From today's News-Gazette:
Illinois still has one of the most chronically underfunded state pension systems in the country, but a potentially bigger problem is looming: the health care bills for all those retirees.
According to a 50-state study released by Pew Charitable Trusts on Tuesday, Illinois' unfunded pension liability for state workers, judges, lawmakers, teachers and university employees was $41 billion in 2006, while its projected bill for retiree health care, dental and life insurance benefits was an estimated $48 billion for state workers alone.
"We produced this report because states' fiscal health relies in large part on their ability to wisely manage bills that are coming due, and this one is significant," said Susan Urahn, managing director of the Pew Center on the States.
For the first time, government accounting rules will require states to include estimated actuarial liability for nonpension benefits like health, dental and life insurance in their annual reports starting in 2008. But the analysis of Illinois' liability for those benefits is still being developed, and will not be ready until early next year. As a result, Pew used an estimate from the Civic Committee of the Commercial Club of Chicago in its report.
Discuss.
we had some discussion on this site about moving state employees to 401k-type plans from the pension plans, looks like it could be time to eliminate this very expensive perk also. How many private employers are still providing retiree health care?
The problem isn't the pension benefits... it's saying you are giving the pension benefits, not putting in the required money for 20 years, taking that debt as income so we have a "balanced budget" and pretending the problem doesn't exist for a few decades while bankruptcy looms. The liability wasn't created because the benefits were too big, it was created because Naomi and her Chicago friends kept shorting the fund to pay off their Chicago pals and even once dipped into the fund.
The only thing a 401k would fix is hopefully make it impossible for the state to dip into the pension fund.
"The only thing a 401k would fix is hopefully make it impossible for the state to dip into the pension fund"
Pardon me, but isn't that a GIANT leap in the right direction? This should not be marginalized. Whatever the extent of the retirement benefits, you are paying in the current year and eliminating opportunity for mismanagement. That is two giant steps in the right direction.
"The only thing a 401k would fix is hopefully make it impossible for the state to dip into the pension fund."
It would also give the employee ownership of and control over their retirement, instead of relying on a company staying solvent and honest. Imagine how different things would been if Enron's employees had 401ks rather than pensions.
These are pretty outstanding benefits for public employees at the tax payers expense. This type of debt is simply unsustainable. There are scant few private employers offering FULL PENSIONS and FULL HEALTHCARE after retirement age. I heard a blub on the RADIO last night, that a PEW STUDY indicated the ILLINOIS pension debt was actually closer to 100 BILLION? How in the world can FREICHRICHS and NAOMI even speak of capital spending plans with this huge imbalance?
Normally I wouldn't comment, but it's annoying me this morning: What's with the random capitalization of words?
And I think you're referring to Sen. Frerichs.
There seems to be a lot of confusion regarding the State pension plans, particularly SURS. Participants in these plans do not pay into Social Security first and foremost. This is their only mandatory participation retirement plan—like Social Security. There are other options like the 457 deferred compensation plan for state employees or 401k plan through the University. However, they are supplemental plans not the main retirement plan. If you spend your working life somewhere (company/state/private business) they should be a partner in providing you a secure retirement…period. These plans are not some bloated perk.
Regarding Enron, the big problem there was that the company cooked the books. They mislead employees who then bought Enron stock thinking it could do no wrong. Well, we know the rest of the story. Most likely, they did have a 401k plan which allowed them to purchase Enron stock directly. Whether or not they had a 401k wouldn’t have helped them anyway since the company’s entire financial situation was based on malfeasance. Using Enron as a prime example for converting SURS et al to a 401k plan is a red herring.
All this debate about converting from a defined-benefit plan (a traditional pension) to a defined-contribution plan (a 401k) is seemingly an easy fix. However, if you delve deeper you find that it’s smoke and mirrors.
Defined-benefit plans (i.e. SURS) are run by professional actuaries and have historically posted very good returns. Participants of DB plans do not chose their own investments, unlike 401k plans. Defined-benefit plans are well-diversified and have many investment vehicles which are not available to the average 401k plan. The average 401k may have a dozen choices. However, the more choices in a 401k plan the greater the confusion for participants and, more importantly, the higher the cost for the company/state—so they keep the choices lean. The professionals who run the defined-benefit plans are not bound by that and have the time and the ability to evaluate the best options. If you look at the annual reports from SURS you see they do an excellent job of growing assets to provide an honest retirement for its participants. The problem is the lack of consistent state funding not how SURS works.
