On the Public Dole

Feb 21, 2007

"Pension Tension," read the front page of Wednesday's USA Today. The story was framed as being about "pension envy," because of the growing gap between retirement benefits available to government vs. private workers. Interesting fact: The US government has a bigger unfunded liability for its own employees' retirement benefits ($4.7 trillion) than it does for Social Security ($4.6 trillion). "Retired government workers are twice as likely to get a pension as their counterparts in the private sector, and the typical benefit is far more generous." To someone with an awareness of the changing workforce, this looks like an inside-out angle. As one source, the head of a public employees union, points out, the real story is not about the generosity of public benefits, but about the decline in private employer retirement benefits. And the real gap is not just between the public and private sector, but between traditional and freelance workers. In fact, a story in the NYT earlier this month pointed out that the federal government itself is using more contractors than ever before, even to fulfill core government functions (including, in one ironic case, oversight of contractor wrongdoing). Part of the reason is of course to save on generous benefits to civil servants. Many local living wage campaigns began with pledges to raise wages for city employees and city contractors. Maybe there's some political leverage to be gotten out of the discrepancy between the retirement benefits governments offer their own employees, vs. the policies those governments advocate for all.