The Economic Self-Interest of Early-Retiring State Workers
So, faced with a reduction in benefits, about 2,500 state workers are expected to retire. Under the new plan, they’d have to be 59 years old, have 20 years in and then would have to pay $1,700 per year for health benefits (20% of the total health package). Currently, retired state workers pay nothing towards their own health care and they can retire much earlier. Those of us in the private sector know just how tough it must be.
According to the Governor, the intent was to save money (around $120 million overall–$6.1 million this year) by reducing health care expenditures, but others–like state employee unions and some Democrat legislators–think the intent all along was to reduce the state work force by pushing people out who’d want to preserve their benefits. Shucks.
But let me get this straight. Apparently the unions and some Democrats acknowledge that early-retiring state workers, realizing that they will pay more/receive less if they don’t take certain actions by a certain time (retire early to get better benefits), are acting in their own economic best interest. Yet, these same people fail to recognize (apparently) that, golly gee, private sector workers and companies act the same way when faced with onerous taxes and a bloated state government. They decide to either leave Rhode Island or not come in the first place.