WISCONSIN: Average Teachers Receive $56,500 Salary Plus $43,505 in Benefits...Paid by Taxpayers

UNIONS VS. TAXPAYERS: Unionized Public Employees are Addicted to Taxpayer Money Why must taxpayers have to pay for the superlative pensions and health insurances of government employees? Why must taxpayers have to continue paying for their benefits…for the rest of these public employees’ lives? Taxpayers are forced-financiers but are not allowed at the bargaining table. On top of that, the pension plans encourage these public employees to retire in their 50s. Teachers work on average about 200 days per year. No wonder the Wisconsin teachers are protesting and don’t want to relinquish these great benefits. It’s not about rights. It’s about greed and addiction. Why shouldn’t public employees pay for their own pensions and health care? A great WSJ article by University of Arkansas Economics Professor Robert M. Costrell explains how collective bargaining has made possible for public employees’ benefits to cost nearly as much as a worker’s salary. Here is a summary of that article:
SUMMARY
	• TEACHER AVERAGE SALARY = $100,005 The average Milwaukee public-school teacher receives a total package of $100,005: A salary of $56,500 plus $43,505 in benefits. • BENEFITS TOTAL COST = 74.2% OF THEIR SALARY The public pays 74.2 cents to Milwaukee public-school teachers and other employees for retirement and health benefits for every dollar they receive in salary. (In private firms is 24.3 cents) • UNION GREED IS TAKING US INTO BANKRUPTCY Gov. Scott Walker’s proposal would bring public-employee benefits closer in line with those of workers in the private sector. That is why he needs to restrict collective-bargaining privileges.

PENSIONS
	• SOCIAL SECURITY AND MEDICARE The employer cost is 7.65% of wages. (Same as in the private sector.) 7.65% • STATE PENSION With taxpayer money, the district pays the employees’ share as well, for a total of 13%. 13% • TEACHERS’ SUPPLEMENTAL PENSION With taxpayer money, the district contributes an additional 4.2% of teacher salaries to cover this second pension. Teachers contribute nothing. 4.2% • CLASSIFIED PENSION FOR OTHER SCHOOL EMPLOYEES Most other school employees belong to the city’s pension…the district pays the employees’ 5.5% share. 5.5% SUBTOTAL Overall, for teachers and other employees, the district’s contributions for pensions and Social Security total 22.6 cents for each dollar of salary. (In the private industry is 13.4 cents.) 22.6% Minimum

HEALTH INSURANCE
	• HEALTH CARE FOR CURRENT EMPLOYEES The school district pays the entire premium for medical and vision benefits, and over half the cost of dental coverage. The district’s contributions for health insurance of active employees total 38.8% of wages. (For private-sector workers nationwide, the average is 10.7%.) 38.8% • HEALTH INSURANCE FOR RETIREES Because the eligibility rules of their pension plans often induce them to retire in their 50s, and Medicare does not kick in until age 65. Milwaukee’s plan covers the entire premium in effect at retirement, and retirees cover only the growth in premiums after they retire. The school district’s retiree health plan has not been prefunded. It has been pay-as-you-go. Retiree health-insurance contributions are estimated at 12.1% of salaries 12.1% SUBTOTAL Overall, the school district’s contributions to health insurance for employees and retirees total about 50.9 cents on top of every dollar paid in wages. 50.9%

TOTAL BENEFITS
	Together with pension and Social Security contributions, plus a few small items, one can see how the total cost of fringe benefits reaches 74.2%. 74.2%
	The showdown in Wisconsin over fringe benefits for public employees boils down to one number: 74.2. That’s how many cents the public pays Milwaukee public-school teachers and other employees for retirement and health benefits for every dollar they receive in salary. (The corresponding rate for employees of private firms is 24.3 cents.) What these numbers ultimately prove is the excessive power of collective bargaining. Under the pressure of local bargaining, the employees’ contribution is often pushed onto the taxpayers. As the costs of pensions and insurance escalate, the governor’s proposal to restrict collective bargaining to salaries—not benefits—seems entirely reasonable.

It is worth reading the entire WSJ article.

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