Public employees pay for, earn insurance

Public employees pay for whatever health-insurance arrangement they have in the form of lower take-home pay.

Andrew Cannon photo
Andrew Cannon

The news media need to call out some folks on their claims about public workers’ pay and benefits.

Health insurance is part of compensation for hours worked, skills used and services rendered on the behalf of the employer — in the context of current Iowa political discussion, on behalf of taxpayers who benefit from those hours, skills and services.

Thus, it’s puzzling to see references such as these:

•   A Des Moines Register editorial today cited “growing resentment — envy, perhaps? — among private-sector workers” about some public-sector workers’ benefits, including “free health insurance in some cases.”

•   A KCCI-TV report on the Des Moines Business Record Daily e-newsletter noted one lawmaker opened debate by “calling for public employees to begin paying something for their taxpayer-funded health care plans.” This lawmaker further claimed “it’s not fair for Iowans to foot the bill for the 84 percent of state workers who pay nothing for their benefits.”

I’ll bet no one quoted in such reports can produce one public employee who is receiving free health insurance. Public employees pay for whatever health-insurance arrangement they have in the form of lower take-home pay. Plus, in many cases, there are employee contributions to health insurance, particularly for family coverage, and there are co-pays and deductibles. So let’s take a step back and see what the facts are before spouting off.

As Iowa Policy Project research has shown, public workers’ pay is generally lower than for workers in the private sector with comparable education or skill levels. Where they do make up some of that gap is in negotiated health-insurance benefits. And even then, the total “deal” is likely to be lower than it is for a similar worker in the private sector.

No decision on the current collective bargaining legislation should be made under the mistaken notion that public workers are getting something for free. They have negotiated for it, and they are working for it. And if they’re not paid there, they have a right to negotiate for it in some other way.

Posted by Andrew Cannon, Research Associate

Author: iowapolicypoints

The Iowa Policy Project is a nonprofit, nonpartisan organization that provides research and analysis to engage Iowans in state policy decisions. We focus on tax and busget issues, the Iowa economy, and energy and environmental policy. By providing a foundation of fact-based, objective research and engaging the public in an informed discussion of policy alternatives, IPP advances effective, accountable and fair government.

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