All About Pensions: Public Workers

Tuesday, March 15, 2011

John Fund, columnist for the Wall Street Journal editorial page and author of How the Obama Administration Threatens to Undermine Our Elections and Teresa Ghilarducci, labor economist at The New School and author of When I'm Sixty-Four: The Plot Against Pensions and the Plan to Save Them discuss public worker pensions. 


John Fund and Teresa Ghilarducci

Comments [42]

amalgam from Manhattan by day, NJ by night

What a difference in discourse when an academic is on the show (or any other show). Instead of listening mostly to writers, journalists, etc. - who have some expertise on the issues - it's better to hear scholars with DEEP, lifelong achieved knowledge address their subject of expertise.

Case in point: Fund brags about his recent news piece. Ghilarducci, then retorts that she wrote a scholarly paper, which is a far more intensive and rigorous (i.e., thoughtful) process that typically goes deeper than simply taking a snapshot of current trends and asking the thoughts of the news makers of the day.

Both are incredible occupations that we can't do without, but it is almost always more enlightening to hear true, experts speak on a subject.

Mar. 18 2011 10:18 AM
Nate Bowman

Why was there no call for "shared sacrifice" when the gamblers on Wall Street lost their bet but still received all of their money, but now that the rich want to bust the unions there IS talk of shared sacrifice.

Where is the sharing? It all comes down to Main Street: they bailed out the financiers (who did not lose a penny) and are now asked to do with less (when the top tier's tax breaks were extended).

Mar. 16 2011 12:20 PM
Brad from Columbia Waterfront

Mr. Lehrer, thank you for having Prof. Ghilarducci on your show.

Mar. 15 2011 02:28 PM
Nate Bowman


My comment @ Mar. 15 2011 11:31 AM

the EMPLOYER agree to provide a future pension

Mar. 15 2011 12:12 PM
Nate Bowman

By all means, let's replace defined benefit pensions with 401Ks so that we can put make more funds available to the Wall Street Casino without the recourse that large pension funds provide when the bets go bad..

Mar. 15 2011 12:09 PM
Nate Bowman

So, at a time when 5% of the population controls 56% of the wealth, we are kept busy arguing about how unfair that part of the working class MIGHT be making a little more than another part and whether the contractual obligations to them should be fulfilled.

Great prestidigitation.

Great sense of priorities.

Mar. 15 2011 12:00 PM

I realize John Fund is a known commodity, but I really hate to see academics put up against professional political PR flacks.

The academic was trying to make substantive, fact-based arguments. Fund was trying to spin political talking points.

Too bad: This could have been an informative segment.

Mar. 15 2011 12:00 PM
art525 from Park SLope

I only heard a brief piece of this conversation but it was probably enough. FUnd said that statistcs showed that there was a 69 per cent disparity between pensions for public versus private sectors. He said this in a very matter of fact way. Hard to argue with. Except that when Mz Gilharducci pointed out that there was a difference in education levels between the two sectors Mr fund responded that "I THINK" or "I FEEL" I don't remember which it was. Typical. Toss out statistics or facts and when they are shown to be wrong toss out your feelings. It is the standard MO of the right. They have no interest in getting to the truth of the matter. Facts are only good when they further your argument and are then to be disposed of if they get in the way of that argument. And what is with the title of his book? Please!

Mar. 15 2011 11:54 AM


Here's someone who agrees with you:

"The Liberal State is a mask behind which there is no face; it is a scaffolding behind which there is no building."

-- Benito Mussolini

Mar. 15 2011 11:47 AM
mick from Manhattan

The debate about lower skilled public worker wages vs lower skilled private industry worker wages misses a major point. The wages of public workers are the only cost to the public, the private workers wages must be put together with the profits (realized and hidden for tax purposes) of the private companies to compare the true costs of public vs. private employees doing the same jobs because the cost of contracting out the work would include the profits by the contracting company (not to mention the cost of bribes to win the contract from the politicians and high level administrators, like our wonderful NY state senators and the last few NY State Controllers).

