Better benefits

The problem with teachers’ pensions isn’t just the underfunding, argue Chad Aldeman and Andrew Rotherham in Better Benefits: Reforming Teacher Pensions for a Changing Work Force (pdf) . 

 The way the plans are structured can negatively influence the teaching work force as a whole. At a time when improving the quality of classroom instruction is a national priority, key structural elements in teacher retirement plans impair the ability of schools to recruit, hire, retain, and compensate high-quality teachers and principals.

The report outlines ways to redesign pensions to match the needs of today’s teacher workforce.

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  1. All public sector workers, including teachers, should not have “pensions” paid for by the public as they are currently structured. Their options for retirement income should be those similar to what workers in the private sector have available to them.

  2. Michael E. Lopez says:

    The lack of benefit portability is a tremendous drain on the human capital markets in this country: government workers have every incentive in the world to stay where they are and accrue their institutional benefits.

    It seemns like we’re caught in the nether region between feudal vassalage, where someone pledges themselves to a person or institution for life in return for being cared for, and freelance capitalism, where every man is a free agent and essentially an at-will employee. While most of the country is working freelance, the public sector is stuck in the 1400’s.

    Vassalage has its benefits — and I’m actually a bit of a fan in certain respects — but economic efficiency isn’t one of them. And when the public sector is funded not by its own efforts, but by the taxpayers as a whole (who are not part of the vassalage system) there’s a problem.

  3. I would also say that public sector unions and employee public involvement in partisan politics should be illegal; due to the fundamental confict of interest.

  4. If employers had to abide by “(t)his note is legal tender for all debts, public and private”, paid employees in cash, and left to employees the allocation of their total compensation between health plans, retirement plans, and other uses, taxpayers would not be on the hook for public sector and unionized private sector benefit plans.

    Governments at all levels have made more promises than they can keep, to…: current public sector employees, retrired public sector employees, current private sector employees (Social Security, Medicare), retired private sector employees (the same) welfare recipients (Medicaid), unionized private sector workers (pension guarantees), and holders of US debt. When you’ve made more promises than you can keep, you will inevitably break some of those promises. The US will default. We’re in for a rough twenty years while we sort out just who gets screwed.

  5. Huh? I’m a teacher so I can’t vote?

  6. It should have read, “The problem with benefits is they will cost too much when our corporate buddies take over, and will hurt our profits”

  7. Michael E. Lopez says:

    Actually, the idea that government employees shouldn’t get to vote in the elections for the level of government in which they are employed is one that has merit — at least enough merit to warrant serious consideration.

  8. I spoke of PUBLIC partisan politics; we have secret ballots. On the other hand, campaigning for a candidate or an issue is public activity.

  9. Um, no, it has no merit at all and warrants no serious consideration. Good heavens. You want to strip public employees of their democratic rights? Many people have a conflict of interest in elections. That’s the POINT.

  10. (Mike): “It should have read, ‘The problem with benefits is they will cost too much when our corporate buddies take over, and will hurt our profits’.”

    Local governments, State governments, and the federal government are corporations. “Profit” is a bookkeeping term: the difference between total revenues and total costs. An organization which has no line in its balance sheet for “profit” must attribute all revenues to costs. Competitive, profit-driven markets generally yield better quality at lower cost than a State-monopoly enterprise.

  11. Mom of Four,

    Do you think corporations should be able to spend unlimited sums to promote certain candidates?

  12. Michael E. Lopez says:

    Lightly Seasoned,

    There is a difference between “conflict of interest” on the one hand, and “self-dealing” on the other.

    We pay attention to supposed conflicts of interest in order to prevent self-dealing.

    Voting on whether your neighbor should continue to pay your salary goes well beyond conflicts of interest and is squarely in the realm of self-dealing.

    The same could be said for people receiving payments from one level of government or another (e.g., welfare, unemployment, farm subsidies, etc.).

