mead cohen berger shevtsova garfinkle michta grygiel blankenhorn
Blue Model Blues
The Self-Sabotage of Teachers Unions

What is the biggest obstacle to giving teachers a raise? It’s not, as many Democrats and teachers’ unions suggest, Republican plutocrats looking to cut funding for schools and children. (Per-student spending on K-12 has risen steadily over the last two decades). The real challenge is one of the unions and their political allies’ own making: The debt accumulated by mismanaged public sector pension funds. From a new report issued by Bellwether Education Partners:

Today, states are paying an average of 12 percent of each teacher’s salary just for debt costs. If states didn’t face these large debts, they could afford to give that money back to teachers in the form of higher salaries—an average of $6,801 for every public school teacher in America.

The result is that most teachers are getting the worst of both worlds. Teachers are told they’re accepting lower base salaries in exchange for higher future retirement benefits, but because existing pension plans backload benefits to the end of a teacher’s career, that trade only works well for the small minority of teachers (about one in five) who remain teaching in the same retirement system for 25 or 30 years.

The findings represent a typical example of the way outdated blue model governance all-too-often hurts the people it was designed to protect. State legislatures have over-promised pension benefits, and politicized union-backed investment funds have mismanaged the money they do have. The result is that there aren’t enough funds set aside to cover the pensions guaranteed to retired teachers, so states need to dig deep into younger teachers’ pay to cover them. If pensions had been accounted for accurately and managed competently all along, teachers could be making an average of 15 percent more money today.

Meanwhile, teachers’ unions are resistant to any kind of reform that would change the way teachers save for retirement. This means that teachers’ wages will stay low (discouraging talented young people from entering the profession) to the benefit of those few veteran retired-teachers who can collect generous payouts—at least, until the whole Ponzi scheme goes bust.

Needless to say, the current system does not serve the public interest. States should start transitioning their public employees into defined-contribution, 401(k) style retirement accounts. After all, there is no reason teaching needs to be a lifetime career where educators endure low-salaries for decades, sticking it out so they can get a guaranteed retirement windfall. Switching to individual accounts would help put state budgets back on a path to solvency, raise starting salaries, attract more talented young people into the profession, encourage higher levels of teacher turnover, and ultimately improve outcomes for the people our education is supposed to serve: our children.

Features Icon
Features
show comments
  • Andrew Allison

    “that trade only works well for the small minority of teachers (about one in five) who remain teaching in the same retirement system for 25 or 30 years” seems to suggest that the funding of teacher pensions plans can’t even support roughly 20% of teachers, and that teachers are clueless. At the very least they, and all other public employees (who face the same problem), should be funding their own pensions. Public employee pension plans are little more than Ponzi schemes designed to enrich plan administrators and managers, and current retirees.

    • qet

      Yes! My first thought when I saw this article was, why only 12%? Today’s unionized teachers should be handing over 50% of their salaries to their retired predecessors. That might make them think twice about the benefits of being unionized.

    • Boritz

      “should be funding their own pensions”

      One of Scott Walker’s provisions was to ask teachers to pay 2% of their health insurance premium costs (was zero). The rest is history. Wasn’t acceptable. Not at all. Led to vandalism of the capitol building.

  • Tom

    It should also be noted that a lot of the increased funding going towards public schools isn’t going to teachers–instead, it’s going towards administrative apparati and help for the mentally handicapped.

    • Fifty Ville

      And “diversity” administrators.

  • richb313

    What makes anyone think that a common sense solution will ever be adopted especially when there is so much opportunity in the current system for graft?

  • Fifty Ville

    Teachers’ unions are never for the benefit of the members, just the union bosses. Look how fat they are, especially that whale in Chicago.

  • Forbes

    This is a bait ‘n’ switch distraction: “State legislatures have over-promised pension benefits, and politicized union-backed investment funds have mismanaged the money they do have.”

