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Workers in public sector and private sector both lose this race

March 11, 2011 - Mike Maneval
With legislation in Wisconsin assailing collective bargaining rights for the public sector passing, economist Robert Hiltonsmith, working with a joint project of the Economic Policy Institute, Demos and The Century Foundation, is predicting at the American Prospect's website that pensions altogether will be found in the GOP's crosshairs.

Hiltonsmith starts with Kansas, where the legislature is considering switching future public-sector employees to 401(k) plans, and says six other states already have adopted similar proposals.

The change, Hiltonsmith says, won't avert any expenditures or save the states any money. It likely will, however, bleed from workers a quarter of their retirement savings in financial fees and other charges, and place retirement savings at greater risk to market conditions.

And Hiltonsmith closes his commentary with an appropriately contemptuous riposte to an argument commonly heard as of late as public-sector workers come under fire, the argument that the pursuit of parity with the private sector demands cuts to compensation for teaching and guarding prisons.

"Why should the misfortune of private-sector workers driven into risky, inefficient 401(k)-type retirement savings plans be extended to public employees, just for the sake of parity?" Hiltonsmith asks. "The point should be to improve retirement for all instead of competing in a race to the bottom."

 
 

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