Chicago Teachers on Strike
- Posted by Jeff Carter
- on September 10th, 2012
The Chicago Teachers Union decided to flex it’s political muscles and strike. It’s not really a forced strike, as Mayor Rahm Emanuel said, “They chose to strike.”. This strike isn’t about money, it’s about power. Will the Mayor bow down to the teachers union?
A couple of years ago, I wondered about how much a teacher really makes. You can click over and see the math. It’s pretty current, although since posting, the numbers might have gotten bigger. Essentially, teachers make more than you really think. The reason for that is that they have pensions that are guaranteed. They get annual cost of living raises when they are retired, and they have no fear of ever losing money. To account for this lack of risk correctly, all the pension money should be amortized back into their annual salary. Additionally, because school is only in session around 8 months per year, that needs to be amortized in. That’s how much they really make.
Ironically, people read that post and think that I am against paying teachers. That’s not the case. I’d pay them more. However, I’d balance that with a few things. First, I’d get rid of guaranteed pensions. The money ought to go into a 401(k) just like private workers. Secondly, they ought to pay more for medical benefits-but that goes right into reforming our entire medical system to be more market based. If you were able to make that reform, teachers medical insurance costs would be lower than they are today.
Teachers Unions donate exclusively to the Democratic Party. Like most public sector unions, they donate money to Democrats so they can sit across from them at the bargaining table. When a Republican wants to make a change in education, they are assailed and their character assassinated. Hard to do that with Mayor Emanuel, since he is a liberal Democrat.
What teachers are really against is accountability. The movie “Waiting for Superman” lays that fact bare. Teachers get tenure, and once attained, it’s virtually impossible to get rid of poor performing teachers. Some of the best performing private companies routinely cut their poorest performing employees every year. While public school education isn’t exactly like that-we ought to be able to get rid of poor performing teachers.
With the way our public education system is structured in America, we are guaranteed to turn out poor products no matter how much money we spend. The economic incentives for success are lined up incorrectly. There is a litany of things we need to do to change, but there are powerful forces aligned against that change. Mayor Emanuel wants to make a couple marginal changes that will make a very small difference. Imagine what would happen if Emanuel was bold and totally changed the system!
The decrepit state of our education system ought to be the civil rights issue of our time. Often when people think about poor performing educational systems, they think only of the inner city. But what about rural educational systems that don’t have the resources? There are suburban educational systems that don’t measure up as well. This crisis isn’t confined to inner city schools. It’s endemic everywhere in America where public education exists.
Teachers are trying to make education all about money. The reality is if we reformed the nation’s education system we could spend a lot less money, and get better results. Ask yourself this question, Starting tomorrow if we guaranteed that every teacher made $150,000 a year, does anyone think that we would be turning out better students ready to compete in a hyper competitive world wide economy?
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UPDATE
From Instapundit:
“A suspicious reader emails: “It MAY be ALL coincidental, but within the last couple of weeks, my cousin told me about a truly diabolical plan for election ‘optics.’ He is a Longshoreman in Texas. His union was considering going on strike for the sole purpose of allowing BHO to intervene and settle the labor dispute and look like either a uniter or maybe even tough on unions. So, when I saw that Rahm’s teachers went on strike in spite of a 16% pay raise offer, my mind went places that logic would never take it, but modern day politics do. Worth watching anyway. Also, to protect my cousin from retribution from union thugs, I suppose it would be best to avoid attribution here.”
Sounds a bit contrived, but who knows? Under Obama, we’ve gone to a lot of places where logic would never have taken us. . . .”
Sad that as I was typing this, I had a similar thought but rejected it because it seemed so outlandish. But if David Axelrod can try to get Gallup to change it’s polling to skew in favor of Democrats anything is possible.
By the way, here are the Noble Schools in Chicago. They are outperforming the public schools at lower costs.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.
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Jeffrey Carter is an angel investor and independent trader. He specializes in turning concepts into profits. He co-founded Hyde Park Angels one of the most active angel groups in the United States in April of 2007. He previously served on the Chicago Mercantile Exchange Board of Directors. He has done market commentary for (More...) -
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