The future of public-sector jobs - Macleans.ca

The future of public-sector jobs

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

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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