ANOTHER FAUX OUTRAGE: PUBLIC SECTOR PENSIONS

Dean Baker helps us with the facts.

The Public Pension Outrage and Alan Greenspan's Pension
Monday 16 August 2010
by: Dean Baker, t r u t h o u t | Op-Ed

The basic facts are straightforward. Adjusting for education and experience, public sector workers actually get paid slightly less on average than their counterparts in the private sector. It is likely that the lower pay is largely or fully offset by a better benefit package, but it is likely that the difference in benefit packages between public and private sector workers is not as large as it may seem.

First, it is important to realize that public sector workers are far more likely to have a college or advanced degree than the population as a whole. While most workers have little by way of a defined benefit or defined contribution pension, most workers with college or advanced degrees can count on being entitled to at least a modest pension income in retirement.

Second, many public sector workers are not covered by Social Security. This means that whatever they get from a government pension will be the bulk of their retirement income; it will not be a supplement to their Social Security benefits. With this in mind, the $22,000 pension that an average retired public employer received in 2007 hardly seems excessive.