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Originally Posted by filtherton
Do you think that the compensation received by union members wasn't going into the economy at all? I'm pretty sure that pension funds are invested prior to being paid out.
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The economy benefits on both sides of public sector pension funds.
Not only are the funds invested in the national economy on the front end, there is also a huge local pay-off on the back end - when retirees spend their pension funds....spending those funds primarily in their community and state.
In Wisconsin:
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$3.2 billion in direct economic impacts were supported by retirees’ expenditures on goods and services from businesses in the state. An additional $625.2 million in indirect economic impact resulted when these businesses purchased additional goods and services, generating additional income in the local economy. $677.6 million in induced impacts occurred when employees hired by businesses as a result of the direct and indirect impacts made expenditures, supporting even more additional income.
Each $1 in taxpayer contributions to Wisconsin’s state and local pension plans supported $7.47 in total output in the state. This reflects the fact that taxpayer contributions are a minor source of financing for retirement benefits - investment earnings and employee contributions finance the lion’s share.
Pension benefits received by retirees are spent in the local community. This spending ripples through the economy, as one person’s spending becomes another person’s income, creating a multiplier effect.
Each $1 in state and local pension benefits paid to Wisconsin residents ultimately supported $1.33 in total output in the state. This “multiplier” incorporates the direct, indirect, and induced impacts of retiree spending, as it ripples through the state economy.
Expenditures stemming from state and local pensions supported:
• 33,324 jobs that paid $1.7 billion in wages and salaries
• $4.5 billion in total economic output
• $732.6 million in federal, state, and local tax revenues
… in the state of Wisconsin.
http://www.nirsonline.org/storage/ni...ctsheet_WI.pdf
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Take away their pensions....and you take away the positive economic impact. The result? Jobs in the state are lost, tax revenues decline...