This is a letter I sent to my local paper yesterday that I thought I would share:
To the Editor:
I am writing in response to Mr. Monchinski’s letter
asserting that Bedford Central teachers are not overpaid. A couple of years
ago, I did something I wouldn’t wish on anyone: I read through the entire
115-page teachers union contract. I wanted to understand why my property taxes
were so extraordinarily high relative to the rest of the country. I found out.
Allow me to lay out the facts, and then you can decide for
yourself. For starters, it’s not difficult to make six figures a year – simply
hanging around will get you the necessary raises, which come every six months,
regardless of performance. Teachers are also only contractually required to
work only 181 days a year, versus about 240 for the rest of us. But they also
get 15 sick days, four personal days, and five bereavement days. Unused sick
days go into a “bank” which pays out on retirement.
There is extra pay for everything imaginable. Coaching
sports, monitoring recess, helping with plays, etc. (all the things private
school teachers are expected to do as a normal part of their jobs). My personal
favorite: $1,339 for monitoring the juggling club.
The big enchilada, though, is retirement. Teachers get 70% of their peak base for life,
which typically works out to about $85,000 a year (not taxed by the state,
incidentally). Retirees also get excellent family health benefits, worth at
least another 16k a year. To get all this, they are only required to cover 15%
of their health.
Live another 25 years, and that’s a cool $2.5 million. They
have an excellent chance of living that long, too, because they get to retire
at age 57, Discounted at 4%, the package is worth a cool $1.6 million. It’s the
same as being handed a $1.6 million fully-funded IRA on the day you retire,
courtesy of the taxpayers.
These are the facts. They are purposefully buried in a
complicated contract that few ever read. Mr. Monchinski’s primary argument
seems to be that there are teachers in other New York District paid even more
than here. Notice he says nothing of, say, nearby Connecticut where teachers –
and taxes – are significantly lower.
We were trained for decades to think that teachers were
underpaid, largely because they were. That time has passed.
School Boards have a difficult time negotiating better terms due to the so-called "Triborough Amendment" that protects automatic step and lane increases during periods after a contract has expired. There is little incentive for unions to "bargain" when they have that extraordinary protection.
ReplyDelete@Jeff Indeed, NY State is the only state in the country with such a law.
ReplyDeleteYou are going to have to learn. People will pay top dollar to have their kids educated and especially so in rich school districts. That's why rich folks are even willing to fund private school on top of paying taxes for the public school. Try to find any school district in the country with a decent level of income and find one that pays average wages. You will be looking a long time. It's market driven.
ReplyDelete@Wells Residents in these school districts have absolutely no idea their teachers are getting paid like this. The teachers themselves don't even know how well they're paid, as so much of it is on the back end and buried in the fine print. A friend of mine who ran a nearby school board proposed that a present value estimate of the package that each teacher was getting be calculated and made known. The union kicked up holy hell and the idea went nowhere.
ReplyDeleteThey don't know and they don't care. You are dealing with people that worry about whether or not they are going to get their kid in the best nursery school and holding their kids back for success ala Malcolm Gladwell.
DeleteNo unions in Texas. Superintendents making $300K with a total of 3,000 students. High school ootball stadiums with JUMBOTRONS. Artificial turf football fields for tiny little spot in the road towns that play 6-man football.
I doubt teacher pay there is particularly high compared to the average pay of the county. As they note, they pay higher elsewhere.
Look to Nassau county and its finances. They want all the services that can be provided. It's a population that demands the best for themselves.
Sunshine is a wonderful disinfectant. If taxpayers in high performing school districts don't care, then unions and Wells Fargo should not object to disclosure of the numbers and the present value of retirement benefits. I believe that the point here is that teachers are no longer underpaid--and they aren't.
ReplyDeleteI wouldn't go that far. Teachers in a lot of places are very underpaid and unqualified as a result. Still profound shortages in some areas. They have highly-paid teachers in Westchester County, New York, USA??? You don't say.
DeleteHow much did you have set aside for retirement from wealth you created by the time you were 55? More than $1.6 million? If so, is your view that teachers are not "worth" as much as you are?