I urge you to visit SURS website www.surs.org and read their Advocate newsletter. The SURS annual report highlights what exactly SURS is invested in and current/historic returns. Or, better yet, give them a call.
Here are two very good articles detailing how converting the system to a 401k would be a detrimental option.
http://www.sj-r.com/sections/news/stories/113955.asp Illinois urged to stay with pensions. Study says 401(k) would cost more.
http://www.afscme31.org/cmaextras/IRSIreport.pdf
The problem with the State pensions is that the State has not put their 6% share of everyone's salaries into the system when the liability is accrued. The 6% taken from the salaries is invested. If they did not have the defined pensions, they would be paying into Social Security, and then the State would have to pony up every quarter. They would also presumably have a match on a 401(k) that would have to be paid in a timely manner. The high cost of the State's pensions is not due to the type of pension itself but to its being allowed to be underfunded for so many years.
As to the insurance, do you think retirees should not have insurance??? We have the same plan we had when we were working except when we turn 65 we have to go on Medicare and the State insurance becomes a supplement but I believe the cost is the same. Private insurance is not affordable for working people so who would retirees be able to afford insurance on the open market. Staying in a large group plan only makes sense.
I think I have said most of what has been said in the last two posts which may say it a little better (spell it better also). I would also add that the problem has been that the state has not been putting their share in the pension fund which has caused the short fall in the retirement system. Then what would happen if they made it a 401K and the state did not make their part of contribution? Many people work for the state or University not because of the pay but because they have good benefits. If we are now are going to change the benefits the state and University will have trouble attracting good employees, the university already does in some classifications because they pay below market value.
"If you spend your working life somewhere (company/state/private business) they should be a partner in providing you a secure retirement…period."
A company that provides matching contributions or fixed amount into a 401(k) account is helping to provide a secure retirement...period.
The SJ-R article was poorly written. The costs of managing a 401(k) account are 3-6x more costly? I don't believe this for a second when my plan for my company doesn't cost me a dime. Even if true, administration costs relating to an employee's retirement account can be charged the employee, not the taxpayer. I hear arguments for charging user fees to those using the services all the time from govt bureaucrats, let's exercise that logic.
Look at where we are. Deep in debt with unfunded pension obligation. If there is any lesson to be learned, it is to take money out of the hands of fiscally-irresponsible bureaucrats wherever possible. The 401(k) solution is a no-brainer. The govt has enough challenges. Let's take this off their plate and stop focusing on problems we don't really need to be dealing with in the first place.
I don't see how you can have a 401(k) plan that does not cost you a dime. My office switched from a defined benefit plan to a 401(k) four years ago. (Saved the owner a ton of money and he told us this would be "better" for us). The company pays a huge fee (much higher than under the old plan) to the plan administrator who makes sure everything meets all the federal guidelines. The money I contribute is charged a fee by the "wealth managment" ccompany that actually invests the money, PLUS there is a fee charged by each fund each time a purchase is made (every 2 weeks). The fees mount up very quickly and the funds have all lost a lot of money this year. I would be better off just putting more money in my own money market fund that has consistently paid an average of 5% all year! Fortuneately, my husband has a SURS pension!
I lied on accident. It costs $10/person/year.
How does a company pay a huge fee? Can you provide more detail. I'm getting conflicting accounts from my benefits provider.
I took special note how your owner saved a lot money. It made me think that taxpayers would also save a lot of money if the govt went the same route.
Curious, what's the turnover like at your husband's job?
I was paying the bills for the company when we made the switch. Under the old plan we paid the administrator $800 per year (we had 5 employees then). When we made the switch the annual cost went up to $2,500 per year. I do not know what it is now, I no longer pay the bills.
My husband is retired.
By the way, my personal financial advisor says the company I work for is paying too much to the adminsitrator (and guessed who it was) and that we should not be paying fees to the "wealth management" people, that they should be paid by the people we invest with. But I do not get to make these choices. I just have to live with them. I have paid in 5% of my salary all year, plus a 3% match from the employer, and I now have $1,500 less in total assets than I had on 12/31/06! The point is, 401(k) plans are not all created equal. Some have good investment choices and low fees, others have lousy choices and high fees. I'm old enough I'm considering quitting my job just to get what money I have out before it is all gone!
