Chicago Teachers Go On Strike (Updated)

I think we can confidently put a period on the Richard M. Daley era of Chicago city governance. This morning the Chicago Teachers Union went out on strike:

“Negotiations have been intense but productive, however we have failed to reach an agreement that will prevent a labor strike,” Chicago Teachers Union President Karen Lewis said at a dramatic 10 p.m. Sunday press conference. “Real school will not be open [Monday]. … No CTU member will be inside our schools.

“Please seek alternative care for your children.”

The announcement was quickly blasted by Mayor Rahm Emanuel as “a strike of choice” that didn’t have to happen if talks continued. He repeatedly declared: “My team is available now.”

But Lewis, just before the midnight strike deadline, said talks wouldn’t resume until Monday. She said she texted School Board President David Vitale and they agreed to meet Monday.

A “disappointed” Emanuel said the latest deal offered to the teachers was “very respectful of our teachers and is right by our children.”

I’ve already expressed my opinion of wage increases for Chicago teachers: half of Chicago’s teachers (plus more than half of Chicago’s police officers and firefighters) are already in the top 10% of Chicago’s income earners. They are the rich. The only feasible way to fund pay increases is by increasing property taxes, the burden of which will fall hardest on the poorest and weakest. We are living in a period during which public revenues are struggling to remain where they are. This is not the time for public employees to demand pay increases.

The last strike by Chicago teachers was in 1987 when Eugene Sawyer was president. The Chicago Public Schools was brought under Chicago’s city government during the mayoralty of his successor, Richard M. Daley, who has been mayor ever since.

Richie Daley’s father, Chicago Mayor Richard J. Daley, gained a reputation as a tough negotiator with Chicago’s public employees’ unions by bringing the union leadership into his office, closing the door, and giving them everything they wanted.

If you assume (as I do) that Mayor Emanuel’s ambitions extend beyond being mayor of Chicago, he may rue the day that CPS came within the purview of City Hall. The job is a lot harder when you may need to say “No”.

Update

Chicago area resident Mike Shedlock makes his own, somewhat harsher comments about the strike and publishes an email he received from John Tillman of the Illinois Policy Center. From the email alert:

The fiscal reality is that Chicago Public Schools are broke. CPS will be draining cash reserves this year just to stay afloat, and will be $1 billion in the red next school year. The 30 percent raise CTU originally asked for is out of the question, and so are other double-digit raises that CTU has demanded. Average teacher pay in Chicago is already at $71,000 without benefits, while the average Chicagoan makes only $30,203 and the unemployment rate in the city is nearly 11 percent.

Median pay for a Chicago Public School teacher is $76,000.

As I’ve written before I think that professionals and public servants need to regulate their wage requirements to the capabilities of the community they serve. There is no blood in this stone.

I haven’t looked at the CPS’s financial statements lately but I strongly suspect that the real, untold story in all of this is the rising cost of healthcare. When the cost of insuring Chicago’s teachers rises much faster than Chicago’s revenues do, something has to give. It could be the number of teachers or teacher pay. Chicago already has the highest sales tax in the country. Property values are falling and increasing property taxes by the amounts that would be required will be confiscatory. It will drive people from city.

31 comments… add one
  • Steve Link

    Standing up to the city unions is what won the state election for Rendell in PA. If Rahm really does have national aspirations this is a real opportunity for him.

    Steve

  • Let me get this straight. The government teachers want more money and more benefits, even though they already get quite a lot more than the average person in the districts they serve. They want this despite a proven record of extreme incompetence. (U.S. Department of Education: 79% of Chicago 8th Graders Not Grade-level Proficient in Reading; 80% of Chicago 8th Graders Not Grade-level Proficient in Math)

    So the public sector is actively looting the citizens of Chicago, absolutely screwing them, in return for lousy services that materially and negatively affect the future lives of the citizens individually and in aggregate. I don’t understand why the citizens of Chicago aren’t down at the demonstrations beating the living Hell out of these teachers until they get some of their money back for breach of promise. The public school teachers are worse than the gangsters shooting up the lemonade stands in terms of the damage they’re doing – the damage is much more widespread, just about as permanent, and costs a lot more.

