November 22nd, 2012, 10:18 am
Posted by Ronald Campbell
Most public workers have pensions. Most private workers do not.
But data analyzed by the Register shows that the prospects for private workers receiving a pension have gotten worse just in the past few years.
That could heat up the battle over public retirement benefits, contributing to what Orange County Employees Association General Manager Nick Berardino calls “pension envy.”
Every March the U.S. Bureau of Labor Statistics interviews nearly 200,000 households nationwide about a slew of topics. Since 1980 one of those topics has been whether workers in the family were participating in a pension plan. We sliced and diced the California data to track the share of private, federal, state and local government workers covered by a pension.
In 1980, when big aerospace firms still dominated the California economy, 37.9 percent of private workers had pension plans. That plunged to 29.2 percent in 1990 as the end of the Cold War reshuffled the state’s economic deck. Private pension plans staged a mild comeback during the ’90s but plateaued about a decade ago.
Then came the Great Recession, pushing pension coverage down once more to 29.9 percent of the private workforce in California last year.
Although public pension coverage has also declined, it has remained more than twice as prevalent as in the private workplace. Current coverage rates in California: 69.4 percent for local, 66.3 percent for state and 76.4 percent for federal government employees.
Actually, the disparity may be much wider than the numbers suggest.
Most government workers enjoy a “defined benefit” pension plan — a guaranteed amount, payable for life.
But most businesses paying pensions have shifted to 401-k’s or other “defined contribution” plans, Chapman University Economics Professor Esmael Adibi said. That means the amount private workers with pensions can expect is subject to the risks of Wall Street.
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