Category Archives: Public Sector

Altruism by Job Sector: Can Public Sector Employees Lead the Way in Rebuilding Social Capital?

Source: Jaclyn Schede Piatak, Journal of Public Administration Research and Theory, First published online: April 2, 2014
(subscription required)

From the abstract:
The face of public service continues to evolve as government copes with increasingly complex societal problems and changing means of service delivery. Public managers are now challenged to oversee programs that cut across sectors and organizational boundaries, and people carrying out the government’s work can be found across all sectors—government, nonprofit, and for-profit. Unlike those in previous generations, younger individuals see opportunities to engage in public service in nonprofit and for-profit organizations, which has undoubtedly affected the ability of government agencies to recruit and retain those with public service values. Have opportunities to engage in public service across sectors made differences between public, nonprofit, and for-profit organizations irrelevant? Are public and nonprofit employees any different from those in for-profit organizations, especially when it comes to public service values? Understanding why individuals engage in public service is arguably more important than ever as social capital and civic engagement decline. This article draws upon the “other-oriented” aspect of public service and builds upon the work of Brewer … and Houston … to examine the impact of sector on one area of prosocial behavior: volunteering. This article employs data from the September Volunteer Supplement of the 2011 Current Population Survey to examine how both formal and informal volunteering varies across sectors—public, nonprofit, and for-profit—as well as across levels of government—federal, state, and local. This study finds that government and nonprofit sector employees tend to volunteer more than their for-profit sector counterparts, but there are important nuances when taking work schedule, levels of government, and additional measures of volunteering into account.

Nonfatal Injuries And Illnesses Among State And Local Government Workers

Source: Shannon M. Maloney, U.S. Bureau of Labor Statistics, Spotlight on Statistics, March 2014

The scope of the Survey of Occupational Injuries and Illnesses was expanded with the 2008 survey to cover a more complete section of the U.S. economy: state and local government workers. Prior to the publication of the 2008 survey results, data users commonly requested information about industries in the public sector. Estimates covering nearly 18.5 million state and local government workers show that these public sector employees experienced a higher incidence rate of work-related injuries and illnesses than their private industry counterparts.This Spotlight on Statistics compares characteristics of injury and illness cases in state and local government with those in private industry, highlighting incidence rate trends in selected state and local government industries and examining injury and illness rates and cases that occurred in state and local government workplaces in 2011….

The Use and Abuse of Labor’s Capital

Source: David H. Webber, Boston University School of Law, Public Law Research Paper No. 14-7, February 17, 2014

From the abstract:
The recent financial crisis has jeopardized the retirement savings of 23 million Americans who depend on public pension funds, leading to cuts in benefits, increased employee contributions, job losses, and the rollback of legal rights like collective bargaining. This Article examines ways in which public pension funds harm their own participants and beneficiaries by investing against their economic interests, and the legal implications of these investments. In particular, the Article focuses on the use of public pensions to fund privatization of public employee jobs. Under the ascendant — and flawed — interpretation of the fiduciary duty of loyalty, public pension trustees owe their allegiance to the fund itself, rather than to the fund’s participants and beneficiaries, notwithstanding the fact that the duty of loyalty commands trustees to invest “solely in the interest of the participants and beneficiaries” according to ERISA and similar state pension codes. I argue that this “fund first” view distorts the duty of loyalty and turns the role of trustee on its head, leading to investments that undermine, rather than enhance, the economic interests of public employees. I turn to ERISA, trust law, agency law, and corporate law to argue that public pension trustees should consider the impact of the funds’ investments on the jobs and job security of the funds’ participants and beneficiaries, where relevant. I also adduce evidence that these controversial investments are widespread. I propose that public pension funds be governed by a “member first” view of fiduciary duty focused on the economic interests of public employees in their retirement funds, which go beyond maximizing return to the funds. I argue that this view is more faithful to the original purpose of the duty of loyalty than is the “fund first” view. I suggest ways to implement the “member first” view, discuss potential extensions beyond the jobs impact of investments, and assess the proposed reform’s practical effects.

Walking a Tightrope: Are U.S. State and Local Governments on a Fiscally Sustainable Path?

Source: Bo Zhao and David Coyne, Federal Reserve Bank of Boston, Working Paper No. 13-18, December 2013

From the abstract:
This paper develops a new measure of state and local fiscal sustainability called the “trend gap,” which is based on socioeconomic and other fundamental factors and removes the short-term influence of the business cycle. The paper estimates the trend gap and finds that the nationwide per capita trend gap has been on a growing path over the past three decades, a different conclusion than found in previous studies. Social insurance and income maintenance programs have played a major role in the growth of the trend gap, while pension and other post-employment benefits (OPEB) plans have become increasingly important in driving it up. In addition, there are large and growing disparities in the trend gap across states.

Rebuilding and Re-Engaging a Battered Public Sector Workforce

Source: John M. Palguta Public Manager, Vol. 43 no 1, Spring 2014
(subscription required)

Public sector workers in many jurisdictions have been battered during the past few years by growing workloads, shrinking resources, anti-government rhetoric, and – not surprisingly – declines in employee satisfaction and commitment accompanied by increased turnover of key talent. … Why does it matter? because of the large body of research that consistently shows a strong and positive correlation between employee engagement and organizational performance…..

