This Is Not the Stimulus You Were Looking For

The big news in Chicago is the sword of Damocles hanging over the city’s head, a prospective teachers’ strike in the fall:

Chicago teachers countered Mayor Rahm Emanuel’s aggressive approach to school reform with the most powerful weapon in their arsenal, giving overwhelming authorization for a strike if contract talks continue to flounder.

Nearly 90 percent of Chicago Teachers Union members, some 23,780 city employees, voted to support a strike if one is called, the union said Monday. Union President Karen Lewis said the three-day vote was an “indictment” of the increasingly strained relationship between teachers and Emanuel’s hand-picked administration at Chicago Public Schools.

The teachers want a 30% wage increase.

Chicago teachers are already the highest-paid in the nation, the average teacher earning $76,000 for a ten month year. That’s double the median wage for Chicago.

Chicago already has the highest sales tax in the United States. Under state law the city doesn’t have the power to impose an income tax. Its only recourse is increasing the property tax:

Regardless of where Chicago teachers currently rank in salary, Civic Federation president Laurenence Msall said there’s one big roadblock to a big raise for teachers.

“It’s math. It’s not really politics, as much as it gets caught up in politics. The financial situation of the Chicago Public Schools is dire. The situation of the State of Illinois – that provides significant funding to the Chicago Public Schools – is dire,” he said. “The property tax payers in Chicago are beleaguered. They’re seeing a drop in their property values, and to be asking them to pay increased property taxes, so we can fund increased salaries for employees is something that’s gonna be a very tough political sell.”

Msall said there’ simply not enough money to support a significant pay hike for the teachers.

“The only way that they will find money to increase some teachers’ salary, is we’re going to have to reduce the number of teachers, and the number of employees in Chicago Public Schools,” Msall said. “There just is no other way to get around it.”

The only other possibility would be imposing a property tax hike.

A 30% pay increase for the 23,000 some-odd Chicago teachers would mean a tax increase of roughly a half billion dollars: $400 for every man, woman, and child in Chicago.

According to the Chicago Public Schools, their increasing budget which even without the pay increase for teachers is $712 million in the red, is growing for three reasons. In decreasing order of importance:

  • step/lane salary increases for teachers
  • healthcare costs
  • pension costs

The first two account for 90% of budget increases.

The president’s latest economic stimulus plan is aimed at staunching the flood of jobs from the public sector. Here in Chicago at least the reason that teachers are being laid off is almost entirely so that the contractual raises can be paid to other teachers and rising healthcare costs. Unless the underlying pathology is addressed more money is just temporary first aid.

Related—from Mickey Kaus:

It would be reductive and predictable for me to point out that all three of these Obama-era problems have a single cause: public employee unions, which helped delay the stimulus, which protect non-essential jobs along with essential jobs, and which negotiate unsustainable layoff-inducing benefits packages (because it’s easier to win a union leadership election if you increase the benefits of 90% of your members while laying off 10% than if you lower the benefits of 100% of your workers by 10%–and piss them all off).

The issue isn’t whether you’re pro-union or anti-union. It’s whether you’re pro-reality or anti-reality. As I have said before, professionals and particularly professionals who are employed by local governments must regulate their wage demands to the community they serve. It is both a professional responsibility and a practical necessity. It is the difference between being a public servant and viewing rent extraction as the sole purpose of government.

39 comments… add one
  • jan

    The kicker in what you posted is this:

    “It’s math. It’s not really politics, as much as it gets caught up in politics. The financial situation of the Chicago Public Schools is dire. The situation of the State of Illinois – that provides significant funding to the Chicago Public Schools – is dire,” he said. “The property tax payers in Chicago are beleaguered. They’re seeing a drop in their property values, and to be asking them to pay increased property taxes, so we can fund increased salaries for employees is something that’s gonna be a very tough political sell.”

