Abstract
<span style="font-family: Times New Roman; font-size: small;"> </span><p style="margin: 0in 0in 0pt; text-align: center;" class="MsoNormal"><span style="font-size: 26pt;"></span><span style="font-family: Times New Roman; font-size: small;"> </span></p><p style="margin: 0in 0.5in 0pt; text-align: justify;" class="MsoNormal"><span style="font-size: 10pt;"><span style="font-family: Times New Roman;">As the economy continues to recover from the recent recession of 2008-2009, there has been much discussion of the related issues of increases in federal, state, and local budget deficits and debt.<span style="mso-spacerun: yes;"> </span>A major element of that discussion concerns public employee salaries and benefits, including under-funded pension benefits.<span style="mso-spacerun: yes;"> </span>This paper involves the development of a theoretical model for the determination of wages and salaries in the public sector which has implications for these current issues.</span></span></p><p style="margin: 0in 0in 0pt; text-align: center;" class="MsoNormal"><span style="font-family: Times New Roman; font-size: small;"> </span></p><span style="font-family: Times New Roman; font-size: small;"> </span>
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