In The Struggle For Public-Sector Workers, Pensions Help

The job market in the United States has been drum tight since the onset of the Covid-19 pandemic. Despite a sharp rise in unemployment during the initial pandemic shutdown, the labor market has recovered over the four years since. Even with the most recent jobs report, the unemployment rate remains at historically low levels, averaging 3.8 percent since January 2023. Additionally, prime-age workers (ages 25-54) are participating in the labor force at strong levels.

This labor market means employers still are competing for employees. Workers, especially those with lower-incomes, have seen their wages rise as a result. But there are other forms of compensation and benefits that employers can leverage to compete for talent. A defined benefit (DB) pension plan has long been a tool used by employers to recruit and retain employees, which has proven particularly effective for public-sector workers like teachers, police officers, firefighters, and sanitation workers.