Private Sector Vs Government Jobs and Which is Better?

Private sector vs public sector employment

Public sector jobs seem to be holding their own, yet last year we heard some rumblings about the substantial layoff that was supposed to take place at the CRA.

It used to be that those who were anxious to find a solid job would look at the government sector favorably.  Then the interest in this began to falter a bit when it appeared as though the departments were going to start tightening their belt on spending. Wage freezes became more common and hiring was stalled.

So what makes a government job so favorable anyway? It could be that some studies have showed that those individuals who work in the private businesses doing the exact same type of job earn $8,150 less a year than those filling the government positions.  That is not to mention all the additional perks that come with being a government employee either. Like the benefits.

This is not to say that are government employees are to fit into this scenario but it is applicable to Canada Post, and the Federal government sectors.  According to the government they have done their part to cut costs, but some figures are showing that Federal employees are looking at a 13% salary premium which climbs to slightly above 32% when you include the benefits.  Municipal employees ring in to a lesser amount, coming in at 8.9% premium and a climb to 22.3% once you add the benefits in.  The provincial level is low man on the totem pole keeping within the government sector showing a 5.5% premium with a  21.2% increase with benefits.

So should we balk at this because these wages are being paid out of the tax payers money? It probably isn’t a wise idea. If there were to be layoffs to reduce the wage costs then we as tax payers are only going to be paying out with the other hand. It would mean the unemployment rate would go up, and more E.I. claims would have to be paid. The private sector is in no shape to provide additional jobs, it can’t even meet the unemployment demand now.  Stats Canada is indicating that are currently about 1.3 million job seekers. It is still on the rise from 6.6% in January to 6.6% in February. This was to be expected with the oil price drop.

In respect to hiring only 28,000 new jobs opened up in the last year in the private sector. However the experts are optimistic that the unemployment rate will hang around the 75 mark. The public sector did open up about 43,000 jobs.

Bottom line is everyone will have to do their part to stimulate the economy which in turn will help the not so impressive job market.


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Sam Seidman, CPA, CA, LPA
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