On Oct. 6, Americans across the country celebrate German-American Day, a day dedicated to honoring the rich cultural heritage and contributions of German-Americans to the United States. While many may associate German-Americans with their delicious cuisine, beautiful music, and strong work ethic, it's essential to recognize their significant role in public service. German-Americans have a long history of serving as public employees, contributing to the U.S. economy, and strengthening our communities. In this blog post, we will explore the importance of this contribution and why it is crucial to protect the pensions of those who serve as public employees.

German-Americans in Public Service

German immigrants have been a part of the American fabric since the nation's founding. Their influence can be seen in various fields, including politics, education, public safety, and public administration. Over the years, many German-Americans have taken positions as public employees, playing pivotal roles in local, state, and federal governments.

1. Political Leadership: German-Americans have made significant contributions to American politics. Prominent figures like Carl Schurz, a Civil War general and U.S. Senator, and Dwight D. Eisenhower, the 34th President of the United States, were of German descent. Their leadership in public service has left a lasting impact on the nation.
2. Public Administration: German-Americans hold key positions in public administration, contributing to the efficient functioning of government institutions. Their strong organizational skills and dedication have helped shape policies, streamline processes, and ensure the smooth operation of government agencies.
3. Education and public safety: German-Americans have made vital contributions to education and public safety. They serve as teachers, police officers, firefighters, and other public-facing services, improving the quality of education and first response services in Texas and nationwide.

Economic Contribution

German-Americans' contributions in public service extend beyond the scope of their roles. Along with other heritage groups, they dedicate years of service to their communities, where they often live and eventually retire. Looking at all public employee heritage backgrounds and their economic impact on retirement spending alone, their presence in America's economy is substantial. The National Institute on Retirement Security, a nonprofit research group, earlier this year released its annual look at how defined-benefit expenditures impact the U.S. economy. The report, Pensionsomics 2023: Measuring the Economic Impact of Defined Benefit Pension Expenditures, found that the national economic impact of retiree spending of public and private sector pension benefits among U.S. pensioners in 2020 generated $1.3 trillion in total economic output. Federal, state, and local governments collectively received nearly $157.7 billion from that spending. And it supported nearly 6.8 million jobs across the U.S.

Here's a look at the Texas level:

1. Stimulating Local Economies: Public employees often live in the communities where they work; the same is true for those who retire and spend their pension benefits. Retirement incomes are invested locally, supporting small businesses and fostering community economic growth. State and local government pension plans in Texas provided pension benefits to 786,862 residents in 2020, totaling $19.1 billion. The average pension benefit was $2,018 monthly or $24,212 annually. The total income to state residents supported by pension expenditures was $9.1 billion. Retirees' expenditures from these benefits supported $27.8 billion in total economic output in Texas and $15.9 billion in value added in the state. State and local pension payments to Texas residents supported $3.1 billion in revenue to federal, state and local governments. Taxes paid by retirees and beneficiaries directly out of pension payments totaled $187.5 million. Taxes attributed to pension expenditures in the local economy accounted for $2.9 billion in tax revenue.
2. Job Creation: Public employees, including those of German descent, contribute to job creation in the Lone Star State. Retiree expenditures stemming from state and local pension plan benefits supported 165,433 jobs in the state. The total income to state residents supported by pension expenditures was $9.1 billion.

And consider this

Texas's pension fund got 22% of its receipts from employer contributions between 1993 and 2020, 17% from employee contributions, and 61% from investment earnings, according to NIRS. It's historically been earned income and employee contributions that make up pension fund receipts—not taxpayer contributions.

You can read NIRS' full state report here.

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