Bloated Bureaucrats or Underappreciated Public Servants? How do Public and Private Sector Wages Compare in Alberta?

  • Richard Mueller University of Lethbridge

Abstract

A year before the United Conservation Party was elected in Alberta, the final budget from the NDP government allocated some $21.6 billion to public sector salaries, wages and benefits, or 38.4 percent of the total expenditures of $56.2 billion (government of Alberta 2018). The same budget estimated a deficit of $8.8 billion.[1] With the general distaste in Alberta for budget deficits, coupled with current low energy revenues and the political improbability of introducing a sales tax as a steady and predictable revenue stream, the province is left with few options to reduce the budgetary shortfall and to keep the debt‐GDP ratio from increasing. If revenues cannot be enhanced, then expenditures must be controlled to reduce any budgetary shortfall. The fact that public‐sector earnings comprise such a large expenditure item means that this compensation is an obvious target for any expenditure‐reduction exercise. The fact that so many Albertans have recently lost lucrative employment in the private sector, while the public sector has remained relatively unscathed, has left public sector workers as obvious targets in any cost‐cutting exercise. In short, many Albertans are demanding that they receive value for their tax dollars when it comes to the provision of public services, and with public sector compensation such a large line item in the budget, it is inevitable that this compensation will be scrutinized.

 

[1] The estimated deficit has since decreased to $6.9 billion (Government of Alberta 2019). 

Published
2019-11-22
Section
Communiqués