Study: Public teachers are paid well

Public school teachers are paid as well as similarly skilled private-sector workers but receive much better fringe benefits, concludes a study by Andrew G. Biggs, a resident scholar at the American Enterprise Institute and Jason Richwine, a Heritage Foundation policy analyst.

Public-school teachers earn less than non-teachers with the same level of education, but “teacher skills generally lag behind those of other workers with similar ‘paper’ qualifications,” they write.

Workers who switch from non-teaching jobs to teaching jobs receive a wage increase of roughly 9 percent. Teachers who change to non-teaching jobs, on the other hand, see their wages decrease by roughly 3 percent. This is the opposite of what one would expect if teachers were underpaid.

Public-school teachers contribute less than private-sector workers for generous pensions and retiree health coverage.

Factoring in the value of more generous fringe benefits and greater job security, public teachers receive compensation 52 percent greater than market levels, equivalent to more than $120 billion a year, Biggs and Richwine conclude.

Update:  Here’s more on the study, plus a reaction from American Federation of Teachers President Randi Weingarten, who charged the AEI report “uses misleading statistics and questionable research.”

“If teachers are so overpaid, then why aren’t more ’1 percenters’ banging down the doors to enter the teaching profession?” Weingarten asked in the release, referring to higher-income Americans. “Why do 50 percent of teachers leave the profession within three to five years, an attrition rate that costs our school districts $7 billion annually?”

 If teachers earn the same as comparable private-sector workers but eventually qualify for a better pension (and job security tied to seniority), a high attrition rate among new teachers isn’t surprising:  New teachers often get the toughest assignments and the fewest perks.

Fixing teacher pensions

Teachers’ pensions are underfunded by an estimated $700 billion. How can we solve the teacher pension crisis?  On Education Next, Robert Costrell of the University of Arkansas and Mike Podgursky of the University of Missouri discuss options with Christian Weller of the University of Massachusetts-Boston.

 

When reform touches teachers

When reform touches teachers features a civil discussion — no talk of crypto-fascists clubbing baby harp seals — between Randi Weingarten, president of the American Federation of Teachers, and Frederick M. Hess, education policy director at the American Enterprise Institute. Fordham’s Michael Petrilli moderates.

Yesterday’s discussion was earth-shaking, writes Hess in Ed Week.

We agreed on the failure of principals to do their job when it comes to teacher evaluation, the need to overhaul today’s industrial era model of schooling, the limits of trying to drive evaluation primarily off of today’s crude value-added scores on state reading and math assessments, and the value of engaging teachers in decisions regarding instruction and content (though Randi thinks it’d be a good idea to do that via collective bargaining and I couldn’t disagree more).

Randi argued teachers feel like they’re under attack. As I argued in the New York Times this spring, it’s perfectly reasonable for teachers to feel angry that policymakers are looking to dial back their pensions and health care entitlements. But that doesn’t amount to disrespect or an “attack.”

GOP leaders who’ve “pushed to dial back benefits and collective bargaining” have used “respectful language,” Hess writes. Union advocates “have compared them to Nazis.” Gov. Scott Walker was equated with Hitler and Mubarak.

Benefits vs. jobs

Wisconsin’s controversial law limiting public employees’ bargaining power will enable a district to hire more teachers to cut class sizes, reports the Appleton Post Crescent.

As changes to collective bargaining powers for public workers take effect today, the Kaukauna Area School District is poised to swing from a projected $400,000 budget shortfall next year to a $1.5 million surplus due to health care and retirement savings.

The Kaukauna School Board approved changes Monday to its employee handbook that require staff to cover 12.6 percent of their health insurance and to contribute 5.8 percent of their wages to the state’s pension system, in accordance with the new collective bargaining law, commonly known as Act 10.

Increased staffing also will make it possible to “identify and support students needing individual assistance through individual and small group experiences,” said the school board president.

Teachers will have less take-home pay, but more teachers will have jobs.

Via Ann Althouse.

Milwaukee Public Schools is laying off 354 teachers. In all, 519 staffers will be laid off and 500 vacancies will not be filled. Class sizes will increase and old textbooks won’t be replaced. If the union agrees to contribute 5.8 percent of wages to retirement benefits, the district can save 198 teachers’ jobs.

Retired teachers outearn working teachers

California’s retired teachers collect $51,072 a year in pension payments, reports Intercepts. That’s more than the average working teacher earns in 28 states, according to NEA data.

California’s working teachers average $64, 156 a year. Their retirement system needs 20 percent annual returns to fund all pensions, unless benefits are cut or revenue is increased.

Merit pay fizzles in Big Apple

New York City’s merit pay plan for teachers didn’t improve student achievement, concludes a new study by Harvard economist Roland Fryer, who compared merit-pay schools to schools that didn’t participate. But few merit-pay schools allocated the bonus money based on performance. More than 80 percent split the extra money equally among all or nearly all the teachers, writes Stephen Sawchuk on Teacher Beat.