    And the right to vote is just that: a democratic right. A right granted by the state. There’s no natural right to vote, because there’s no natural government. It doesn’t strike me as particularly problematic to suspend people’s rights to vote in situations which warrant it: felons come to mind immediately, and expatriates, and non-citizens. We don’t let children vote. Wherefor there “democratic rights”?

    There are some very relevant reasons for us, in the interest of keeping government of a manageable size for instance, to consider limiting the franchise rights of government employees. They may or may not be compelling reasons, but to say that they have “no merit” and warrant no consideration at all suggests a dogmatic, quasi-religious level of political sophistication that one would hope one tries to eliminate in one’s students.

  13. Michael E. Lopez says:

    Gah. I made the classic there/their mistake. Bad on me.

  14. SuperSub says:

    For those arguing against a teacher’s right to vote… it wouldn’t be an issue if didn’t have a political system that encourages incumbancy. Elected officials commonly trade in their responsibilites as a representative of the public in order to gain favor from political donors (individual, corporate, and public) and from single-minded voting blocs.
    If the teacher pay and retirement system were reformed, the elected officials would simply find another group to pay off.
    There are a couple of options –
    1) End directed political donations. Instead, have public fund that equally donates to all candidates in an election… and restrict hit and run third party election ads.
    2) End incumbancy. Place reasonable term limits on every office… say something ranging from 8-12 years.
    3) End the established authority of political parties. As long as there are elections and politics, there will be parties. But right now the two major parties game the rules and procedure so that almost no elected official can make it unless they are vetted by one of the two parties.

    Quite frankly, if we want to have the political system that our founders intended, we need to carry out all of those reforms (plus some others probably). Teacher retirements and everything else will work themselves out afterwards.

  15. Michael E. Lopez says:

    At the risk of getting off topic…

    SuperSub’s suggestions are interesting. I’d like to address a counterargument that could be raised to them. One might think that term limits are expressly NOT what the founders had in mind, because they didn’t put any term limits into the Constitution.

    But they also probably weren’t thinking about two very important things: extended life expectancy and the increases in technology which make it possible for government to *do* so much more each year. With travel times and communication lines and life expectancy, there was only so much that a congressman in the 1790’s would be able to get accomplished in his or her political life. Laws had to be written out by hand — preventing, say, 2000 page regulatory schemes and the near-instantaneous horse-trading and editing that comes with them.

    In light of those factors, the sorts of things that SuperSub might actually be necessary to “have the political system that our founders intended.”

  16. SuperSub says:

    Regarding the term limits, I’d actually say that they are least important of the three suggestions I made (but as you noted, times have changed making them seemingly needed). Ultimately, the goal is to prevent the near-universal pattern of incumbancy that is promoted primarily through the political party system.
    With a few exceptions, its not the near lifelong politicians that drive the agenda but the parties and their associated special interests that limit the public’s choices during elections and control the law-making process.
    Multiple founding fathers warned against the influence of political parties and the dangers of political stagnance, which we are experiencing today. Putting all candidates on a level playing field should provide a more dynamic government that is more interested in the benefit of the group that elected them.

  17. And so, what does this system of preventing self-dealing look like, Michael. I’m having trouble following your argument to its logical outcome.

  18. (Seasoned): “…(W)hat does this system of preventing self-dealing look like…”

    No system entirely eliminates fraud and interpersonal violence. The most effective accountability mechanism that human have yet devised is a legal regime which gives to unhappy customers the power to take their business elsewhere.

    Eduardo Zambrano
    “Formal Models of Authority: Introduction and Political Economy Applications”
    __Rationality and Society__, May 1999; 11: 115 – 138.

    “Aside from the important issue of how it is that a ruler may economize on communication, contracting and coercion costs, this leads to an interpretation of the state that cannot be contractarian in nature: citizens would not empower a ruler to solve collective action problems in any of the models discussed, for the ruler would always be redundant and costly. The results support a view of the state that is eminently predatory, (the ? MK.) case in which whether the collective actions problems are solved by the state or not depends on upon whether this is consistent with the objectives and opportunities of those with the (natural) monopoly of violence in society. This conclusion is also reached in a model of a predatory state by Moselle and Polak (1997). How the theory of economic policy changes in light of this interpretation is an important question left for further work.”