Supplemental Retirement Plans Offered by City and County Governments

Source: Robert L. Clark, Melinda Sandler Morrill, Matthew Anderson, and Aditi Pathak, Center for State and Local Government Excellence, Issue Brief, February 2014

From the summary:
– Fifteen of the local government employers offer only one type of plan; all 20 local government employers in the study offer at least one 457 savings plan.
– Most plans allow loans.
– Employers match employee contributions in just four plans.
– Employees need more financial literacy and good information about plans to make optimal decisions when they have more choices to make.
– More choices for employees may not be better if the quality of the plans, in terms of fees and investment options, is inferior to the quality of a more restricted access model.

Using Automatic Escalation in Public Sector Retirement Plans to Increase Savings

Source: Paula Sanford, Center for State and Local Government Excellence, Issue Brief, March 2014

From the summary:
This brief looks at how automatic escalation features can help public employees save more for retirement, and the challenges and opportunities state and local governments may encounter as they consider automatic escalation policies.

As states and localities continue to modify their retirement packages, public employees may need to save more to ensure that they have an adequate retirement income.

This is the first study to examine automatic escalation options for public sector retirement plans and supplemental defined contribution plans.

Using interviews, case studies, and a review of academic and practitioner research, the brief offers recommendations on how governments might incorporate an automatic escalation policy into their defined contribution retirement plans, including:
– Ensure that employee groups are part of the process in working with elected and appointed leaders who support an automatic escalation policy.
– Acknowledge that there is no uniform approach to automatic escalation policies. The policy should reflect a government’s unique workforce preferences and policy environment.
– Reduce or eliminate as many barriers to enrollment as possible.
– Communicate with employees about the benefits of the feature when it is adopted.
– Consider implementing it in conjunction with other features, such as automatic enrollment.

The report also includes case studies of successful implementation of automatic escalation in supplemental defined contribution plans for some public employees in Missouri, Ohio, and Virginia.

The Fiscal Health of State Pension Plans: Funding Gap Continues to Grow

Source: Pew Charitable Trusts, Fact Sheet, March 2014

From the summary:
Based on the most recent comprehensive data, the gap between what state and local governments have promised in pension benefits to their workers and the funding to meet those obligations continues to widen. New data for fiscal year 2012 show that state-run retirement systems had a $914 billion shortfall. When promises by local governments were factored in, the total pension debt was over $1 trillion.

Since the financial crisis of 2008, policymakers have increasingly focused attention on the fiscal health of staterun retirement systems. A combination of investment return shortfalls, missed contributions, and unfunded benefit increases had left states with a $452 billion unfunded liability for pensions in fiscal 2008; by 2010 this funding gap had grown to $757 billion.

In spite of recent strong investment returns, the new data show that the funding gap for state plans has continued to grow—increasing by $157 billion from 2010 to 2012. This figure represents 14 percent growth, adjusted for inflation, and is primarily the result of states continuing to acknowledge the investment losses suffered in fiscal 2009. Because most state pension plans smooth out gains and losses over five years, they would not finish absorbing the impact of the market collapse until fiscal 2013. …

Selected Characteristics of Private and Public Sector Workers

Source: Gerald Mayer, Congressional Research Service, CRS Report, R41897, March 21, 2014

An issue for Congress and state and local governments is whether the pay and benefits of public workers are comparable to those of workers in the private sector. In addition, among the ways to reduce budget deficits, policy makers are considering the pay and benefits of public sector employees.

The number of people employed in both the private and public sectors has increased steadily as the U.S. economy has grown. However, after increasing to 19.2% of total employment in 1975, the percentage of all jobs that are in the public sector fell to 15.7% in 1999. In 2013, public sector jobs accounted for 16.0% of total employment.

The recession that officially began in December 2007 and ended in June 2009 affected employment in both the private and public sectors. From 2007 to 2010, the number of jobs in the private sector fell by an estimated 7.9 million, while the number of jobs in the public sector increased by almost 272,000. Conversely, from 2010 to 2013, private sector employment grew by approximately 6.7 million jobs, while public sector employment fell by about 626,000 jobs. Reflecting the effects of the 2007-2009 recession on the budgets of state and local governments, from 2010 to 2013, public sector employment as a share of total employment fell from 17.3% to 16.0%.

Among all full-time and part-time workers ages 16 and over, the number of workers covered by a collective bargaining agreement has fallen in both the private and public sectors. The decline has been greater in the private sector. In 2009, for the first time, a majority of workers who were covered by a collective bargaining agreement were employed in the public sector (8.7 million workers in the public sector, compared to 8.2 million private sector workers). By 2013, the situation had reversed; a slight majority of workers covered by a collective bargaining agreement were employed in the private sector (8.1 million private sector workers, compared to 7.9 million public sector workers). In the federal government, except for the Postal Service and some smaller agencies, employees do not bargain over wages.

Among workers ages 18 to 64 who work full-time, differences in characteristics that may affect the relative pay and benefits of private and public sector workers include the following:
• Age. ….
• Gender. ….
• Education. ….
• Occupation. ….
• Union coverage. ….
• Metropolitan area. ….