A Benefit Worthy of the Public Sector

April 11, 2010 - Al
Concerns about the fiscal health of state and local governments have been receiving a lot of press. 88% of city finance officers recently surveyed by the National League of Cities indicated their cities are “less able to meet fiscal needs than they had been” (see chart below).
 
The culprit? The recession, for one; but also rising wages and health benefits. Public sector employees are probably aware that an economic downturn tends to fully hit state and local governments after the private sector (think declining property, sales, and income tax revenues).
 
Increasingly, state and local government employees are being asked to pay more towards insurance and pension benefits. The flipside is that their existing benefits do tend to be greater than in the private sector. This article offered some interesting statistics from the Department of Labor:
  • 87 percent of public sector employees were offered medical benefits vs. 71 percent in the private sector.
  • More than 89 percent of public sector employees are covered by employer pension plans vs. only 61 percent in the private sector.
  • Public sector employees earned benefits worth an average of $13.38 an hour compared to $7.98 an hour for private sector employees.
 
All of this underscores the importance of understanding your benefits, and how they fit into your overall financial picture. If you work in the public sector, have your benefits been affected by the recession? If so, how?

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