  19. Malcolm, you mentioned a legal regime which gives to unhappy cumtomers the power to take their business elsewhere. Voluntarism (free market anarchism) is that legal regime. Voluntarism or authoritianism. That’s the choice we have. Unfortunately, most will choose authoritianism because they can’t imagine a society without rulers and subjects.

    Have you ever read “Anarchism as Constitutionalism” by Roderick T. Long or been on John Hasnas’ website and read some of his articles (such as “What’s Wrong With A Little Tort Reform” or “The Myth of the Rule of Law”? Very enlightening reading with some examples of what a stateless society could be like.

    I’m not saying that voluntarism is perfect, but it sure has more promise than authoritarianism in creating and maintaining a peaceful and just society.

  20. Michael E. Lopez says:

    Lightly Seasoned,

    I was just considering — not advocating, but considering — that if you worked for the federal government, you might not be allowed to vote in federal elections. If you worked in county government, you wouldn’t be able to vote in county elections. Likewise for state and municipal workers.

    The idea would be that once you commit to being a funded part of the governmental framework, you’re a public servant and no longer part of the public that you serve. If and when you finish your life on the public payroll, you can once again assume control of the machinery of which you were formerly a part.

    The biggest problem that I see with such a proposal isn’t the actual disenfranchisement, which as I said I think fits fairly well in with our other rules about who gets to vote, but rather the fact that — even counting the military — this would absolutely gut the Democrat party. As a general rule, I’m not in favor of legislative termination orders for political parties.

  21. Actually, the problem I see with it (apart from being lumped in with children and felons, which is just kinda funny) is that financial benefits flow from legislation to groups other than public employees. We’re just the most obvious. If you follow the logic, contractors who work on public projects would also need to abstain from voting, as would employees of companies who do business with the government, who arguably collect far more in public funds than I ever will. A good friend who works on a project for NASA earns at least six times what I do, every penny from a government contract with the private enterprise that employs her.

    I’m wondering who I really work for under this scenario since school funding flows from local, state and federal sources. I guess teachers just get the disenfranchisement hat trick.

    But yes, I freely admit that the idea of any sort of wholesale disenfrancisement gives me the heebie jeebies.

  22. Michael E. Lopez says:

    Well… *theoretically* at least, your friend (or his employer) had to bid for that contract. He or she might vote for a project or contract to be funded, but he can’t really vote to have it assigned to a particular person.


  23. (Steven): “Voluntarism or authoritianism. That’s the choice we have. Unfortunately, most will choose authoritianism because they can’t imagine a society without rulers and subjects.”

    I see a multi-dimensional continuum, not a dichotomy. Each of us occupies a world that his/her choices influences only marginally. While politicians exert more influence than most, even they find their choices constrained.

    I recommend:…
    Randall G. Holcombe
    Government: Unnecessary but Inevitable
    __The Independent Review__ Volume 8 Number 3 Winter 2004

    which agrees pretty much with Zambrano’s “Formal Models of Authority”.

    Dunno what it means to “imagine a society without rulers and subjects”. I can imagine a world in which we commute on flying carpets, but I don’t expect to see it.

    Sometimes politicians will respond to reasoned arguments. More often, citizens will better advance their own interests by working around the inept State. A homeschooling parent will achieve more for her child through attention to her own children than through the cultivation of politicians.

  24. Let’s just cut out the rhetoric. What everyone who isn’t a teacher wants to do is have all the teachers locked up in public stocks and flogged, and when they’re not in stocks, they obviously need to be relegated to tar-paper shacks.

    Make all of you happy now?

  25. Michael E. Lopez says:


    I certainly hope that’s not what they want to do to us. Stocks are notoriously bad on my complexion.


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