    But I guess most of these citizens were “educated” by those teachers, and thus have no idea how ill-served they’ve been. No doubt if we’d just spend more money on education….

  • Could you provide a citation to actual data in the top 10% issue? Nationwide, household income at that level is upwards upwards of 100K, so unless median incomes in and around Chicago are significantly lower than the national level (which seems unlikely), I don’t see how those numbers add up.

    Also, if you have median income by educational attainment, it would be most welcome, since teachers all have BAs at least, and many (most?) have MA degrees as well.

    I’ll be researching this as well, but since you seem to have the data available, I’d appreciate a link to it.

    Thanks!

  • It’s based on statistics, Bernard. Median individual income for the city of Chicago is reported by the Census Bureau as around $30,000. Median income for CPS teachers, according, I think, to the Illinois Policy Institute, is $76,000. I dug up the standard deviation somewhere. Don’t know that I recall where. That enabled me to translate into percentages. In a normal distribution above one standard deviation is about 14%. Above two standard deviations is about 2%. I worked all of this out some time ago, at least six months ago.

    Another worthwhile factoid: according to the CPS wage schedule starting salary for a CPS teacher, B. Ed. only, ten month contract, is $48,000, not including benefits.

    Something that’s worth keeping in mind: most of the people who work in Chicago and earn significantly more than $100,000 a year don’t live in Chicago. They live in its suburbs, sometimes not even in Cook County. Also, under Illinois law Chicago can’t impose an income tax or a city earnings tax. Only use taxes and property taxes.

    The state of Illinois has an income tax, rates on which were increased by 25% in 2010. They didn’t realize an additional 25% in revenues from the increase.

    Update

    Based on the Census Bureau’s American Community Survey the top quintile of households (i.e. not individuals) in Chicago have total household income of $75,000 or more. That wasn’t my source for the standard deviation in individual incomes but it does substantiate it a bit.

  • I can’t find the table on individual income. I find tables on household income. And I find per capita income. But can’t seem to find table on median individual income. Could you link that? Or are you using per capita income?

    Also, I am pretty sure sure income is not normally distributed for a variety of reasons — minimum wage, zero bound, etc. Could you cite to that as well possibly?

    I’m not convinced your calculations would hold up to rigorous analysis, which is why I’d love to see actual data rather than admittedly clever guesstimates.

  • PD Shaw Link

    I was looking at these figures:

    Estimated median household income in 2009:
    $45,734 in Chicago
    $53,966 in Illinois

    http://www.city-data.com/city/Chicago-Illinois.html#ixzz267e98xy1

    Income is not necessarily in Chicago; its in the surrounding collar counties. Chicago can increase sales taxes to try to capture some of it, but they are already the highest in the country, and they’re quite regressive.

    Dave, I believe personal income taxes increased 66.7% and corporate taxes increased 30%.

  • I will stipulate that Chicago teachers do seem to be well paid by national standards, though I doubt a rigorous analysis would support either the notion that most of them are in the top-10% of income, nor the associated notion that they are “rich” in any commonly understood meaning of the term. This is especially true if you adjust for educational attainment.

    That said, I agree with the larger point that this is not the most sympathetic work action I’ve ever seen.

  • PD Shaw Link

    From the linked source:

    Median income for families with 1 earner: $33,634 (Chicago) $45,607 (Illinois)

    Income distribution by household income:
    >$200,000 (5%)
    $150,000 – $200,000 (4%)

    http://www.city-data.com/income/income-Chicago-Illinois.html

    So the median houshold consisting of two Chicago school teachers would in the top 9% of households.

  • The key point is not whether Chicago teachers are “worth” more in some abstract sense due to inputs (e.g. educational attainment) but one of ways and means. How can Chicago afford to pay teachers more?

