Overpaid Public Workers: The Evidence Mounts

By Andrew Biggs and Jason Richwine, The Wall Street Journal

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 John Kasich signed similar legislation only to see it repealed in a statewide referendum last November.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.

http://online.wsj.com/article

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