Cutbacks in public pensions could hurt worker quality, as research shows that pensions help recruit and retain high-quality workers, according to a brief from the Center for Retirement Research at Boston College. One indicator of quality is the wage that a worker can earn in the private sector, and by this measure, states and localities consistently have a “quality gap” – the workers they lose have a higher private-sector wage than those they gain, the center’s research found. The analysis shows that jurisdictions with relatively generous pensions have smaller quality gaps, meaning they can better maintain a high-quality workforce. Thus, the bottom line, according to the brief, is that states and localities should be cautious about scaling pensions back too far.
Thursday, October 30, 2014