    It would be more precise to say that the promised pension benefits have been under-funded forever. (If the private sector pulled off what the government has done, CEOs would be in jail.) The foxes (politicians) have been guarding the hen house (funding pensions according to their own rules). And mismanagement is rather a funny way of describing fraud and criminal misappropriation, i.e. Detroit and Illinois pensions have regularly distributed 13 monthly benefit checks for a 12-month year.

    This is laughable: “The result is that there aren’t enough funds set aside to cover the pensions guaranteed to retired teachers, so states need to dig deep into younger teachers’ pay to cover them. If pensions had been accounted for accurately and managed competently all along, teachers could be making an average of 15 percent more money today.” This writer undoubtedly believes in the tooth fairy, and other “what if” fantasies.
    If taxpayers had funded the true cost of the pension all along, teachers would undoubtedly be getting less today, because the true (higher) cost would’ve been recognized as it occurred, rather than deferred by the politicians and their gov’t employee cronies.
    Apparently we’re to weep over the plight of “younger” teachers today, because their unions, in concert with politicians, bankrupted the pension plans. Meanwhile, teacher pay and benefits swamp anything they could get in the private sector–and yet they want taxpayers to bail out their pensions and pay them more money. It would be laughable if it weren’t such a disaster.

    • Tom

      “Meanwhile, teacher pay and benefits swamp anything they could get in the private sector”

      Not really, unless you’re in a VERY well-funded school district.

      • Forbes

        Perhaps you can name some of those districts that are not well-funded. Perhaps you can name private sector employment where ed school graduates would command superior compensation packages.

        • Tom

          The Mississippi, Alabama, and Georgia backcountries, for a start. Urban districts can rake in high property taxes from their wealthier areas. Poorer rural areas don’t have that luxury.
          As to ed school graduates, that’s another story. The quality of education schools is generally horrible. Unfortunately, it’s unlikely to be fixed anytime soon.

          • Forbes

            We can probably agree that there are–as you suggest–places with high property tax hauls that result in teacher compensation packages far in excess of what teachers are paid in the rural South. This is what is called the exception that proves the rule. NYC is certainly a wealthier urban district that has that luxury. Though, by apparent evidence, NYC public school student learning outcomes don’t appear to reflect that luxury. That luxury is captured by the teachers. Cheers.

          • Tom

            On that, sir, we agree.

        • f1b0nacc1

          Most of those ed-school graduates would have a hard time qualifying as organ donors, much less any other useful profession. Time we stop pretending that these time-servers are something special and should be treated as anything other than what they are.

          • Fred

            Apropos of qualifying as organ donors, I had an interesting experience recently. I am a big Jeopardy fan, and I like to play along as I watch. Generally, I get 15-18 out of 30 correct in the Jeopardy round and 16-20 correct in double Jeopardy (I usually do better in double Jeopardy because the Jeopardy round is where they tend to stick categories on pop culture, sports, and Canada, three things about which I know little and care less). I usually get Final Jeopardy about 75% or so of the time. Last week I watched the annual Teacher’s tournament. Throughout the week I got 20-25 of 30 right in both rounds and every Final Jeopardy question. I don’t think my knowledge increased overnight. It was clear to me they were dumbing down the questions for the teachers. Given my experience with education majors, I was hardly shocked, but it is a bit depressing that those folks are teaching our children.

          • f1b0nacc1

            Roughly 75% of all teachers come from the bottom 25% of their graduating classes. You aren’t getting smarter, they really ARE that dumb…

  • seattleoutcast

    Throughout my entire life I have watched unions sacrifice the welfare of younger union members for their own personal gain. Whether private or public, unions are filled with individuals who scheme and contrive to maximize gains in their own pocketbooks. Unfortunately, these institutions, unlike businesses, can stain the economic landscape for generations.

    It was the behavior of unions that turned me away from democrats as a youth.

  • FriendlyGoat

    The real reason teachers are not getting raises is that very, very few workers in similar-income-level jobs of any kind are getting raises.

© The American Interest LLC 2005-2016 About Us Masthead Submissions Advertise Customer Service