NYT’s Greenhouse vs. ‘Generous’ Public Worker Compensation

Yesterday New York Times labor reporter Steven Greenhouse (6/16/11) reported on efforts in several states to get public-sector workers to increase contributions to state pension funds–or, to put it more bluntly, to take a pay cut.

Political leaders are claiming this is simply the only thing they can do–and Greenhouse helps them make their case. Right from the start, Greenhouse frames the political shift as “the most definitive sign yet that the era of generous compensation for public-sector employees is ending.” Many studies have shown that public sector compensation isn’t actually all that generous, and such workers might lag slightly behind their private-sector counterparts.

Greenhouse presents the case:

The Pew Center on the States estimates there is a more than $1 trillion funding gap for government workers’ retirement benefits in the 50 states. At the same time, many voters resent that public employee pensions are generally better than their own.

A trillion dollars is a lot of money. But over what period of time? And is that figure correct in the first place? Dean Baker at the Center for Economic and Policy Research wrote a great paper (2/11) explaining the origins of the crisis–which is rooted mostly the housing bubble–and that the estimates of one or two trillion dollars were misleading in at least two ways: Such figures might not fully account for a recovery in stock prices (which would improve the outlook for pension funds, and thus reduce the funding gap), and expressing funding gaps as a dollar figure absent any context is rather useless.

Express the gap as a share of the economy, and things aren’t so alarming. As Baker wrote:

The size of the projected state and local government shortfalls measured as a share of future gross state products appear manageable. The total shortfall for the pension funds is less than 0.2 percent of projected gross state product over the next 30 years for most states. Even in the cases of the states with the largest shortfalls, the gap is less than 0.5 percent of projected state product.

But it’s Greenhouse’s language near the end of the piece that might be the most galling part:

But with tales of six-figure pensions and public employees comfortably retiring in their early 50s, many lawmakers say it is outrageous that some of these workers pay nothing out of pocket toward their pensions.

Six-figure pensions are, as you’d imagine, quite rare. And workers who “pay nothing” for their pensions actually do pay something–they get some of their compensation in the form of a retirement package instead of wages. But these very exceptional cases get a lot of attention, as Dean Baker noted in his critique of Greenhouse’s piece:

The media have been repeating tales circulated by right-wing and business organizations who are attacking public-sector workers and public-sector unions. In fact, the vast majority of public-sector workers do not retiree in their early 50s and do not enjoy especially generous benefits….

If the media had been doing a competent job reporting on this issue, legislators would be hearing tales of 70-year old retirees trying to get by on less than $20,000 a year. (Roughly 30 percent of public sector employees do not get Social Security.)

Journalists are supposed to challenge conventional wisdom and political rhetoric–not reinforce it. McClatchy‘s Kevin Hall wrote an exceptional piece on state pensions on March 6. We’d be having a very different political debate if more reporters were following his lead.

About Peter Hart

Activism Director and and Co-producer of CounterSpinPeter Hart is the activism director at FAIR. He writes for FAIR's magazine Extra! and is also a co-host and producer of FAIR's syndicated radio show CounterSpin. He is the author of The Oh Really? Factor: Unspinning Fox News Channel's Bill O'Reilly (Seven Stories Press, 2003). Hart has been interviewed by a number of media outlets, including NBC Nightly News, Fox News Channel's O'Reilly Factor, the Los Angeles Times, Newsday and the Associated Press. He has also appeared on Showtime and in the movie Outfoxed. Follow Peter on Twitter at @peterfhart.