B is for Business said:
The SJ-R article was poorly written.
Perhaps the AFSCME report would better suit you style-wise. The SJ-R article contains a brief synthesis of the info within that report. I used the SJ-R as illustrative that it's not just obscure organizations talking about this.
The costs increase because 401k participants can trade mutual funds, or company stocks (if they are working for a public company) in their accounts. A defined-benefit plan is run by actuaries, CFAs, etc. The employees don't cause the churn that adds so much to 401k expenses, because they are not allowed to jump from one hot fund to the next. These expenses aren't always a line item on your year-end statement. They include trading fees, mutual fund expense fees among other "hidden" charges.
Since B is for business, perhaps you know that in E for economics there is no such thing as a free lunch. I seriously doubt your plan administrator (Fidelity, Vanguard, Janus, MassMutual, whoever) is giving you services gratis or for only $10/person. Be that as it may, from a business standpoint, the issue is that the government spends more than it takes in and doesn't pay the obligations it is legally required to pay. It moves the pieces around in a shell game. Inputs do not equal outputs. That's about as Business 101 as you can get, B.
“Look at where we are. Deep in debt with unfunded pension obligation. If there is any lesson to be learned, it is to take money out of the hands of fiscally-irresponsible bureaucrats wherever possible. The 401(k) solution is a no-brainer. The govt has enough challenges. Let's take this off their plate and stop focusing on problems we don't really need to be dealing with in the first place.”
This sounds like you would like to punish the employees for something the Employers (GA & Governor) have done which is rob the employees and the taxpayers of retirement payments and the under funding problems of the retirement program(For general fund spending). I would suggest having the corrupt GA and the Governor taken out of the equation and let SURS et al do their jobs and maybe the problem would be solved.
I cosign. The public pension discussions seem to devolve into blaming (subtly or not) the state/university employees for having health care and pensions. It's as if the accusers view state/university employees as the only ones who should not have insurance or the ability and means to enjoy the fruits of their labor.
Yet, if the accusers ever had their retirement benefits threatened they would be the first to voice outrage. I don't get that.
Given that pension protection for the state employees is written into the State Constitution, a switch over would only be able to be applied to those employees hired after the change over.
It would be many years before any change would make any difference at all inthe state's financial picture because the current employees would not switch to the new system and work finish their careers under the defined benefit system.
A few things:
There was an interesting post awhile back that mentioned it was, " curious" that we get so caught up in the grammar, spelling, etc. of posts on blogs". Point is the message, not the delivery system....picky, picky.
This subject was discussed in detail in an earlier B for Business blog thread. Pile of Money, etc. were included in those discussions.
Everyone should take a peek at that post then respond here.
Another huge problem is the failure of our leadership to deal with the HUGE problems, but tending to the minor, but vote enticing problems, like smoking, having to move out of the fast lane on the expressways, etc.
All elected officials should be finding a solution to this HUGE obligation and damned quick. The Constitutional required drain of tax resources to meet these obligations because of weak leadership will affect all portions of our economy and for everyone.
I suspect that unless something is done, instead of finding solutions to these difficult problems, the same weak leaders will be enacting ordinances to prevent people from drinking within 15 feet of an retirement fund office.
Because drinking might be the only solution to an "Ordinary Joe" when his tax bills come due.
I am still considering going to Springfield with a truck load of testicles and pass them out at the chamber doors. Seems like no one has any to make the tough decisions.
To that end, I am, and shall always remain;
Rex Bradfield
"There was an interesting post awhile back that mentioned it was, " curious" that we get so caught up in the grammar, spelling, etc. of posts on blogs". Point is the message, not the delivery system....picky, picky."
My point is: I get your point without the random capitalization of certain words. I mean that constructively; please take it as such.
As for correcting your spelling of Sen. Frerichs' name, you mangled it so badly that I wanted to be sure you knew how to fix it. Again, please take it constructively.
To everyone suggesting SURS employees simply switch to Social Security... what gives you the idea that Social Security is any more solvent? I think it's pretty clear the federal government will be basically bankrupt on that obligation around the same time the state is bankrupt on the pensions. At least with SURS, when I leave the University I can take the entire pension balance out and do something productive with it.
