Exposing the Big Wisconsin Lie about "subsidized public pensions"

Tax.com’s David Cay Johnston exposes the truth behind Wisconsin governor Scott Walker’s claim that unionized state workers get their pensions “subsidized” by the state, a claim that has been blindly repeated in the press from the AP to Politifact. This is a carefully argued, well-documented essay from a source that is hardly partisan for labor, and bears close reading.

The fact is that all of the money going into these plans belongs to the workers because it is part of the compensation of the state workers. The fact is that the state workers negotiate their total compensation, which they then divvy up between cash wages, paid vacations, health insurance and, yes, pensions. Since the Wisconsin government workers collectively bargained for their compensation, all of the compensation they have bargained for is part of their pay and thus only the workers contribute to the pension plan. This is an indisputable fact…

Among the reports that failed to scrutinize Gov. Walker’ s assertions about state workers’ contributions and thus got it wrong is one by A.G. Sulzberger, the presumed future publisher of The New York Times, who is now a national correspondent. He wrote that the Governor “would raise the amount government workers pay into their pension to 5.8 percent of their pay, from less than 1 percent now.”

Wrong. The workers currently pay 100 percent from their compensation package, but a portion of it is deducted from their paychecks and a portion of it goes directly to the pension plan.

One correct way to describe this is that the governor “wants to further reduce the cash wages that state workers currently take home in their paychecks.” Most state workers already divert 5 percent of their cash wages to the pension plan, an official state website shows.

Really Bad Reporting in Wisconsin: Who ‘Contributes’ to Public Workers’ Pensions

(Thanks, Fipi Lele!)

(Image: Madison Wisconsin Protest, Capitol Square [IMG_2770], a Creative Commons Attribution Share-Alike (2.0) image from ontask’s photostream)