The Louisiana Budget Project is out with a short report attempting to show the economic benefit of pensions. The figures are big, but the logical leaps are bigger:
Altogether, Louisiana's 13 pension systems pay out more than $3 billion in benefits to 150,000 retirees and their families every year--an amount equivalent to 1.7 percent of all personal income in the state. These dollars don't just sit in savings accounts, but are spent and pumped back into the local economies, where they pack a big economic impact, supporting everything from car dealers and restaurants to grocers and hospitals.
The Louisiana Budget Project uses the total size of the payments as justification that pensions shouldn't be reformed, but size shouldn't be the end-all argument. We would never apply that same logic to other industries with similar economic contributions. As the report documents, pensions contribute about the same amount to the Louisiana economy as salaries in the chemical manufacturing and restaurant and food industries. Would it be acceptable to argue that we shouldn't regulate chemical manufacturers because they're so large? What about the working conditions or cleanliness at restaurants? Economic benefits are important to consider, but they're not a sufficient reason to halt policy discussions that weigh the trade-offs comparing the status quo with other alternatives.
Most importantly, touting the size of pension systems as a reason not to change is oblivious to other alternatives. Louisiana public-sector workers generally don't receive Social Security, but that was a choice the state made long ago. If they had been in Social Security, the Louisiana Budget Project could have created a nearly identical analysis showing how much Social Security contributed to the local economy. This wouldn't show anything about the effectiveness of the program or other alternatives, but it would be a large number!
Louisiana is not alone in making these types of nonsense economic arguments. See here, here, or here. But we need to get past these discussions of size and start talking about the most effective ways to ensure retirement security for all public sector workers.