"Since B is for business, perhaps you know that in E for economics there is no such thing as a free lunch. I seriously doubt your plan administrator (Fidelity, Vanguard, Janus, MassMutual, whoever) is giving you services gratis or for only $10/person. Be that as it may, from a business standpoint, the issue is that the government spends more than it takes in and doesn't pay the obligations it is legally required to pay. It moves the pieces around in a shell game. Inputs do not equal outputs. That's about as Business 101 as you can get, B."
Nothing is free, I'll give you that. It is tough to interject an argument of economics when you're talking about pay to government employees. The laws of supply, demand, and price are all ignored in government. If they were, new government employees would not be getting pensions. Some may argue that the voters (customers) keep things in check, but this is not reality.
"This sounds like you would like to punish the employees for something the Employers (GA & Governor) have done which is rob the employees and the taxpayers of retirement payments and the under funding problems of the retirement program(For general fund spending)."
Who did AFSME endorse for governor the last two elections? Who did they endorse for State Senator this past election? Who did that State Senator work hard to get elected to Governor? I have no sympathy for bureaucratic orgs that work hard to elect fiscally irresponsible bureaucrats to manage our money and then (on top of that) expect taxpayers to dump more money to a general fund to cover their pensions. It's almost as if it is done on purpose using that "required by law" argument to ignore the current obligation to spend money in other places. The taxpayers will have to pay for it ultimately as required by law, so why worry about funding it. I'm not going to blame the employees, but I'm not going to extend a whole lot of sympathy at this time. They fool you once, shame on them. They fool you twice, shame on you.
One interesting report I'd like to read is the political contributions by AFSME, not the argument that they want to preserve their pensions.
"Yet, if the accusers ever had their retirement benefits threatened they would be the first to voice outrage. I don't get that."
If you were fighting to have pension control taken away from those who are abusing in the first place, I would feel sympathy for you. A defined contribution plan, as opposed to a defined benefit plan addresses that. If a 401(k) does not work for you, at least take it out of the hands of the governor. If people are going to argue for pensions to remain the same and simply argue they magically need to start being managed correctly, I will be less inclined as a voter to feel sympathy for you. I will have zero sympathy for people when I reach retirement and we're still talking about the same thing.
"However, the more choices in a 401k plan the greater the confusion for participants and, more importantly, the higher the cost for the company/state—so they keep the choices lean. The professionals who run the defined-benefit plans are not bound by that and have the time and the ability to evaluate the best options. If you look at the annual reports from SURS you see they do an excellent job of growing assets to provide an honest retirement for its participants. The problem is the lack of consistent state funding not how SURS works."
In theory the SURS plan may not be a bad idea. In reality, we can look at the budget and see how costly a pension really is. The cost of switching to a 401(k) will be most costly because we're going to have pay down both current and past liability at the same time.
Personally, I would be outraged and I would be lobbying for my share of the pension to written to me in a lump-sum payment so that I can transfer it to an IRA and then lobby that future retirement benefits be paid on time. Alternatively, I suppose I could have taken the simple route: (1) rely on burocrats and hope that my money will be there (2) rely on simple actuaries (3) hope the voters will keep my pension on the top of the priority list the next time this happen (4) fight for and rely on laws that will insulate me.
Even if does cost me a little more, I want my money in my control.
What would my and other SURS member’s benefits be from SS after not paying into it for years, would others complain because they are making up the difference in our benefits?
Can you please explain? I don't understand the question.
B is for Business said:
Even if does cost me a little more, I want my money in my control.
Please explain…how does losing more of your money through costs give you greater control? That doesn’t make sense.
1. I'm not conceding the costs are more. But even if it did cost a little more...
2. I pay fees for services, you should pay fees for services. If you are "losing" money, I am gaining it.
3. I have control of my money when it is in my bank account, under my exclusive control, and bureaucrats can't spend it. How can this not make sense?
4. The taxpayers are losing money on your pension and we can put an end to it. Whether or not it is your fault is irrelevant, it is my burden.
.Imagine how different things would been if Enron's employees had 401ks rather than pensions
I thought I remembered Enron's plan being a 401(k) so I Googled "enron retirement". It was a 401(k) plan but the company match was in Enron stock, not cash, and employees were encouraged to invest their contributions in company stock also, based of course on fautly financial statements about the health of the company.
yeah, Enron is not an example to advocate for 401k's. The employees kept seeing their balances skyrocket with the Enron stock, and were encouraged to put more and more of their money into the stock. When the company crashed, they not only lost their jobs, they lost their nest eggs.
