bonuses and failure to save.

  6. How unfair it is look in percentage, when we don’t have all the proper info, everyone knows about public sector pension, and how all public servant have one, my question is? How many privet sector citizens have a RRSP and other investments for retirement, and if they don’t they will be collecting supplemental support from the Government,
    ( i.e. tax payers who has a good pension) and from privet citizen money saved from a honest day of their hard work.

  7. The myth that public sector employees are making a bundle continues. The latest PBO study on public sector wages has debunk that myth, yet Maclean’s choose to ignore that.
    No one was complaining when those who worked in the private sector were reaping the double-digit bonus and generous pay increase while the public sector were getting just inflation-matching increase.
    There is a trade-off in life and those who choose to work in the public sector accept that trade off.
    For those who envy the public sector employees, perhaps they should join the public sector when the economy picks up.

    • Most bonuses and pay increases in the private sector are paid on merit and job performance. They are earned. I worked in the public sector for 27 yrs. My pay increases, vacation days were based on seniority only. The big benefit is my pension because the hospital I worked for contributed to it and also it is adjusted for inflation. In other words, because my employer was a hospital- a government funded institution- my pension is partially funded by the taxpayers, some of who are self – employed and have no pension of their own. This is where the unfairness lies. We all need to plan for our retirement in a way that is equal for public and private sectors.