    It reminds me of the adage about not being able to squeeze blood out of a turnip. That’s what this Teacher’s Union is attempting to do from the citizens of Chicago, regarding 90% of their membership wanting a 30% pay increase. Here you have an impossible financial situation, with lowered property values, along with higher property taxes, and all the unions want is to make that ratio even more lopsided, in order to pay their people more!!! Basically, they are taking from one suffering segment of society to bulk up another, who is already getting higher pay than the average salary in the nation. You got to wonder about the intelligence of these teachers!

  • jan

    Sorry about the double post…

  • Sam

    I grew up in Ontario, Canada during the late 80s, early 90s. Went through 3 teacher’s strikes of at least 6 weeks each. Ontario already had a waiting list of several years as a substitute teacher before one could win the lottery and become a full time teacher. Seems to me that was a pretty good indicator of whether they were being paid enough or not. That said, teacher quality at all my schools really, really good.

  • michael reynolds

    A 30% increase when we’re at 8% unemployment and the state is bankrupt. You can’t say they don’t have balls.

  • jan

    Is it ‘balls’ or rocks in their heads? People label Wall Street as being greedy. Do you think that Chicago teachers might have something in common with them?

  • The teachers want a 30% wage increase.

    Michael….you were saying something about my not observing reality? I think you missed. :p

  • The teachers want a 30% wage increase.

    But you see, the government creates jobs. This money should be spent this way and we’ll get something that will create as many jobs as the internet did. Guaranteed!!!

    lol

  • jan:

    It reminds me of the adage about not being able to squeeze blood out of a turnip.

    I honestly don’t think that’s what it is. I think they believe in the “roomful of money” theory, i.e. that somewhere there’s a roomful of money just sitting around to pay those raises with.

    Michael:

    A 30% increase when we’re at 8% unemployment and the state is bankrupt.

    Not only is the state bankrupt but it’s bankrupt while being among the states that spend the least on education as a total percentage of spending on education. In Illinois most education spending is local spending.

    And it’s not just 8% unemployment. It’s 8% unemployment that has hit people with bachelor’s only. Teachers, particularly teachers in big city schools, frequently have notoriously lightweight education degrees. You could probably improve the math and science education in the public schools here just by replacing the present teachers with out-of-work electrical engineers.

    Sam:

    That said, teacher quality at all my schools really, really good.

    I’m not a good reference point on public school teacher quality, particularly at the high school level. All of my high school teachers had doctorates and most of them had two. My high school English teacher (two years) had doctorates in theology and in comparative literature. My high school Russian teacher (four years) had doctorates in Russian and Italian. Two of my high school math teachers had doctorates in math (one in theology, too), the third (he was my math teacher for two years) had a doctorate in theater. He doubled as the head of the school’s theater group and either theater at St. Louis University during the summer or worked at the Muni as stage manager.

  • Icepick

    The president’s latest economic stimulus plan is aimed at staunching the flood of jobs from the public sector.

    Flood? The number bandied about lately has been 450,000 public sector jobs lost. That ain’t a flood, more like a trickle. I guess they’re so convinced the private sector is doing fine they haven’t noticed what carnage took place.

  • Icepick

    You got to wonder about the intelligence of these teachers!

    No, you really don’t.

  • One more point on the incomes and income expectations of Chicago Public School teachers. The median income in Chicago is about $38,000, standard deviation about $9,000, the starting salary for a CPS teacher, bachelors only, 10 month position is $45,000.

    A teacher starts at about one standard deviation above the median. That means that fewer than a third of the people in the city earn more than a teacher does. Since the average is $76,000 that’s more than two standard deviations more than the median and only about 5% of the people in the city earn more than that. Since it’s the median half of the teachers earn more than that and the other half earn between $45,000 and $76,000.

    There are roughly 26,000 teachers in the CPS. If 13,000 of them make more than $76,000, there are (I guessimate) fewer than a million wage earners in Chicago, the top 5% of income earners in Chicago comprise about 50,000 people, 13,000 of whom are teachers. Get the picture?

    So, essentially, either they’re planning on getting their raises on the backs of people who earn a lot less than they do or they plan to do it by taxing a very, very small percentage of Chicagoans. The first plan is immoral and the second impractical and self-destructive.