Redsate,
That [Enron situation] is a function of employee fault as well as Corporate mendacity. It can be easily rectified by simple honesty and good advice.
The defined benefit pension plan is an invitation to engage in a moral hazard.
First, you are told that collectivized resources are going to be able to take care of you in the future. The result is simply going to be less personal savings. It's human nature.
Second, you have to rely on the fund managers to be honest and forthright people. That may be reasonable, but these folks are sitting on piles of money with very little effective controls on them. Some might take their fiduciary responsibility seriously, but again, think of human nature. The "great big pool of money" hazard is too big for most institutions to ignore. They eventually will find a way to throw business to a friend, invest in something they ought not do, and when the get in trouble, they are likely to double down by trying riskier investments to make up for mistakes.
Third, look at at the operation of all these human traits in regards to public pensions. "End of Career" bumps are actuarily impossible. The lump sum pay-ins are never enough to cover 10-30 years of artificially inflated payments. Teacher's Unions and AFSCME buy the legislature, the legislature gives away the store, the taxpayer pays the bill, and there is no way to lower the bill because the Constitution 'guarantees' the ill-gotten benefits.
The entire process is corrupt on its face, yet perfectly legal. The result is a state that is approaching bankruptcy, and a population approaching a boiling point. All the AFSCME literature notwithstanding, there isn't enough tax money in the state to fund the obscene promises that have been made.
401(k)s are not perfect, but they remove the moral hazard by putting the responsibility where it belongs, on the individual. All the other issues (Enron, Nest eggs lost through bad luck in market timing) can be addressed.
Collectivizing resources so that the politically connected and morally corrupt can plunder them isn't a workable strategy. It is bad national and bad individual policy.
The pro-Defined Benefit forces here are raising some pretty good issues which pro-401K people need to address.
It would be good to get some honest research. (CTBA is questionable in that regard. I'm digging into it, and it has a few items that bear close scrutiny.)
In theory, defined benefit plans might be able to save money on "transaction costs" and management. But to find whether this is really true, you have to look beyond merely the 'administrator' fee. What are the costs INSIDE the plan? Does that admin fee cover all the trades and transactions made by those who manage the money?
If someone has a 401K and churns in and out of funds and sectors, it is entirely possible that the costs for admin will be higher. This can be addressed by many of the new options that basically put your funds on auto pilot. You can now get funds that change the investment mix by your targeted retirement date.
Since I brought up the notion of "moral hazards", the propensity of the investment community to churn millions of accounts certainly qualifies as a danger on the part of those advocating 401(k)s
There really is no substitute for an informed consumer and electorate.
At the end of the day, the existing government system (guaranteed benefits doled out based upon political clout) is unsustainable in any circumstance. 401 ks aren't perfect, but they fix that problem.
Third, look at at the operation of all these human traits in regards to public pensions. "End of Career" bumps are actuarily impossible. The lump sum pay-ins are never enough to cover 10-30 years of artificially inflated payments. Teacher's Unions and AFSCME buy the legislature, the legislature gives away the store, the taxpayer pays the bill, and there is no way to lower the bill because the Constitution 'guarantees' the ill-gotten benefits.
You left off the "early retirement" incentives :-)
Some thoughts on quick fixes...
1. Abolish all health coverage for retirees in the last 5 years, sliding down to better coverage for those who didn't get the benefit of obscene "end-of-career" bumps. If they got the unwarranted bumps, let them use their booty to buy their own healthcare. Pensions may be guarantteed, but health coverage isn't.
2. If you are earning money, you aren't retired. No payments to people who 'retire' and then work. (this will involve a court decision as to what "guarantee" means)
3. Vote for a Const. Conven. - abolish the guarantee for new hires and those not vested, while keeping the promises made to those vested. The IL guarantee operates as a license to steal. Revoke it.
____
Some thoughts on the AFSCME/CTBA propaganda piece....
Generally decent information with some huge howlers.
The "average" $17,000 figure for retirees is completely meaningless, as it is an aggregate that ignores the massive benefits of the new retirees. I want to see a breakdown of which cohort of retirees is getting what. It would be great for the Illinois voter (not to mention people who retired 20 years ago) to see just who is getting how much. If our former superintendent is getting an artificially inflated $150-170K, (NOT AN EXCEPTION, BTW) just how many people are getting less than $17,000.
It would also be useful to see a projection of the upcoming years. The panic must be setting in as actuaries and financial analysts see a tidal wave of red ink.
