On Comparing Compensation

by Nick Charney

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Earlier this week the Fraser Institute published a report entitled "Comparing Government and Private Sector Compensation in Ontario"; they've provided a handy tl;dr in the form of an infographic which pretty much sums up their findings (and their worldview).

When I read the report I was struck by the notion of how easily the data falls into alignment with the dominate (and largely negative) public discourse around the archetype of the 'overcompensated public servant'. According to the report, Public servants in Ontario are better paid, have better pensions, retire sooner, are fired less, and absent more from their jobs than their private sector counterparts. Admittedly, the fact that the data is used to support the archetype is in part due to the ideological leanings of the report's point of origin but the fact that the report's conclusions essentially go untested in the public sphere speaks to something larger.

Despite all our talk about the changing nature of evidence-based policy in a data rich environment when someone actually leans in and slogs through some data (as the Fraser Institute did), we jump right to a conclusion (in this case "how such a premium might be managed and eliminated over time") rather than discuss the findings in the broader context (e.g. Given the premium, what actions, if any, should be taken?). Shouldn't this sort of analysis inform a larger conversation in the public discourse?

Yes, of course we could manage the premium over time, but the higher order question is ought we?

Is public-private compensation parity a net benefit to society?

Why or why not?

If yes, how is this best achieved?

Should we freeze public sector compensation until the private sector can reach parity?

What happens if market forces fail to deliver that outcome?

Ought we also consider implementing wealth creation strategies that will help bring the private sector up rather than drag the public sector down?

What are the expected impacts of these courses of actions?

Why is this line of reasoning – to say nothing of similar lines of inquiry about pensions, retirement, absenteeism and its corollary, presenteeism – largely absent from the public discourse?

I have my own theories, what's yours?