Mar. 15 2011 11:40 AM
LRK from Flushing, NY

Do we really have to be subjected to Mr Fund's agitated propaganda? The sky is not falling and we have choices. We do not need to continue to shift wealth to fewer and fewer people. And, we should resist the reprehensible behavior of scapegoating vulnerable persons.

Mar. 15 2011 11:38 AM
Stephen from JFK Queens

Why is he comparing a teacher with a general worker? Like the woman stated if you compare a teacher with a person on Wall St or a brokerage firm, then this paints a differnt picture. 401K is just a scam for the guys on Wall St. to gamble with our money. My training is in electrical engineering and I have to manage my family retirement via 401K. I should have major in finance so I can manage my 401K.

Mar. 15 2011 11:35 AM
Nate Bowman

Pension benefits are DEFERRED compensation. It is part of the total compensation package agreed to by employer and employee.

As such it is part of what the employer contracted to pay the employee. For lower CURRENT pay, the employee agreed to provide a future pension.

Every "journalist" seems to forget that when the financial industry caused the economic meltdown, there were shouts that the employers were under contract to provide the salary and bonuses. "We are a nation of law. Where would we be if we didn't fulfill our contactual obligations."

So Main Street pays the salary and bonuses of those who caused the calamity and could more easily afford to do without.

And now, Main Street has to pay by giving up their pensions, health care, etc. to help pay for the economic meltdown yet again.

And this time, "journalists" don't talk about how we are a nation of laws. We only seem to be a nation of laws when it benefits the rich.

And no "journalist" points that out. The "journalist" just echoes the unfairness of the "overcompensated" union worker.


Mar. 15 2011 11:31 AM
mick from Manhattan

Global phenomenon, wrenching changes....These are ideological camouflage for class warfare. Germany has much stronger protections for worker and higher median income than the US. But they do not make it easy for companies to move their operations to other countries, much less give tax breaks for doing so, like the US. Fund is just one more person making money by advocating what will benefit the rich by transferring wealth from the middle class.

Mar. 15 2011 11:29 AM
Rosemary from Brooklyn

Mr Fund cites private sector vs public sector pay statistics. Does the "private sector" numbers he quotes include Nurses, Pharmacists, CPAs. Doctors, Lawyers, and other professionals? If not, it is an illegitimate number.

Mar. 15 2011 11:28 AM
Janna from Brooklyn

Did John Fund just LAUGH at her? Wow. You could write a book on the typical reactions of middle-aged white men when they feel their private property/privilege is being threatened.

Mar. 15 2011 11:26 AM
big one

interesting conversation until that little creep started laughing while his debater was trying to answer his question. yuck

Mar. 15 2011 11:26 AM
joe from manhattan

Isn't the discussion on the air ignoring the ruin brought about by mortgage backed securities on pension funds?

Mar. 15 2011 11:26 AM
Mel from about

Wisconsin workers get 8.65 per hr? Thats

Mar. 15 2011 11:25 AM
Longstreet from NYC area

The day is coming my friend. The "mainstream" thinking has led the country into the current problems. Men like me have been proven right in what we've been saying all along. You'll see.

Mar. 15 2011 11:24 AM
Patricia from FH

I have a dear friend who is a public school teacher in Florida with 5 years of experience, she took off 6 years to be with her kids. When she went back to work in the public school system she was treated as a first year teacher once again. She has the outrageous salary of $26,000 year (that's because she didn't take the benefits, she's covered under her husband's health insurance)!

People who complain about teachers' salary should be ashamed of themselves. Teachers' salaries are low, they don't get off at 3PM like many people think. They have papers to grade and parents conferences. Many have to work during their lunch because kids need supervision during lunch as well. So what they get the summer's off - they deserve it for all the hours they have to work during the school year!

Mar. 15 2011 11:22 AM
mick from Manhattan

The defined benefit model is not the problem, it is the lack of investment to fund the pensions that is the problem. New Jersey is a prime example: Since at least the Whitman administration the NJ governors have proposed budgets that do not fund their pension liabilities so that they could cut property taxes while allowing tiny, inefficient municipalities to continue the separate local boards with administrators but no students, 3 member police forces...just so the residents can say they live in a majority white community. (Yes, I say that racism is one cause of the NJ fiscal crisis.)