Not being a fan of big government and massive public employment, I can only feel good that AFSCME and the teachers/Administrative unions have created seeds of their own destruction. The only way to fund their largess is to depopulate (or pimp over) their next generation of employees.
Particularly in regards to education, it would be a wonderful irony to see school choice brought about by the unwavering greed of the education industry. Pigs get fat, hogs get slaughtered, and the Illinois political class is a breed of hog as yet unseen in America.
Now I've been called "selfish" and "greedy" in the space of a week--first by the Local School Council and now on this blog.
My back is still hurting from breaking up three fights yesterday. I stayed until 7:00 every night this week, except today as they closed the school at 4:00.
I took my job with certain understandings. I will work it as long as I can, but I probably can't do it forever. I don't really ever check my paycheck, so I'm not that interested, however, I do expect the state to follow through on its promises it made to me when I agreed to take the position that I had been told has the lowest life expectancy following retirement of any professional jobs within the city of Chicago.
Of course, we do have a horrendously bad existing school choice program. I would love to see a better one, as long as it actually provided school choice and not merely the choice for the working-poor to send their kids halfway across the city to compete against students with more resources and a fraction of the commute.
Why not provide choice AND equity in funding. Look at Japan where funding is equal--it seems to work there.
People seem to want all the service's they just don't want to pay for them.
I'm curious who you are talking about. Certainly not people who negotiated terms of employment.
Let's imagine a scenario:
You go to pick up your paycheck and it's $700 short. You complain and a casual observer says, "Some people just seem to want free money!"
You worked for that money, it was a negotiated part of your compensation. The only crook is the person who didn't follow through on that commitment.
The current education system is completely unable to staff its classrooms with highly qualified teachers. Anyone with a scrap of business intellect knows that demands higher compensation, not lower compensation.
This isn't a personal issue--I would happily work for my current salary if other teachers were hired and paid enough to reduce class sizes and increase productivity on the part of other teachers, and I could just get a nice letter saying, "Thanks for your 60-80 hours a week, you deserve ten times what you make!"
Xian-We are on the same side on this one. I think we are funding state and local services out of our pensions and with lower pay increase's for employees. The rest of the citizens of the state don't mind because that means they don't have to pay more in taxes. I like my job I like helping the U of I and its students but I am concerned about the future of the University and the service's of the state as the potential employees look at the Pay and benefits and say it just not worth the headaches and choose to work other places.
Yeah, I think that's true. It's interesting too--the model seems to work in terms of attracting better employees for less salary, but fails in the incompetence of management. I feel like most units and departments have a good handful of over-hardworking, over-qualified folks getting paid way below what they are worth, and a group of folks collecting their checks and playing minesweeper.
xian and Run
No matter the sometime differences we have on issues on this site, you guys have my complete respect and admiration. I remember the name of every teacher I had, and owe them so much.
A personally rewarding profession and desperately underpaid essential cog in our nation.
The Pension fund raid was one of the primary reasons I ran for State Rep. I was appalled that Naomi voted to take it and was more appalled that she was saying taking the money made the pension stronger. Puke.
I am almost certain, that the pension fund raid, tolled the bell for the fund as we know it, as that 2.5 billion dollars would be somewhere in excess of 50 billion at maturity. Hard to replace that kind of loss.
To that end, I am, and shall always remain;
Rex Bradfield
Xian wrote:
I'm curious who you are talking about. Certainly not people who negotiated terms of employment.
Fair enough, but those negotiations take place on a playing field where the taxpayer has no negotiating power. (please spare me the notion that the Superintendent and Board represent the taxpayer. Any board member show tries to is quicky marginalized.) We can't break a strike. We can't use initiative to get a tax cut on the ballot. We can't fill a classroom with parents or substitutes while a strike is taking place. etc etc.
That said, yes, the state should pay into the system as promised. It is still open to debate whether that would solve the shortfall. This isn't just teachers. Talk to some mayors and trustees. The benefits are being showered on municipal employees as well. At some level, the rate of growth becomes unsustainable.
Xian wrote:
This isn't a personal issue--I would happily work for my current salary if other teachers were hired and paid enough to reduce class sizes and increase productivity on the part of other teachers, and I could just get a nice letter saying, "Thanks for your 60-80 hours a week, you deserve ten times what you make!"
