This week the Ohio Business Roundtable issued a report that stated when factoring in wages, benefits, pension and job security, public employees make 43 percent more than private-sector workers.
The Ohio Business Roundtable is “an independent, nonpartisan organization of the chief executive officers of the state’s major business enterprises.” Its stated goal is for business leaders to “have an active and effective role in the formulation and evaluation of public policy.”
The report’s authors, Andrew G. Biggs and Jason Richwine of the American Enterprise Institute, acknowledge that Ohio public workers make less in wages than private-sector employees, by 2.5 percent. But their calculations of public-sector benefits conflict with a survey conducted for the Ohio Public Employees Retirement System by Aon Hewitt, an independent worldwide benefits consulting organization.
The report’s findings also differ from a study completed earlier this year by Rutgers University Professor Jeffrey Keefe. That study, released in February, showed Ohio’s public employees earn about 6 percent less annually than their private-sector counterparts. Keefe told the Akron Beacon Journal that “state and local government employees are not overcompensated.”
In March, the Aon Hewitt Benefit Index report showed that the pension and retiree health insurance benefits earned by Ohio public employees stack up comparatively to the top 15 companies in the state. Ohio PERS’ 3,699 employers combined have the population of employees that would provide a similar comparison.
The results were clear: OPERS pension and retiree health care benefits ranked 8th out of 16 of the private-sector employers surveyed. That’s right in the middle of the pack. If the proposed plan design changes that are being considered by the Ohio General Assembly were included in the survey results, the OPERS ranking would move to 12th place out of the 16 companies.
The authors of the Ohio Business Roundtable report, a fellow and former fellow of the American Enterprise Institute, explained their findings that public employees overall have a greater salary and benefit package:
- Public sector benefits are worth 87.7 percent of salaries, while private-sector benefits are worth just 39.5 percent of salaries.
- Private-sector workers earn 2.5 percent higher wages than public sector workers.
- Public workers have a salary and benefit premium of 31.2 percent over their “comparable” private-sector peers.
- The authors then assigned a 9.3 percent premium to the wage-and-benefit premium for “job security.”
- Public workers earn $1.43 for every dollar that private workers earn.
The authors say that public-employee benefits are worth 87.7 cents for every dollar earned, while private-worker benefits are worth only 39.5 cents for every dollar earned. However, they assign a value of 52.7 cents for every dollar for retirement and savings benefits, to just 6 cents for private-sector workers.
Further, they assign the value of nearly 10 percent for public-sector “job security.” Over the past several years, Ohio’s public employment has decreased based upon numbers being reported from state and local public employers.
It is important to note that Ohio’s public workers do not pay into Social Security. If they held a position in the private sector before public employment, they are subject to the Government Pension Offset or the Windfall Elimination Provision when they retire, which significantly reduce the Social Security benefits of public workers who have worked in the private sector.
The research concluded that “even when Social Security is included, total employer contributions toward retirement benefits in the private sector are just a fraction of those paid to Ohio public employees.” That statement is incorrect.
Using data from the Bureau of Labor Statistics (as did the American Enterprise Institute), research by the National Institute on Retirement Security indicated that large, private-sector employers contribute an average of 14.7 percent of their employees’ wages toward retirement benefits. This amount is strikingly similar to the contribution from public employers for their employees: Ohio public employers contribute 14 percent toward their workers’ retirement in non-law and public safety positions.
Looks to me like the Ohio Business Roundtable report is flawed with poor data and inaccurate conclusions. Furthermore, this report was done by a group of the states major business enterprises who cleary are pro issue 2 (S.B. 5), and once again are trying to villify the states work force for their own greed.
How did they determine ‘comparable peers’? Education? Job description? seniority? What???
It is skewed studies like this that make public employees look like they’re on a gravy train. We are not!! Every time a new budget comes out, our jobs are on the line. I’ve not recieved a raise in 4 years. I pay plenty for my health insurance, and I contribute to my retirement. And I worked for years in the private sector, contributing to Social Security. Not that I’ll see any of that, what with regulations restricting and reducing it due to my OPERS pension.
I have worked hard for what I recieve, which is not a lot, and I’m back in school, getting a Master’s degree, so I can increase my income, either at my current job, or elsewhere. Qualified, educated individuals deserve to be compensated. Period.
The Ohio Business Roundtable’s study is a copy of an earlier Heritage Foundation study. The Economic Policy Institute has responded with an analysis of their assumptions. See http://www.epi.org/page/-/IssueBrief294.pdf. Business and the Republican Party are engaged in a coordinated effort to push their agenda. Similar laws, supported by similar studies, are introduced in many states. This conspiracy is not concerned about my welfare. Do you think that they care about you?
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why does the study cite the value of benefits instead of the actual cost. I suspect because the actual cost is far below the 87%. If facts support your position why distort the numbers. Does anybody know what the cost is in real dollars instead of the studies supposed value 87%?
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OPERS has Board of trustees.. 11
What is shown “Business & Political” backgrounds!
Mission statement of OPERS is for the better of Retirees
Seems OPERS is for Ohio?
Who does OPERS trustees answer too?
Who does appointed representatives work for?
As member why such limited rights and So many rules?
As a member i have a question, why is there contracted services to another state in helping members?
Conducting assessments?
120 day waiting periods if disability is filed?
Wonders, if the Trustees understand the meaning behind NOT receiving income since all the expressions of monies made for retirees and members?
Not allowing a member to use pre medical condition unless they worsen in filing a claim?