    Basically, I think that the teachers are looking around at doctors, lawyers, dentists, commodities traders, and so on and wondering why people doing as difficult and important a job as they are aren’t paid more. The answer is that the doctors, lawyers, dentists and others who are making more don’t live in the city. They don’t pay city taxes. The city can’t make them pay taxes.

  • PD Shaw

    @Dave, it may be different in downstate, but here public school teachers at most work 9 1/2 months, (at least an 11 week summer break). Maybe Chicago teachers should unionize?

    @Sam, from what I can tell in downstate Illinois, recent education graduates are having trouble finding jobs. My impression is that they are going for their masters now. The “step/lane salary increases” might mean preferences and automatic higher pay.

  • Hmm. I guess I’m using educational system jargon. The normal, traditional school year is known as a “ten month program”. It may not actually be ten months long. The legal minimum number of school days that a district must observe in Illinois is 176 days. That’s considered a ten month program.

    “Step and lane increases” refers to automatic contractual pay increases based on credits, degrees, certifications, and years of service. In most districts teachers get automatic pay increases just based on years of service. They can boost that by getting additional certifications or by taking credit-hours of additional education or by earning a masters or doctorate.

  • PD Shaw

    The Illinois Constitution requires the State to pay at least 50% of public education costs. They never have. Last I saw it was around 25%. The state allocates a pool of money to local education then distributes it to school districts according to a formula. My impression is that the formula primarily serves as a floor to make sure that each student has at least a certain level of financial support, probably with a COLA and other modifications.

    Which is a long way of saying that my assumption would be that the raises the teachers want would unlikely be funded by the State at all.

  • PD Shaw

    Dave, one of the reasons 10 months stood out to me is that my grade school kids attend an 11 week summer camp program (at a Congressional Church) staffed by public teachers and college students. I think the summer break is about 12 weeks.

    My unconfirmed suspicion is that many teachers take this time to take classes and get credits or certificates that step-up their pay irregardless of whether their position would actually benefit from it.

  • PD Shaw

    In case there is any uncertainty, I am anti-government union. As a compromise I might support unionization for jobs that don’t require a bachelor’s degree. A teacher can take that credential to any school in the country, public or private, and negotiate the best wage for him/herself.

  • Drew

    I think the thread is doing justice to the issue. May I simply point out that this is what you get with Democrat control.

    Deny it if you want. But the empirical evidence is in.

  • PD Shaw

    Drew, I think Big Jim Thompson let the government unions in the door in Illinois. IIRC Daley opposed it.

  • PD Shaw

    “The answer is that the doctors, lawyers, dentists and others who are making more don’t live in the city.”

    There was an article a couple of years ago in which a lawyer for a state agency headquartered in Chicago was being asked about the temptation for that particular agency to unionize. He said he couldn’t afford to live in the state, let alone the city (one of the few which haven’t). He was commuting daily from Indiana. I think he might have been making close to $75k, but with student loans that teachers don’t have.

  • PD Shaw
  • Drew

    PD

    Am I to understand you have adopted the position that the Democrats are not the party of the public unions, and the Republicans are?

  • As I’ve pointed out from time to time incomes for lawyers occur in a bimodal distribution. $75,000 is actually at the high end of the lower mode in that distribution. The people in the higher mode work for Sidley Austin.

  • steve

    I would think that demanding such an outrageous raise should make this easier for Eamuel to manage. How is it being reported in the Chicago press? Has this been polled with the general public? When was the last strike in Chicago?

    Steve

  • PD Shaw

    @Drew, no but blame deserves to be cast where its deserved.

  • steve:

    How is it being reported in the Chicago press? Has this been polled with the general public? When was the last strike in Chicago?

    The last teachers’ strike in Chicago was in 1987. That’s long enough that the present union leadership and most of the present teachers don’t remember it.

    At this point the reporting in the Trib and the Sun-Times has been vaguely supportive of Emanuel and neutral or maybe guarded towards the union. The only polling I’m aware of support Emanuel against the teachers.

    Considering that Chicago is, essentially, the capital of the opinion polling universe, you’d think there’d be more polling than there is here. Opinion polling was pretty much invented at UofC.