 The program didn’t raise test scores at all and may have slightly depressed middle school scores in the participating schools. The impact of the incentives on student attendance, behavior, course grades, regents test scores, and high school graduation were negligible, Fryer writes. And it did not seem to affect teacher behavior either, as measured by retention rates in the school or the district; absenteeism; or teacher perception of the learning environment.

Fryer speculates the incentive scheme was “too ambiguous in its goals and complex in its means” to change teachers’ behavior.

New York City spent $75 million over three years on the bonuses. But it will cost taxpayers much more, notes Teacher Beat, because the district paid off the union to agree to the experiment.  For a minimal payment, teachers were allowed to retire with full benefits five years earlier.  “Performance pay is temporary, but a pension is pretty much forever,” writes Sawchuk.

Wisconsin: Who’s to blame?

Who’s to blame for the teachers’ crisis in Wisconsin?  Andrew Rotherham has blame to go around.

The liberals want local control in Wisconsin, while Republican Gov. Scott Walker doesn’t trust local school boards to drive a hard bargain with teachers’ unions, writes Mike Petrilli on Flypaper.

Indiana Democrats left the state to block a right-to-work bill. Gov. Mitch Daniels said he won’t ask state police to pursue the missing legislators. He wants his fellow Republicans to postpone the bill.

Teachers’ pensions are unsustainable, writes RiShawn Biddle.

Does the conflict in Madison represent “creative destruction” or plain old destruction?  Government workers are in for a painful transition, writes Walter Russell Mead in The American Interest. But the only alternative to improving productivity is seeing living standards decline for all Americans, he argues.

What we’ve got to do here is to deploy technology and aggressive, creative reform and restructuring to health, education and government.  Much bureaucratic work in government is routine; computers are going to have to replace people wherever possible.  Staffs are going to have to shrink in ways that are simply unimaginable to present day government workers and their union leaders.

The educational system is going to change radically, Mead predicts. Students will be “evaluated and credentialed on the basis of what they know, not on the basis of time served.”  That will end the pressure to earn meaningless degrees.

Employees will demonstrate their competence to employers by passing exams in different job-relevant subjects that test real skills; the training for these tests will be provided by entrepreneurial organizations that are likely to rapidly replace many of the inefficient and expensive post-secondary educational institutions around today, once appropriate systems to regulate their practices and monitor their performance can be developed.  (Traditional liberal arts education needs to survive, and it will, but education and training are very different things that require very different approaches.  To promote economic growth and social mobility, and to help individuals continually retool their skills in a changing economy, we need to separate training from education and make training as widely available, cheap and convenient as possible.)

I was a union (Newspaper Guild) member for many years when I worked for a Knight Ridder newspaper.  Knight Ridder, once the second largest newspaper chain in the U.S., no longer exists. My former colleagues have taken wage cuts, unpaid furloughs, “give backs” on benefits and still seen two thirds of the editorial staff laid off.  If your employer’s business model becomes obsolete, workers have to adapt, which means working harder and smarter to replace your laid-off colleagues, finding a new job and learning to live on less money.  “Creative destruction” is a bitch, but it beats destruction.

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.

States underfund teachers' pensions

Underfunded Teacher Pension Plans: It’s Worse Than You Think is the cheery title of a new report by Josh Barro, Manhattan Institute fellow, and Stuart Buck, University of Arkansas doctoral fellow.

If public employee pension funds used the same assumptions as private sector plans, the aggregate estimates of unfunded liabilities would more than double, from approximately $332 billion to $933 billion. Unless it is addressed, this gap between pensions’ payment obligations and their investment assets will result in tax increases and cuts in services—a phenomenon already happening in some states.

All the pension funds that cover teachers face shortfalls: Unfunded liabilities to teachers total $332 billion, Barro and Buck estimate. Only five plans — in D.C., New York, Washington, North Carolina and Tennessee — are 75 percent funded or better. West Virginia’s plan is only 31 percent funded.

The stock market drop accounts for less than one quarter of the problem, the authors write: “The Dow Jones Industrial Average would have to nearly double overnight to make up for the present underfunding of these plans.” Fund managers have assumed that stocks will go way up to cover promised benefits. That allows public officials to commit fewer dollars now, pushing the problem off for a few years.

California’s public-employee pensions, including the Teacher Retirement System, are underfunded by $200 billion to $350 billion, concludes a new study by Stanford public policy students. They suggest “reducing pension benefits or moving to a hybrid system in which retirees receive a smaller fixed pension combined with a 401(k)-style plan.”

Connecticut is in big trouble too, says the Yankee Institute for Public Policy.

The $100,000 club

More than 3,000 retired California educators collect pensions of $100,000 or more per year, complains the California Foundation for Fiscal Responsibility.  I checked the list (pdf) and found a retired community college president and several administrators, but no teachers. Cameron McCune, a retired superintendent getting more than $20,000 a month, may be the top recipient.

My pension from Knight Ridder newspapers represents 15 percent of my peak pay.