Regarding their op-ed page, The New York Times seems eager to provide misinformation via Thomas Friedman columns. It’s a fascinating business model. Besides, being lectured by Tom “Suck on This” Friedman completely blows up the irony meter. His latest inane–and factually incorrect–burbling:
Let’s kowtow even more to public service unions so they’ll make even more money than private sector workers, so they’ll give even more money to Democrats who will give them even more generous pensions, so not only California and New York will go bankrupt but every other state too.
Then, of course, there’s the reality (italics mine):
If we adjust for education and experience then we find that public sector workers get paid somewhat less on average than private sector workers. This is partially, but not completely, offset by the higher pensions that upset Brooks [and Friedman] so much.
It is likely the case that many state and local governments did not adequately budget for workers’ pensions, but this is more an issue of failed accounting and incompetent reporting (newspapers are supposed to be covering such issues) than excessive pensions. Brooks highlights an estimate that the amount of the average unfunded pension for all public sector workers is $87,000.
This does not seem particularly large. If we assume an average retirement of 20 years, this comes to $4,350 per worker pension year. Since many public sector workers do not have Social Security this hardly seems an excessive amount on the workers’ part.
For the wonky version (pdf):
A standard earnings equation produced a surprising result: full-time state and local employees are undercompensated by 6%. We observed, however, that public employees work fewer hours, particularly, employees with bachelor’s, master’s, and professional degrees. A re-estimated earnings equation controlling for work hours of full-time employees demonstrates that there remains a significant penalty of 3.7% in total compensation for full-time state and local employees when compared to similar private-sector employees.
Only workers with a high-school education do better in the public sector–and that’s because private sector wages for high-school graduates have collapsed. Regarding the pension issue, municipalities and states decided to cut taxes and hope that the ahistorically high rates of return in the stock market would save them (paging Boston’s Mayor Menino, paging Mayor Menino….). That’s not the workers’ fault, but the fault of elected officials and their constituents.
In short, The New York Times devoted space for someone to make claims that are factually untrue. This is not helping.