YES
Kara Kelley is the president & CEO of the Las Vegas Chamber of Commerce
It is time for us to bring public employee pay in line with the private sector and to reform public employee retirement benefits to create reasonable promises that are fair to public employees, to taxpayers and to future generations.
Earlier this year, the Las Vegas Chamber of Commerce commissioned a series of studies to analyze state and local government employees’ salaries and how they compare to the private and public sectors. The reports also examined the benefits paid to public employees through the Public Employees’ Retirement System (PERS) and the Public Employees’ Benefits Program (PEBP). The reports reveal that Nevada’s public employees’ salaries and benefits are among the most generous in the United States. The findings of these reports include:
On average, a Nevada public sector employee is paid roughly 28 percent more than a private sector employee in a similar job classification. The analysis found that of the 324 occupational classifications for which data were available for public and private sector employees, public employees reported higher wages 81.5 percent of the time.
Nevada’s average public employee pay ranks 8th highest among public sector pay in the 50 states and the District of Columbia. On average, Nevada’s state and local government employees report wages and salaries 12.1 percent higher than their public sector counterpart in other states, and local government employees in Nevada, excluding teachers, make 131 percent of the national average.
The salary comparisons did not take benefits into account. If one considers the amount paid toward employee retirement, then the total compensation is even higher.
The reports also found that the promises that we are making through PERS and PEBP have created an unfunded liability of more than $10 billion and have put our state on an unwise and potentially unsustainable path. In the current biennium alone, more than half a billion in taxpayer dollars has been directed toward the unfunded actuarial accrued liability.
This is an issue of fundamental fairness. Ask yourself; is it fair that public employees are paid more than private sector employees for the same type of work? Is it fair that public employees can retire with full benefits after just 28 years of service no matter what their age?
Read the complete reports at www.lvchamber.com.
NO
Danny L. Thompson is the executive secretary treasurer of the Nevada AFL-CIO.
As our most recent election has shown, Americans embrace the ideals expressed by President-Elect Obama; that hard work by everyday Americans should be rewarded with good pay and benefits. People who have worked hard and played by the rules all their lives should not have to struggle in their “golden years.” Rather than racing to the bottom, Nevada should continue to lead the way in providing adequate retirement security to public employees and more importantly, should work to ensure that all working Nevadans are able to retire with dignity.
The recent downturn in the markets should provide pause to each of us that, 401(k)-type individual savings accounts cannot replace the retirement security provided by a defined benefit pension plan. Far too many Nevadans who recently received their quarterly 401(k) statements know first hand that the collapse of our economy and the associated stock market losses will make it impossible for them to retire when they had planned. Those closest to retirement are particularly burdened, as they have little or no time to wait for the market to rebound.
Retirement experts agree, defined benefit plans are better able to deal with economic downturns than individual retirement accounts for a variety of reasons including the ability to ride out market downturns. Defined benefit plans provide retirement security more efficiently and less expensively than defined contribution plans as documented in recent papers released by the National Institute on Retirement Security and the Center for Retirement Research at Boston College.
Finally, the premise raised in several papers produced by the Las Vegas Chamber is just plain wrong. Traditional pension plans continue to be the norm in the public sector, only two states have switched to primary defined contribution plans in the last 13 years. During the same time period, two states, West Virginia and Nebraska, returned to defined benefit plans after finding that 401(k)-type plans provide inadequate retirement security and were just too expensive for states to operate.
Nevada should continue to plot a steady course. The continued market tumble demands a pension renaissance for all workers in Nevada and throughout the country.