    The way the story came to me Arthur Nielsen, George Gallup, and the chap who founded NORC (I forget his name) were sitting in a Hyde Park coffee shop, brainstorming and came up with the idea of statistically-based opinion surveying. Nielsen and Gallup went on to start their own companies and NORC is still at the UofC—main client is the U. S. government. NORC is an old client of mine.

  • PD Shaw

    Ask for the moon, get ready to accept a condo on the Gold Coast. Classic negotiating tactic, only leads to deadlock most of the time.

  • Icepick

    If I’m understanding this correctly, higher wages won’t even have much impact on attracting “higher” quality teachers, as it is a closed shop with a shrinking pool of employees that will reward seniority. As the older teachers retire administrators will be looking to higher newly degreed teachers fresh out of education colleges (because they’ll be the cheapest), and since those folks have no track record it wouild be even more difficult that usual to determine if they’re any good or not.

    So you’ll get all the drawbacks of high salaries and none of the benefits. Or am I missing something?

  • Icepick

    “will be looking to higher ”

    Sigh. HIRE, HIRE!

  • Or am I missing something?

    No, that’s about the way I see it. Since Chicago teachers are required to live in the city that narrows the pool a bit farther, to teachers who already live here or are willing to move here.

  • PD Shaw

    icepick, its worse when you consider what neighboring school districts can afford to pay. This is Oak Park, Illinois:

    — Driver’s Education teachers making $142k, $124k, $117k, $113k, $91k, $86k (all have Masters degrees)
    — A $141k librarian
    — A $129k social worker
    — A $159k guidance counselor
    — A $99k Sex Ed teacher (what did he have to do to get his Masters degree in this?)
    — A $101k Home Economics teacher
    — Gym teachers hauling down $143k, $119k and $115k

    So long as the primary funding mechanism for the schools is local property taxes, Chicago can’t compete on salary any way.

    http://chicagolampoon.blogspot.com/2011/03/oak-parkriver-forest-hs-teachers.html

  • Sam

    I’m not a good reference point on public school teacher quality, particularly at the high school level. All of my high school teachers had doctorates and most of them had two. My high school English teacher (two years) had doctorates in theology and in comparative literature. My high school Russian teacher (four years) had doctorates in Russian and Italian.

    ha! well, then I guess mine were just good then. Minimum standards at the time were two bachelors and a master.

  • Drew

    Pd

    That wasn’t really an answer. Big Jim was not my fave, but really, let’s look at systematic policy, not just an event. Otherwise, it’s just pot shots.

    Icepick and Dave

    See the “Trannsfusion” thread.

    Please see the

  • Icepick

    See the “Trannsfusion” thread.

    I’m sure I would have missed that without your heads-up, Drew. Thanks!

  • Drew

    Icepick

    Sometimes I lose my cool. Not often. But sometimes.

    I wish you only the best.

  • Icepick

    Now I feel all warm and fuzzy.

  • Drew

    Icepick

    Nah, let’s not get crazy. But I do mean it. I wish you only the best.

  • Icepick

    Thank God for all those STEM opportunities….

    A glut of trainees and a dearth of academic positions in the United States is creating a dysfunctional biomedical research system, an advisory group to the National Institutes of Health (NIH) concluded today. It urged several steps be taken to bring the problem under control. NIH should cap how many years it will support graduate students, pay postdoctoral researchers more, and encourage universities to fund staff scientist positions.

    Too many people, too few opportunities.

  • The opportunities are for medical technicians, not for academics. For there to be more opportunities for academics the number of billets in training programs for medical professionals and/or the number of programs would need to rise proportionally with population. Mustn’t have that.

    Our present system creates a shortage of practitioners and a glut of academics.

  • Icepick

    Our present system creates a shortage of practitioners and a glut of academics.

    It’s worse than that. The present system creates a glut of academics with big piles of debt. And the people encouraging this seem to believe that those degrees will automatically promote high-end job growth simply by their existence. (I guess it will, for government administrators to handle the programs to collect the debt, later to help mitigate the debt, later to forgive the debt, etc.)

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