June 16, 2011
The NYT told readers that many states are planning to increase employee contributions to their pensions. One of the reasons is that legislators are hearing:
“tales of six-figure pensions and public employees comfortably retiring in their early 50s.”
This is true because the media have been repeating tales circulated by right-wing and business organizations who are attacking public sector workers and public sector unions. In fact, the vast majority of public sector workers do not retiree in their early 50s and do not enjoy especially generous benefits.
For example, in New York state, which is featured prominently in this article, the average benefit in 2010 paid by the state’s main pension program was $18,300. Most of the workers who retiree in their early 50s are public safety employees like police and firefighters.
If the media had been doing a competent job reporting on this issue, legislators would be hearing tales of 70-year old retirees trying to get by on less than $20,000 a year. (Roughly 30 percent of public sector employees do not get Social Security.)
The article also includes the bizarre assertion that, “the era of generous compensation for public-sector employees is ending.” In fact, after adjusting for education and experience the compensation for public employees is slightly less than for their private sector counterparts.
This article also cites a Pew Center study that refers to a public pension shortfall of more than $1 trillion. It would have been worth noting that this shortfall is equal to approximately 0.25 percent of projected GDP over the next 30 years (the time horizon for most pensions). It also would have been worth noting this study found that New York state’s pension is 100 percent funded, contrary to the assertion cited in the article by New York Governor Andrew Cuomo that its pension is unsustainable. The article should have corrected Mr. Cuomo on this point.
Comments