Public Unions’ Attack on the Middle Class

The non-partisan, non-profit Wisconsin Policy Research Institute has some interesting statistic as to who, exactly, is pressuring the middle class in the Wisconsin battle over public unions:

While private-sector employees are seeing their retirement date pushed further into the future, Wisconsin public employees regularly retire well before their 65th birthday. The WPRI study showed that, for the Wisconsin Retirement System, the rate of retirement was significantly higher for those younger than 65. For example, 24% of 58-year-old men in the Wisconsin Retirement System who were eligible for retirement did retire.

In addition to retiring younger, Wisconsin public employees have richer retirement benefits. The WPRI study compared benefits side-by-side and found that the private-sector worker would need a salary of $70,000 to have retirement benefits comparable to a public employee earning $48,000.

Finally, the study compared how the cost of pensions is shared between employers and employees. The average private employer contributes 5.3% of payroll toward employee pensions. Contrast this with the estimated 11.1% of payroll Wisconsin public employers (taxpayers) are contributing toward employee pensions. Through collective bargaining, public employers have agreed to pick up all but .06% of the cost of employee pensions.

Pensions have become an issue of fairness. While private workers have seen their retirement plans wither away, Wisconsin public employees are retiring earlier, have far better retirement benefits and pay almost nothing for all of it. In this context, we can begin to understand the universally strong feelings that our polling is picking up regarding public employee pensions, to say nothing of the fact that taxpayers are paying for it all.

The “universally strong feelings” their poll found, by the way:

“Some people say that it’s understandable that public employees don’t contribute to their pensions because public-sector salaries are lower than salaries paid in the private sector. Other people say that public employees should contribute to their own pensions like everyone else. Which better describes how you feel?”

• 17% said that it is understandable that public employees don’t contribute to their own pensions
• 76% said that public employees should contribute to their own pensions

Most surprising was that the 76% came from across the board. It seems all of Wisconsin supports a change that would have public employees contribute to their pensions. Conservatives and liberals think they should contribute. Blacks, whites and Hispanics think they should contribute. Even people in union households told us that public employees should contribute to their own pensions.

The burden of supporting these bloated pensions fall on the private sector middle class, who are not in a position to afford it. From Daniel DiSalvo:

The rise of government-worker unionism has also combined with the broader transformation of the American economy to produce a sharp divergence between public- and private-sector employment. In today’s public sector, good pay, generous benefits, and job security make possible a stable middle-class existence for nearly everyone from janitors to jailors. In the private economy, meanwhile, cutthroat competition, increased income inequality, and layoffs squeeze the middle class. This discrepancy indicates how poorly the middle class has fared in recent decades in the private economy, which is home to 80% of American jobs. But it also highlights the increased benefits of government work, and shines a spotlight on the gains public-sector unions have secured for their members [at the tax payers expense, including the middle class -ed.].

This explains New Jersey governor Chris Christie’s comment that, “there has to be parity between what is happening in the real world and what is happening in the public-sector world.” It seems the people in Wisconsin have this fairly well figured out, despite the howls of leftist advocates and vested parties.

See also: The Truth About Public Employee Compensation
The Coming Generational Storm

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