My heart pumps peanut butter for you. How does hiring more people to do the same work make you more productive? Productivity is measure by "output / man hour" How do you measure educational output? If test scores are no good, is it merely the number of schools, teachers and administrators? I'd love to work in an industry where I could ignore the "output" part and just point to expanding "man hours."
If a 24 year old can teach a class of 30 to read for $35,000 to 40,000 /yr, why should district pay 2 50 year olds $60,000 to do the same thing (BTW, this goes on all over the suburbs, and it wouldn't surprise me if Champaign had the same experience, though perhaps at lower numbers) If a $40 interactive program can teach a kid to read, why even pay a teacher? Just who is productive, and who isn't?
Everyone here knows all about the individual stories of all your hard work. The aggregate numbers across the US tell a different story. For anyone interested in aggregate productivity facts and figures over teacher anecdotes, go here. This is from 1996, before the salary and pension explosion. I'm currently looking for more up to date figures
I know. It's blasphemy to most everyone. Why, to attack the "education industry" compensation is to attack Mom, America, and apple pie all at the same time.
Back to pensions...
I realize that I'm likely in the minority, but I stand by my proposition that the Defined Benefit Pension plan (public or private) is a moral hazard. To illustrate, just witness the sense of entitlement they generate here on this blog post. No reasonable person disagrees with the proper payment of contracted benefits. OTOH, pensions drove United into bankruptcy (more are coming down the pike), and now the taxpayer is on the hook for corporate incompetence.
Every Illinois taxpayer is going to be on the hook for levels of benefits that were "negotiated" out of the sight and mind of any one person responsible for actually paying them, all based upon a guarantee (see IL Const.) that virutally no one knows about.
The most important benefit to moving to a 401(K) style plan, therefore, is that the costs and responsibilities are known up front, and not passed by a political class that knows that no one is paying attention.
That said, yes, the state should pay into the system as promised. It is still open to debate whether that would solve the shortfall. This isn't just teachers. Talk to some mayors and trustees. The benefits are being showered on municipal employees as well. At some level, the rate of growth becomes unsustainable.
Let's start with the first part before we start stealing from the state employees, how about that. If the state was a private employer and shorted its Social Security payments the owners would go to jail. One last thing California which did not make the same shortsighted decision to short it's payments to it's retirement funds which are not only fully funded but now has enough money to make it payments without more payments from the state budget. So is it a question of sustainable or bad decisions by our leaders.
If a 24 year old can teach a class of 30 to read for $35,000 to 40,000 /yr, why should district pay 2 50 year olds $60,000 to do the same thin. If a $40 interactive program can teach a kid to read, why even pay a teacher? Just who is productive, and who isn't?
To extend this logical travesty to what must be a very noble and difficult profession compared to teaching....If a radio station can get some 24-year-old to run a 2-hours/day radio talk show for $20,000/year, why should they pay you more to do the same thing? Clearly experience doens't matter in any job, and we should just replace all skilled professions with temps from Manpower.
I realize that I'm likely in the minority, but I stand by my proposition that the Defined Benefit Pension plan (public or private) is a moral hazard. To illustrate, just witness the sense of entitlement they generate here on this blog post.
I'm assuming you feel that Social Security is a moral hazard as well. Pension plans are not a "moral hazard", no matter how hard you try to paint them as such. What is a "moral hazard" is the fact that at all levels, employers have been allowed to underfund them. It wouldn't matter if it was a pension, 401(k), IRA or even a Certificate of Deposit....they're still not getting the funds they are required to.
OTOH, pensions drove United into bankruptcy (more are coming down the pike), and now the taxpayer is on the hook for corporate incompetence.
No, what drove United into bankruptcy is the exorbarant salaries they chose to pay their executives and poor cost controls. It's really hard to say "we can't afford to give you what we promised because we've gotta pay our Associate Vice President of Food Service $350,000 and our CEO $39.7 million." (I'm not making that last number up, Glenn Tilton really did receive that much, as well as the rest of senior management getting stock options worth millions each.)
For those who keep screaming that a 401(k) is the solution, you do understand that 401(k) and pension plans are not comparable things, right? Programs like SURS are better compared to Social Security. I'm certain you also understand that by eliminating programs such as SURS that you will be moving those employees back into the Social Security system. If you understand these two facts, then explain how switching from one program that the state is not adequately funding (like SURS or TRS) to Social Security that they will just as easily NOT fund addresses the problem. How does switching to a 401(k)-type program address them underfunding that as well? But I guess this is ok in your minds because it's just the employee getting screwed. Did your previous consulting work include financial advice for Enron?