Mar. 15 2011 11:22 AM
thcatt from Bergen County, NJ

a year before Gov Whitman left NJ's statehouse to serve as W's EPA secretary then Pres Clinton handed Gov Whitman a check for $1 billion as NJ's share of th federal surplus. Did Gov Whitman apply any of that money towards th public employee pensions? honestly, I don't know.

Mar. 15 2011 11:22 AM
gary from queens

Comparable private-sector figures are difficult to calculate, in part because few private-sector employees have government-style defined-benefit plans; some have no pensions at all, while others enjoy 401(k)s, IRAs, profit-sharing, or defined-contribution plans. However, specifically among workers with 401(k) accounts, the latest available data indicate that, on average, employers in 2009 financed 21.9 percent of these employees’ 401(k) contributions, while employees in 2006 covered 78.1 percent of such expenses themselves.

As for health insurance, Walker envisions Wisconsin taxpayers’ slice of the cost of government workers’ premiums dropping from 94.4 percent to 87.4 percent. State employees would pay the 12.6 percent balance, up from 5.6 percent now. According to the Kaiser Family Foundation’s Employer Health Benefits: 2010 Annual Survey, private employers on average paid 70.1 percent of their workers’ health-care premiums, while employees paid 29 percent. (For my spreadsheet with further analysis, please click here.)


Mar. 15 2011 11:21 AM

Someone asked, where is the future growth in America going to come from to finance the future? Well, it is NOT going to come from assembly line manufacturing, for sure. But it is coming from companies like Apple that has created the "need" for a tablet. Or Amazon which did so for an ebook reader. And for the cellphone in the past. Or from Google and Facebook. ANd for the personal computer before that. IOW, growth will come from the IMAGINATIONS and from the ability and freedom of innovative people to create and follow their ideas to fruition, and the creation of new wants and needs most of us cannot imagine, except for the imaginative amongst us. Wealth today will be measured in patents per capita. The liberated brain is the gold mine or oil fields of the 21st century.

Mar. 15 2011 11:21 AM
Brian from Hoboken

They are both right and wrong. Recent government data released in part of a Time Magazine article showed that higher educated public workers tend to equal or lag private sector higher educAted workers depending on the state. Lower educated public workers in every state far out-earned their similar private workers. To me, one of the bigges issues is retirement age. Because these public workers retire so young, many go back into public jobs, work another position for another 10-15 years, retire again at 65, and pull in two pensions.

Mar. 15 2011 11:21 AM
David from Brooklyn

John fund needs to take a breath. And for crying out loud, let others speak.

Mar. 15 2011 11:21 AM
Jack Jackson from Central New Jersey

Why are all the GOP/free market apologists who are posting here ready to hop on the Race to the Bottom strategy?

Public union workers have managed to defend their income streams better than private sector workers so the answer is to lower public sector compensation? BS.

Average income would need to have grown to $100K per year to have the equivalent buying power of a $3/hr worker in 1968.

We (and our government) need to find ways to raise middle class incomes - and that includes a claw back of income from the upper percentiles. Get middle class incomes back on track.

Mar. 15 2011 11:21 AM
Cut pensions for politicians

I think pensions should be eliminated for all politicians. This would have to double impact of reducing future costs and chasing from office people who have outlasted their effectiveness.

Mar. 15 2011 11:20 AM
Phil Henshaw from way uptown

The politically conservative speaker you have on is overlooking that the delivery of government services requires educated people, not uneducated labor. Having more uneducated employees in government is directly where his plan takes us, and increasing incompetence in government. So his rhetoric is utterly cockeyed.

Sure we have a problem, a combination of ever increasing investment in exploiting the earth no longer being so profitable, so all our bets on it never ending are failing. We also have those with lots of money being the last to get the message, and continuing to scoop up ever more of everyone else's wealth in their private piles.

We can't steer our way out of that without consulting people who carefully study how natural systems naturally work by themselves, because it's our culture's lack of attention to how nature really works that is our core problem.

Mar. 15 2011 11:20 AM

stop saying we are broke.
we are not broke we just pass a huge tax cut.

