Overpaid public workers: the evidence mounts
Several new government studies make it harder for unions to deny the need for reform.

Thousands fill the state capitol protesting Wisconsin Governor Scott Walker's proposal to eliminate collective bargaining rights for public workers on in Madison, WI on Feb. 21, 2011.

Article Highlights

  • Public sector unions' protests that their members are underpaid is baseless

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  • #CBO: Federal retirement package of pensions plus retiree health care was 3.5x more generous than private-sector plans

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  • It will now be that much harder for public-employee unions and their advocates to deny the obvious

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One year ago, Wisconsin Gov. Scott Walker signed legislation increasing the pension and health contributions of public-sector employees and restricting their collective-bargaining power. The governor set off a firestorm that continues today, with a recall effort being waged against him and his allies.

In Ohio, Gov. John Kasich signed similar legislation only to see it repealed in a statewide referendum last November. And nationwide, as governors and legislators seek to rein in labor costs, public-employee unions are protesting that their members are actually underpaid. But a growing body of evidence strongly suggests that their protests have no basis in fact.

When the public pay debate began to simmer two years ago, we were among the few analysts to show that many public employees—federal, state and local, including public school teachers—are paid more than what their skills would merit in the private economy. Our core insight was that public-sector pensions are several times more generous than typical private-sector plans, but this generosity is obscured by accounting assumptions that allow governments to contribute far less to pension plans than private employers must.

The full text of this article is available via subscription to The Wall Street Journal. It will be posted to AEI.org on Monday, April 16th.

Andrew Biggs is a resident scholar at the AEI.  Jason Richwine is a senior policy analyst at the Heritage Foundation.

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About the Author

 

Andrew G.
Biggs
  • Andrew G. Biggs is a resident scholar at the American Enterprise Institute (AEI), where he studies Social Security reform, state and local government pensions, and public sector pay and benefits.

    Before joining AEI, Biggs was the principal deputy commissioner of the Social Security Administration (SSA), where he oversaw SSA’s policy research efforts. In 2005, as an associate director of the White House National Economic Council, he worked on Social Security reform. In 2001, he joined the staff of the President's Commission to Strengthen Social Security. Biggs has been interviewed on radio and television as an expert on retirement issues and on public vs. private sector compensation. He has published widely in academic publications as well as in daily newspapers such as The New York Times, The Wall Street Journal, and The Washington Post. He has also testified before Congress on numerous occasions. In 2013, the Society of Actuaries appointed Biggs co-vice chair of a blue ribbon panel tasked with analyzing the causes of underfunding in public pension plans and how governments can securely fund plans in the future.

    Biggs holds a bachelor’s degree from Queen's University Belfast in Northern Ireland, master’s degrees from Cambridge University and the University of London, and a Ph.D. from the London School of Economics.

  • Phone: 202-862-5841
    Email: andrew.biggs@aei.org
  • Assistant Info

    Name: Kelly Funderburk
    Phone: 202-862-5920
    Email: kelly.funderburk@aei.org

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