Wednesday, July 28, 2010

WSJ: Public Employees Get More Benefits

WSJ: Public Employees Get More Benefits

This is why we are pissed off !


An annual scorecard on benefits shows that public employees continue to have richer benefits than their private-sector counterparts, but squeezed state and local budgets could push governments to start cutting back.

As of March, 88% of state and local government workers had access to employer-sponsored medical plans, compared with 71% of private-sector workers, according to a Labor Department report released Tuesday.

Governments also picked up a larger share of the health-care tab. Public employers paid 89% of the premiums for policies covering individual workers as of March, compared with 80% at private-sector companies.

The more generous benefits given to government workers are part of a larger trade-off, according to economists. Unable to match private-sector salaries for their most valued workers, governments instead offer more-attractive benefits packages.

"It's certainly the case that, for higher-skilled workers, the more generous provision of benefits, especially retirement benefits, is a compensation for lower pay," said Gary Burtless, an economist at the liberal-leaning Brookings Institution, a Washington think tank. "It also is a deterrent to your more senior and older workers from leaving."

Mr. Burtless said that as state and local budget strains continue, governments' relatively generous benefits packages could come under the knife. "Right now, a lot of states and localities are facing extremely severe long-term fiscal problems. One of the big sources…is this employee-benefits package," he said.

When it came to paying premiums for family policies, the government and private sector were more closely aligned: Businesses paid 70% of premiums, while governments paid 73%.

But government workers took advantage of health-care programs available to them more often than private-sector workers. While 83% of public employees tapped into employer medical plans, only 73% of private-sector workers did.

Meanwhile, nine out of 10 government employees had retirement plans available to them, compared with 65% of private-sector workers. And 95% of government workers participated in the provided retirement plans, while 76% in the private sector did .

Governments' richer benefits packages extend to low-wage workers much more often than in the private sector. In the public sector, 69% of workers who earned in the lowest quarter of wages were eligible for medical benefits, compared with just 38% in the private sector.

Low-wage government workers also benefited from employers picking up 89% of the tab for their individual policies, the same share as the highest-paid employees. Private-sector employers paid 77% of the premium for low-wage workers, less than the 82% they chipped in for their highest-paid workers.

Low-wage public-sector workers also had better access to retirement plans: 74% were eligible, compared with 40% in the private sector.

Write to Sara Murray at


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