Mar. 15 2011 11:20 AM
Linda from ocean,NJ

We live in NJ. What I don't understand (and maybe I've missed), is what has happened to the money that comes out of every one of my husband's paycheck (a public school principal). What did our governorship do with it? Isn't this stealing? and re: 401Ks. We put money into a 403B, but is the public going to step up and match the amount we put in? Is there no end to this?

Mar. 15 2011 11:18 AM
Mr. Bad from NYC

The "education" gap is a joke, public sector employees are primarily cops, firemen and teachers and these are all "educated" people!?!?

Gimmie a break, a Criminal Justice or Education degree and the laughable "advanced" degree that emanate from those professions are DELIBERATELY dumbed down to accommodate the low level of intellectual talent prevalent in those professions. Ever heard of a Cop or Teacher getting fed up and leaving for medical school or to become an architect? LOL. Criminal Justice and Education degrees are essentially vocational training designed to justify huge salaries for head-breakers and baby sitters.

Mar. 15 2011 11:18 AM
Leah from Brooklyn

@Longstreet: So, wait. The general public is somehow different from public-sector workers? How do you expect that paying public-sector workers less will result in more public services? You've had a bit too much of the Koch brothers' Kool-Aid, my friend. As has John Fund. Yes, dear friends, the bogeyman who has crippled our economy is...the person who teaches your kid algebra? Really?

Mar. 15 2011 11:17 AM
BigGuy from Forest Hills

Private sector workers have lousy defined benefit pensions because private sector unions have been hurt by Republicans.

The problem isn't that public sector unions and their pensions are strong -- it's that private sector unions are weak.

What the WSJ reporter says is cant of the Right and he's WRONG.

Mar. 15 2011 11:17 AM
Mike from Manhattan

To paraphrase Mark Twain, there are liars and damn liars and statistics. Mr. Fund is obviously one of the first two choices, since he is using statistics to hide the truth. The median income would show that the the higher educated public employees make more than the total average income (wages and benefits) and they skew the average income.

Mar. 15 2011 11:16 AM
Brad from Brooklyn

When we look at these numbers can we forget about AVERAGES and look at MEDIAN?

Mar. 15 2011 11:15 AM


Somehow, I don't think you'll be put in charge of anything anytime soon.

Mar. 15 2011 11:15 AM
proud wsj subscriber

Teresa Ghilarducci is clearly biased towards mothers, fathers, and their children. She knows no shame. Obviously she is paid off by these people, and without a doubt enjoys junkets such as dinner parties in neighboring households.

Mar. 15 2011 11:13 AM
Mr. Bad from NYC

Hey Ghilarducci, guess what, the performance of market assets (equities) is predicated on growth, where is the growth in our economy going to come from in this century? In the meantime, while your fantasy doesn't play out the taxpayer has to foot the bill for public employee pensions? Good solution.

Mar. 15 2011 11:12 AM
Mr. Bad from NYC

Hey Ghilarducci, guess what, the performance of market assets (equities) is predicated on growth, where is the growth in our economy going to come from in this century? In the meantime, while your fantasy doesn't play out the taxpayer has to foot the bill for public employee pensions? Good solution.

Mar. 15 2011 11:11 AM
Longstreet from NYC area

The sooner public sector unions realize that there's nowhere to go but down, the better off they'll be. They've extracted as much as possible and that's that. They are already on borrowed time, financially speaking. When the cutbacks in their pensions come, they'll have the comfort of knowing that most of them are still in recession-proof jobs, no matter how well or poorly they perform, and will still have the taxpayers footing the bill for their decades-long retirements. The just won't be as flush as they were expecting to be.
In other words, they're still in fantasy-land in contrast to private sector folks who are expected to handle all of their responsibilities now and be experts at properly accumulating money for their own retirements.
I'd argue that the general public, which sees a never-ending upward spiral in the cost for "services," has been rather lenient to date in breaking up the party. As seen in Wisconsin, the cops are only now starting to bust down the door and bring the festivities to a halt, and not a moment too soon.
All the lefties who hate Gov. Walker ain't seen nothing yet. Wait till someone like me is put in charge.

Mar. 15 2011 09:49 AM

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