The Oregon PERS website, http://www.oregon.gov/PERS/ contains a report under What’s New, entitled Economic Impact Study (7/8/10). That report states that PERS paid $2.5 billion in benefits to PERS retirees living in Oregon in 2009. The report goes on to say that this $2.5 billion created over 31,000 Oregon jobs. The purpose of the report seems to be to establish the case that PERS is good for everyone in Oregon because it creates economic benefits that would not exist without PERS. But is that really true?
It is true that PERS paid $2.5 billion to PERS retirees in 2009 but that does not mean that the $2.5 billion dollars would not have been spent in Oregon without PERS. All of the PERS contributions are paid from taxes and from other payments people and organizations are required to make to the government. PERS did not magically create $2.5 billion from nothing.
If that $2.5 billion had not been paid to PERS it would have been kept by the taxpayers and other people who paid it to the government. It would have been those people, the ones who originally earned, who would have spent it. But it would have been spent whether or not PERS existed. PERS does not really have an overall positive economic impact on Oregon and it does not create money. It simply redistributes money earned in the private sector to people in the public sector. In doing so, it restricts the ability of the private sector to grow, to create jobs and to really create new money for the State.
In evaluating the economic impact of PERS on Oregon, it should be remembered that the Economic Impact Study was prepared by PERS to create the perception that PERS is good for Oregon and that we are all fortunate to have it. The Study does not address the effect on Oregon’s economy of taking billions of dollars out of the private sector every year. That would probably paint an entirely different picture of PERS. A picture PERS does not want seen.