ReplyDelete@Anonymous: You are entirely missing the point. Anything I save, or anyone else in the private sector, for that matter, I save myself. It's not handed to me as a gift.
ReplyDelete@Scott: So do you think private sector employees view their pensions and any other retirement benefits as a "gift?" At the upper levels they probably should, but I don't think they do, and neither do the auditors, it goes in the compensation section of the 10Ks. Where the money comes from doesn't really matter, you are saying that a $1.6 million package is too much, while you have extracted (much?) more than $1.6 million from the "system?" Your point on omitting performance from the math is on point, and is a problem in both the public and private sectors. But when a wealthy person starts complaining that someone is paid too much, focusing mainly on the numbers and not the value created and what the market looks like, it can sound like you think you are better/smarter than other people. If that is indeed what you think that is fine, but it is probably better to just keep it to yourself.
ReplyDeleteWhat I said, and I'll say it again, is that no one realizes just how rich these packages are, and that includes the teachers themselves. The taxpayers are just now discovering the math and how unsustainable it is. My own town is facing a whopping $8 million deficit this year. A hole like that can only be plugged by cutting programs everyone cares about. We, and many other towns, have caught up to the can that has been kicked down the road for so long.
ReplyDeleteAs I am not hearing you, you are not hearing me ...
ReplyDeleteThe degree of obliviousness has nothing to do with the point I am making (though I would guess the teachers might know more than the taxpayers do about their retirement benefits, which I agree is not good). Here's a simple question:
Would you trade your savings/nest egg for one of these "rich" teacher packages?
What a ridiculous question. Are you equating teaching with all other jobs? Teachers should be paid a market rate like anyone else, and the problem is they are not. Whenever our high school has an opening, they literally get thousands of resumes. That's how good the pay is. And no, many don't even know just how good. When the head of the school board proposed showing teachers a statement with the present value of their future benefits, the union shut him down.
ReplyDeleteI will take that as a "no" to the ridiculous question. All jobs are not equal. Are you as a finance/tech guy also overpaid, or are you creating more value for society and enjoying the just rewards for that? If the latter, again, great, but perhaps better to keep it to yourself, and be grateful and humble (some people think we have a wealth inequality issue, no need to add fuel to the fire).
DeleteOn the thousands of resumes you can't have it both ways. Is everyone on to the fact that teaching is an easy, lucrative gig, or d'u have thousands of people who are clueless about the economics of the profession? Either way, with that many applicants hopefully they are getting some good teachers, and good teachers should be well paid, right?
You have absolutely no idea what I'm paid or what risks I'm taking to achieve that or how hard I work to get it. No one in a truly free market is overpaid because all transactions are voluntary. You make money because you create value for someone else. Do we really need to go over this? The problem with teachers is that their unions circumvent the free market mechanism by greasing the political system. It's what you might call crony capitalism, but in this case it's crony unionism.
ReplyDeleteAs for getting good teachers, there are some, of course, but many become demotivated by an absurd system of guaranteed tenure.
Enjoy the Sanders campaign.
I have more of an idea about what you were and are up to than you think.
DeleteNot a big Sanders fan, but not naive enough to think that anything close to free markets can be achieved. There are plenty of CEOs pulling down millions as their companies are failing. $100k for a retired teacher with long tenure in Westchester? Sounds about right to me. Is there lots of low income housing where you live?
Enjoy the Trump campaign. Guy who made what he did by gambling with house money, like you thinks everyone else is incompetent, and is a sexist racist bully. But he'll be running against Hillary and he'll lose.
If you know me you should have the guts to post with your name. We're done.
ReplyDeleteThe other point I would add is that teachers' pensions are funded by taxpayers who have little say in the matter - once you've moved into a town you essentially must pay whatever the tax man tells you. Private sector pensions are funded by consumers who can choose which products and brands (and by connection, compensation structures) they support.
ReplyDeleteWow, great post. Can't wait till I get my hands on the contracts for Ossining teachers AND the police. This taxpayer abuse has to stop.
ReplyDelete