The California Public Employees’ Retirement System has a well-deserved rap as a taxpayer drain. So to rehabilitate its image, the pension fund has produced a “study” purporting that public-worker pensions are California’s biggest jobs generator. As if Californians needed more reason to doubt the pension behemoth’s math.
According to the 14-page analysis, “CalPERS benefit payments and investments in California are essential to the state’s economy” (Calpers’s bolded emphasis). For instance, Calpers “supports” 1.5 million jobs in the state. That figure includes every job at a California business in which Calpers invests including the 664 companies in its public equity portfolio like Google, Apple, and Walt Disney. Who knew that the public pension fund was essential to the survival of so many successful California public companies? …
Their crude economic calculation is something to behold. The fund estimates that employer contributions account for 22% of every dollar in pension benefits, which would equate to $2.8 billion for the fiscal year 2011. Calpers then contrives a 2.39 “multiplier” from a “Social Accounting Matrix” to compute that its $12.7 billion in annual retiree payments generated $30.4 billion in economic activity and 113,664 jobs—more than a third of the state’s employment growth that year.
Note: White House economists used a multiplier of a mere 1.5 to arrive at their off-the-wall estimate that the stimulus program would create 3.7 million jobs.