The Pew Center on the States maintains an online news service called Stateline.org, which recently ran an article on the burgeoning plight of state government employees in the current economic downturn.
But with the economy in a doldrums — only three years after states had emerged from the last recession — the hiring and salary freezes and benefit cuts that occurred earlier this decade are making a comeback as states struggle to meet their budgets.
The most galling aspect of this statement is the fact that it contradicts the Pew Center on the State’s own recent research.
From the Pew report:
In the late 1990s and early 2000s, when half the states’ pension plans were fully funded, many states reacted by increasing benefits…Legislatures responded in 1999 and 2000 by shortening vesting periods, increasing the multipliers used in determining benefit amounts, decreasing the age at which employees could receive full retirement benefits and shortening the years of service needed to qualify.
According to the same report, “…public sector employees are far more likely to receive retirement benefits—and the gulf between private and public sectors continues to grow.” Pew found that (1) 90% of government employees have a defined benefit compared versus 20% in the private sector; (2) the median pension in 2005 was $17,640 (public) versus $7,692 (private); and (3) 82% of government employees have a retiree health care benefit compared with only 33% in the private sector.
Moreover, future state and local government employee benefit obligations are a ticking time‐bomb for taxpayers. See previous Cato work on this topic here, here, and here. The Stateline article also says that state government salaries compare unfavorably with the private sector. Cato has already pointed out that this isn’t necessarily the case either (see here).
My own experience in state government led me to conclude that much of it amounts to one big “jobs program.” The truth is the typical state employee faces a relatively shorter work day, more generous benefits, and absurd job protections. I would contend that one of the most dangerous places on the planet is a state employee parking garage at closing time, which in my state is 4:30 pm following a 7 1/2 hour workday.