Markkula Center of Applied Ethics

Thinking Ethically About Government Pensions

By Miriam Schulman


From a Utilitarian Perspective: Which option will produce the most good and do the least harm?

The state of California faces a $19.1 billion budget deficit for the coming fiscal year; New Jersey faces a $10.5 billion deficit; and so forth. With shrinking government revenues, what expenditures will help the largest number of citizens? Could funds that currently support pensions be used for services, or will decreases in worker benefits discourage the best employees from entering public service?

From a Rights Perspective: Which option best respects the rights of all who have a stake?

A right is a justified claim on others. Do workers who have negotiated for their pension plans have a justified claim on government coffers to pay for what they have been promised?

From a Fairness Perspective: Which option treats people equally or proportionately?

Some workers in the United States have pension plans; some do not. Is it fair for government workers to expect pensions when many private sector workers do not have such plans? Is it fair for workers to bear the primary burden of bringing down public spending, or should the pain be spread to citizens in the form of diminished services or higher taxes? Are two-tier plans (where new hires are not entitled to the same pensions as current workers) fair when two people doing the same job are compensated differently?

From a Common Good Perspective: Which option best serves the community as a whole, not just some members?

While the budget negotiations are in process, different groups-unions, mental health advocates, park users, seniors, businesses-all advocate for what they see as best for their constituencies. Whose role is it to think about the good of the whole community? Are public servants supposed to represent the interests of the groups that helped elect them (including unions) or the common good? Pension plans have sometimes been a way for city councils to put off paying the cost of salaries and benefits to a future time, when the councilmembers who voted for the pension package, are no longer in office. What is the effect of such deferment on the next generation?

From a Virtue Perspective: Which option leads me to act as the sort of person I want to be?

Are workers who demand their full pensions, even in the face of bankrupting the government, being selfish? How might other stakeholders, such as taxpayers or elected representatives, demonstrate unselfishness?

August 2010


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