The Center for State and Local Government Excellence has undertaken a research project on the topic of what role union power has had on benefit levels, wages, and employment. The authors of the brief conclude that that the average annual benefit in 2008 was $23,000 and that while public sector pensions are more generous than those in the private sector, wages for public sector workers are lower than for private sector workers with similar jobs. One of the key findings of the brief is that “The results show that unions have no measurable effect on plan generosity or rate of growth in pension benefits, but do have a quantifiable impact on wage levels and perhaps number of workers.” The authors also note that 52 percent in the public sector have a college degree compared to 35 percent in the private sector and 57 percent in the public sector are female and 42 percent are in the private sphere. Other key findings from the study are as follows:
- Public sector pensions are legislated, not bargained, so the articulateness and acumen of the
- lobbyists may be more important than the number of union members; in contrast, wages are bargained and union strength could have a more direct effect.
- The fact is that average wages in the public sector are lower than those in the private sector, and the ratio of public to private sector wages has declined over time
- On average over the 2001-2008 period, public sector wages were 93 percent of those in the private sector.
- Union strength appears to reduce the relative size of the public workforce. Given the effect on wages, reductions in employment would not be unexpected.
The study’s conclusion notes that more work needs to be done in examining the relationship between pension benefits and the role of unions, as greater understanding and information is needed. You can read the full study here.
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