[quote=harvey][quote=SK in CV]One thing that hasn’t been mentioned anywhere that I noticed, is that many (most?) public employees aren’t covered by Social Security. I know SD cops aren’t. So when we’re comparing that $50K a year pension or $100K a year pension, compared to a private industry employee 401K, an adjustment of $15 to $20K a year for social securty has to be made. [/quote]
It has already been mentioned, as stated above.
Plus SS doesn’t start until 65 (or 67 for many) – a difference of up to 17 years after some public-sector pensions.
What really hasn’t been mentioned here is your answer to the core question: Why should the pubic-sector be paid in a drastically different form than the private sector?
Thus far, we’ve only heard implied arguments based on small technicalities, e.g “cops don’t get social security”, “pensions and 401Ks are really the same because they are ‘deferred'”
Can you provide an answer to the question above – an answer that actually addresses the issue?[/quote]
That’s because the difference between public and private sector pay is not “drastically” different.
….
“But according to a new study published by the Center for State & Local Government Excellence and the National Institute on Retirement Security, these aggregate compensation comparisons are misleading. The authors, University of Wisconsin-Milwaukee economics professors Keith A. Bender and John S. Heywood, assert that state and local government workers are better educated and have more work experience, on average, than do private sector workers, so it is natural that their overall average compensation would be higher. “Thus,” they conclude, “the fact that public sector workers receive greater average compensation than private sector workers should be no more surprising than the fact that those with more skills and education earn more.”
Furthermore, after attempting to control for such variables, they find that state and local government workers actually earn less than their private sector counterparts. According to the analysis, state government workers earn an average of 11.4 percent less than private-sector workers of similar education and work experience and local government workers earn 12.0 percent less. Due to the greater benefits received by public sector workers, the gap narrows when these benefits are factored in, to 6.8 percent and 7.4 percent, respectively. (Even this appears to underestimate the cost of the benefits provided government workers, as discussed below.)
The Difficulty of Compensation Comparisons
As the report notes, it is difficult to do a real “apples-to-apples” comparison of public and private sector compensation because public sector job descriptions and duties may be very different from those in the private sector, and vice versa, so oftentimes there are no good positions to compare to in the other sector.”
One more thing…you keep talking about a retirement age of 50 years, but the vast majority of public employees don’t get to retire at 50. Most non-emergency personnel retire in their 60s, and many emergency/public safety employees can’t retire until 55.
“Average pension is small. No one is getting rich on pensions. Some 25,000 CalPERS members retire each year. The average age at retirement for the largest segment of workers is 60, with 19.5 years of service, and a benefit allowance of $1,673.82 a month. The average CHP employee retires at age 55, with 27.9 years of service, and receives an allowance of $3,811.27 a month.”
Also:
“The majority of State cost increases are due to market downturn, not to increased benefits. Nearly 80 percent of increases in employer rates between 2002-04 are due to the two-year downturn in the economy. And as a percent of payroll, the State pays less per employee than it did 25 years ago for school employees, state miscellaneous employees, state industrial workers, state safety workers and state peace officer and firefighters.1”