    Chicago is limited to regressive taxes for raising revenue, use taxes and property taxes. National averages really don’t mean a damned thing. The questions are what incomes in Chicago are for ordinary people, whether they’re going up or down, how much of a ding paying for the CPS puts in it, and what they’re getting for their money. Since on time graduation rates in Chicago are hovering around 50% as they have been for about a half century, I would say we’re not getting nearly enough.

    I also believe that professionals and public servants have an ethical obligation to regulate their wage demands according to the means of the community they serve (as well as it being a practical necessity) but that’s another subject.

  • It’s late and I get up at 5 in the morning. Not too coherent. Yeah, you’re right, PD. The point is that revenues aren’t rising with tax rates but more slowly. That doesn’t bode well for continually increasing taxes to pay for the things we’ve already committed to, e.g. public employee pensions, healthcare, wage increases based on years of service, education, etc.

  • PD:

    Median households don’t have two full incomes. You’re only digging a deeper hole in terms of using dicey methodology to bolster what is a weak point.

    Simple point, Dave’s claim that teacher salaries put more than half of them into the top 10% is almost certainly false. Also, if you compare teacher to a similar pool of people in terms of educational achievement you will find that they are paid roughly in line with the rest of the population. Their median income is similar, in short, to the median income of others with similar education.

    That said, once you add in the 10 month contract, the benefits, and so on, they move ahead. So again, not a very sympathetic work action.

    On the issue of wages and community means. Um, okay, I guess. If implemented, of course, this would create a death spiral for any below-average income community, but I am sure you’ve thought of that. Or have you?

    About the performance of Chicago schools. Amen bro. We have the same problem in DC. Testing may be an answer… not sure it is though. I’ve always thought the bigger issue was inefficient and incompetent administration rather than teacher skills per se, but really, I don’t know enough about education policy to really comment intelligently.

  • On the issue of wages and community means. Um, okay, I guess. If implemented, of course, this would create a death spiral for any below-average income community, but I am sure you’ve thought of that. Or have you?

    If you’re saying that professionals operating purely as economic entities is unworkable, I agree and have written about it frequently. It’s the reason that doctors subscribe to a code of ethics which requires them to treat people without regard to their ability to pay. Unfortunately, more honored in the breach than the observance.

  • Also, if you compare teacher to a similar pool of people in terms of educational achievement

    Please keep in mind that’s an erroneous way of determining the price of labor. Prices are determined based on supply and demand or fiat, not on cost to produce. At most production cost determines asking price not selling price. What it actually determines is profit or loss. Worse, comparing two products, both of which have fiat prices, and finding that their prices are similar is just a way of discovering the process by which the fiat price was determined, not the legitimate market value of the product.

  • Also, if you compare teacher to a similar pool of people in terms of educational achievement you will find that they are paid roughly in line with the rest of the population.

    A questionable statement unless you define educational achievement. A degree in education is a testament to the fact that the student paid their tuition on time and may have gone to class on a semi-regular basis. Beyond that it signifies little. It’s not like it is equivalent to bachelor’s degree in electrical engineering, to choose one example among a horde of options.

  • PD Shaw Link

    @Bernard, I realize the household medians are inexact, but the public school teachers are easily capable of living in the top ten perecent, if they marry a teacher. They could also marry a lawyer, median Chciago salary is $77,084, but marying a teacher has the upside of school vacations, including ten weeks in the summer, in which they can earn more money or take a fun course on Buffy the Vampire Slayer studies which the union contract will give a bump-up for.

    http://www.payscale.com/research/US/Location=Chicago-IL/Salary

  • [Teachers] can earn more money or take a fun course on Buffy the Vampire Slayer studies which the union contract will give a bump-up for.

    As I was saying about educational achievement….

  • Dave:

    I have no idea what you are arguing in terms of wages. The set of people with college and graduate degrees is smaller than the set of all people in a community. They are in shorter supply. If you have jobs that require such degrees, you will need to pay them more than you would if you had no such requirements. The issue isn’t the cost of production. The issue is that teachers are only hired from a specific pool of people whose alternatives — other jobs that require college and graduate degrees — are more highly compensated than the median in a community which includes all jobs.

