For Immediate Release: Wednesday, October 5, 2011
Contact: Phoebe Silag or Karen Conner, news@epi.org 202-775-8810

Ohio Business Roundtable study of public compensation is flawed

A recent Ohio Business Roundtable study critiqued a February Economic Policy Institute (EPI) study that found that public sector employees are neither over- nor undercompensated.  In a new paper, Dr. Jeffrey Keefe of Rutgers University, the author of EPI’s paper, explains how the Ohio Business Roundtable study’s analysis is faulty and why its central finding—that Ohio public sector workers are overcompensated by 43%–is wrong.  The study was done for the Ohio Business Roundtable by Andrew G. Biggs of the American Enterprise Institute and Jason Richwine of the Heritage Foundation.

In their study, Biggs and Richwine double count retiree health benefits and inflate the costs of employee pensions, among other errors.  They also create a “job security premium” for public sector workers even though more than 40,000 Ohio public employee jobs have been lost in the last five years.  In addition, Biggs and Richwine use calculations in their study that cannot be replicated.

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