Catch The Whip
PAPER 1
Comparing Public-Versus-Private sector pay and Benefits: Examining Lifetime Compensation
Author: Thom Reilly sagepub.com/journalsPermissions.nav DOI: 10.1177/0091026013505504 ppmsagepubcom ®SAGE
1. Introduction
As states and local governments still struggle to recover and balance their budgets more than five years after the great recession began, much attention has focused nationally on how public workers are compensated, particularly with regard to personnel benefits and the ability of state and local governments to fund them. The soundness of many state and local pension and retiree health care plans is of particular concern. State and local governments are facing considerable pension and retiree health care obligations that have significantly contributed to their financial problems. Nationwide unfunded liabilities for pension and retiree health care range anywhere from $ 1.4 to over $4 trillion, depending upon what assumptions one uses.
2. Variables
This analysis considers three types of workers within two different occupations classifications: (a) a private sector employee with a traditional 401(k) retirement package offering; (b) a public sector employee who has a DB plan with social security income (e.g., Florida model); and (c) a public sector worker with no social security income (e.g., Nevada model). The two sample occupations reviewed as part of this analysis focus on Administrative assistants (BLS, 2012b: SOC code 436014) and engineers (BLS, 2012b: SOC code 170000) to provide alternatives for evaluation purposes.
3. Measurement
To model inflation factors, the analysis utilized the last 20 years of Consumer Price Index (CPI) data aggregated annually to find a geometric mean inflation rate of 2.49%. For the years where there is historical inflation data (2011 and 2012), the historical inflation figure was used for the inflation estimate (Economic Research Federal Reserve Bank of St. Louis, 013). For all employee types, it is
Comparing Public-Versus-Private sector pay and Benefits: Examining Lifetime Compensation
Author: Thom Reilly sagepub.com/journalsPermissions.nav DOI: 10.1177/0091026013505504 ppmsagepubcom ®SAGE
1. Introduction
As states and local governments still struggle to recover and balance their budgets more than five years after the great recession began, much attention has focused nationally on how public workers are compensated, particularly with regard to personnel benefits and the ability of state and local governments to fund them. The soundness of many state and local pension and retiree health care plans is of particular concern. State and local governments are facing considerable pension and retiree health care obligations that have significantly contributed to their financial problems. Nationwide unfunded liabilities for pension and retiree health care range anywhere from $ 1.4 to over $4 trillion, depending upon what assumptions one uses.
2. Variables
This analysis considers three types of workers within two different occupations classifications: (a) a private sector employee with a traditional 401(k) retirement package offering; (b) a public sector employee who has a DB plan with social security income (e.g., Florida model); and (c) a public sector worker with no social security income (e.g., Nevada model). The two sample occupations reviewed as part of this analysis focus on Administrative assistants (BLS, 2012b: SOC code 436014) and engineers (BLS, 2012b: SOC code 170000) to provide alternatives for evaluation purposes.
3. Measurement
To model inflation factors, the analysis utilized the last 20 years of Consumer Price Index (CPI) data aggregated annually to find a geometric mean inflation rate of 2.49%. For the years where there is historical inflation data (2011 and 2012), the historical inflation figure was used for the inflation estimate (Economic Research Federal Reserve Bank of St. Louis, 013). For all employee types, it is