    If you want to see whether they are overpaid, you have to compare them to a similar pool of people. I mean, this is a basic concept, no?

    In terms of the death spiral… you missed my point, I think. My point is that if you pay people according to the “means” of the community, poor communities will pay less, which will tend to drive them out quality people in search of higher wages, which further depresses income levels, thus further depressing wages, and so on.

  • PD Shaw Link

    Bernard, look up market-clearing price. Illinois has a substantial number of freshly minted college graduates with teaching certificates who can’t find a job. There are plenty of people who find the job attractive and challenging, with good benefits who will work for less.

  • PD: Indeed. Over 300,000 teaching jobs have been cut in the past three years nationwide creating a large surplus. If this is, indeed, the new normal, we’ll see downward pressure on wages.

    But the freshly minted issue only deals with the starting salary. I actually haven’t commented one way or another on that point. But yeah, $58k looks high to me.

    Also too, your “data” on median lawyer salary is almost surely wrong — self-reported and non-scientific. BLS shows median lawyer salaries at $114 nationwide. Hard to believe Chicago is lower than that. http://www.bls.gov/ooh/legal/lawyers.htm

  • PD Shaw Link

    Bernard, there is no downward pressure on wages, so long as the unions prevent it. For existing teachers, total compensation is going up (healthcare, cost-of-living guarantees and credentialism bonuses) and if tax revenues are flat, schools can only respond by cutting back on the number of teachers. My school district keeps paying more for fewer jobs, I assume Chicago is in the same position.

    I don’t have time to get sidestracked on the issue of legal salaries, since there is an ongoing dispute about the accuracy of wages in the legal field that are still being unravelled. I think this graph of starting legal salaries is instructive on the basic framework of what happens:

    http://abovethelaw.com/2010/07/nalp-gives-more-information-on-expected-lawyer-salary/

    The top 25% of lawyers in the country will get a starting salary of around $160k working for BigLaw. Very few will stay with BigLaw, but those who do will average $500k salaries. Many will not be asked to stay, many (particularly women) will not want to stay. Some of these will leave the practice of law altogether, many will join smaller firms in the suburbs, where they will make $75k to $125k, enjoying a middle class lifestyle. Most of the lawyers in the top group will not live in Chicago, except perhaps during their first several years as young adults.

    The rest will have starting salaries of $30k to $60k and find the practice rough. The better off in this group will get government jobs, where their salaries will largely track teachers (staring $50k with top positions in the low six figures). Many others will quit or their practice will become intertwined with some other business (like property management) or politics.

  • BLS shows median lawyer salaries at $114 nationwide. Hard to believe Chicago is lower than that.

    As I have documented here many times the term “median lawyer salary” is not meaningful. As PD Shaw noted above in the United States wages among lawyers occur in a bimodal distribution. That means that there are actually two median lawyer salaries, one for graduates of the top 15 law schools who work for big law firms, generally on behalf of the financial industry, the other for all other lawyers. The median wage for lawyers in that lower classification is much, much lower.

  • PD:

    I’m not sure why you keep changing the issue. I’ve tried to make one simple argument, that Dave’s claim that 50% of teachers are among the top 10% of income in Chicago is inaccurate. It is.

    I further rebutted you assertion that teacher and lawyer median salaries were equal. Indeed, your latest post supports mine. Starting median legal salaries are roughly the same as overall median teacher salaries, which means that median legal salaries are surely much higher than teacher salaries.

    You are so blinded by ideology that you cannot seem to recognize what are simple empirical statement and judge them accordingly.

    I also never said teacher salaries have fallen. I’ve said, if the current situation is the “new normal” we’d see downward pressure. Whether that downward pressure is reflected in actual wages or cut positions is also something I did not weight in on.

    You seem to be assuming I had a bigger agenda that I have. I am just trying to get Dave to admit that his claim about median teacher salaries making them “rich” and in the top 10% is just a half-assed guess and almost surely wrong.

