Labor pains.

• Author: Shackford, Scott
• Position: Public employee benefits - Brief article

AS AMERICA'S recession spooled out, Chicago responded to the ensuing budget crunch the way many cities have: by cutting jobs. Between 2003 and 2012, the city eliminated more than 8,000 full-time positions, about 20 percent of its work force. Yet as the work force shrank, personnel costs increased.

According to an August report by the Illinois Policy Institute, a free market think tank, health care costs jumped by 29 percent in fiscal year 2012. Between 2003 and 2011, the city's average annual cost per employee rose from $58,299 to $96,082. The upshot: Chicago is paying around $700 million more annually for 20 percent fewer employees.

The city has blamed the uncontrollable growth on wage and benefit increases...