    If I can get you to admit your claim that median legal salaries and median teacher salaries are equivalent, I’ll count that as a gravy. But neither of you will admit you’re wrong… which is frankly disturbing.

  • Bernard, there is no downward pressure on wages, so long as the unions prevent it. For existing teachers, total compensation is going up (healthcare, cost-of-living guarantees and credentialism bonuses) and if tax revenues are flat, schools can only respond by cutting back on the number of teachers.

    The reason that the number of teaching positions is being cut is, essentially, because their contracts require it. Local government budgets are by law required to be balanced. Contracts that require raises for “costs of living” as well as higher pay for seniority and hours of education or degrees beyond the bachelors or certificationare a commonplace if not the norm. Add to that the rising cost of healthcare and you’ll find that total compensation for teachers is rising even as revenues are flat or falling. Districts have no recourse other than to reduce the number of teachers.

  • If I can get you to admit your claim that median legal salaries and median teacher salaries are equivalent IS WRONG, I’ll count that as a gravy.

  • Dave:

    Yes, I swear I know all of that. Which is why people like me would like more on-going stimulus by the feds to states in order to counter-act those pro-cyclical pressures.

  • Which is why people like me would like more on-going stimulus by the feds to states in order to counter-act those pro-cyclical pressures.

    If the federal government started subsidizing the operating costs of state and local governments systematically, I’m not sure how you’d avoid the problems that California and Illinois have encountered on a grand scale. In both of those states while districts negotiated the contracts the state was responsible for paying the pensions. Neither state funded the pension funds adequately and the commitments are just too much for the states to bear.

    To clarify what I’m talking about as I see it the problem is that under those circumstances districts are motivated to put as much of total compensation as they possibly can into the portion that won’t be paid by them. Same thing with the federal government paying teachers’ salaries.

  • PD Shaw Link

    @Bernand, Chicago is a city with jurisdictional limits. I’m talking about people residing in Chicago and I believe you are talking about people employed in Chicago. There is a big difference in terms of who is the top 10% and what Chicago can pay its employees. The people you think are in the top 10% are making their tax payments elsewhere.

    And you have no idea about my ideology. I’m making a point here that Democrats routinely make. Illinois’ governor has also told the state unions they need to take 15% paycuts and that their 30 year party is over. He’s a Democrat. I assume you don’t live in Illinois or understand what is happening here or you wouldn’t make these ad hominem accusations about ideological bias.

  • gbuddha2012 Link

    Anyone telling you that the median income is 78 k is blowing smoke. Since the average is around 71k according to the CPS and a number of other fact checkers the actual median salary is somewhere in the low or mid fifties. A very good salary indeed, but also surpassed by many other professions. Comparing teachers medians to the whole is really silly, just think off all the minimum wage and just above wages that are included. Teachers deserve every penny they make for many reasons including schooling and continuing education. If you think your wages suck don’t blame the teacher next door or down the block — take it up with your boss.

  • gbuddha2012 Link

    stop moaning about property taxes… anyone who has a couple of kids from k-13 makes out on the plus side — around 26 k schooling a year x 13 yrs. average property tax in Illinois is about $3,300. do the math.

  • gbuddha2012 Link

    as for taxes in illinois, they as a whole are lower than wisconsin or many other states — even scott walker admitted this at the beginning of his term

  • PD:

    I apologize for the claim of bias… but I don’t quite know how else to interpret your absolute refusal acknowledge errors of fact.

    First, there is zero evidence that 50% or more of teachers are within the top 10% of income earners. That was just Dave’s calculation based on a bunch of faulty assumptions.

    Second, the median salary of teachers and of lawyers in Chicago is not even close to being the same, despite your claim that it is. You demonstrated that yourself when you linked to evidence that STARTING legal salaries are similar to the median for ALL teachers. And yet, you haven’t retracted that either.

    Usually, when I run into people who refuse to correct errors of fact, it is an example of ideological bias. Apologies if it is some other issue in your case.

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