Out of curiosity, especially for those who believe that a 401(k) type plan is the magic bullet that will give everyone loads of money at retirement has anybody actually calculated out how much will be in their 401(k) at retirement? If not, I highly suggest that you do so, and tell me if you really thing all that money will last you for a full retirement. I check my 403(b) fairly often, and I'm not confident that it will last for the full run of my life, and I'm glad I'm not stuck with that as my only option.
If a 401(k) plan works for you, that's fantastic. Many pension plans are defined benefit, but many more of them have the option of doing defined-contribution or self-managed with their pension plans. For those who want to take that high-risk/high-reward option, more power to them. I don't want that, though, and I shouldn't need a degree in finance in order to ensure that I can retire in my 60's.
My heart pumps peanut butter for you. How does hiring more people to do the same work make you more productive? Productivity is measure by "output / man hour" How do you measure educational output? If test scores are no good, is it merely the number of schools, teachers and administrators? I'd love to work in an industry where I could ignore the "output" part and just point to expanding "man hours."
You misunderstood. The turnover rate is right around 50% for non-tenured teachers. That's in a profession where the vast majority of people suck their first year or more in an environment. The argument was not to just hire more people. It was to make the profession more attractive and recruit to retain better folks to address the very problem you are complaining about. I apologize if that was unclear.
The output MUST be measured and accountability must be present on all levels. That smart people are still shouting "TEST SCORES!", however, shows how poor our grasp of the problems plaguing our school system is.
If you'd "love to work" in this industry, please do. We certainly need more good folks, and there's not a more vital job in existence. The complete breakdown of American democracy we are facing can be laid entirely at the feet of our education system, and its failures are not merely the responsibility of the teachers or students, but yours as well.
Arvid,
1. People are noble, professions are not. The ideology that one is noble merely because they teach is one the deserves to be questioned, if not jettisoned outright. There are loads of crappy teachers. Fire them and use the money to hire good ones.
If a radio station can get some 24-year-old to run a 2-hours/day radio talk show for $20,000/year, why should they pay you more to do the same thing?
2. The implications in your sentence above illustrate how deeply the 'sense of entitlement' pervades your industry (I'm assuming you are in the "education industry" or government). I work for next to nothing in Radio. Some of this is due to circumstances specific to me, but it is mostly the nature of the industry. 1000s of people would work for free just to have the airtime, and if they could prove to my boss that they were better than me (get more listeners and ratings), I would be gone in an instant.
Given that education (really - "an educated populace") is so much more important to our culture than "infotainment", the education industry should be EVEN MORE subject to competition than mine. If I could walk into a classroom and do a better job than the person there, then society will benefit from the competition if the people currently in place know that they have to produce and perform.
Clearly experience doens't matter in any job, and we should just replace all skilled professions with temps from Manpower.
3. Whether experience matters or not is a function of the market, and not a bureaucratic diktat. (a quick look at the "Masters in Education" pay bump scam is a good example). While it is clear that we see the world in different ways, I'll agree that no one should be subject to arbitrary and capricious firing if you could agree that no one deserves a protected job in a protected industry from cradle to grave.
As a taxpayer, I have a right to advocate for a less expesive education system. If temps from manpower can increase reading scores faster than the existing system for less money than the existing system, there should be absolutely no barrier to letting them try. If K-4 or K-6 can be taught by a DVD, then we have more resources to apply to High School age kids and Community colleges.
What boggles the mind is that so many people can't even conceive of the opportunities in deregulating the education industry. We are all so focused on "building campaigns", 20 year plans, which Springfield-based "funding formula" to use, and other silly excuses for adults to push paper - that we have totally lost sight of creating that "educated populace" we all say we want.
Experience matters a great deal, but not when divorced from accountability and competition.
No, what drove United into bankruptcy is the exorbarant salaries they chose to pay their executives and poor cost controls.
Actually, no. For my part, I think the CEOs at United deserved to be fired for their incompetence, and the pay packages for CEOs of failing companies are a travesty. That said, companies the size of United don't go bankrupt based upon $39,000,000. or even $390,000,000. They made promises they couldn't keep, and they used the Feds and Courts for a bail out.
They should have been put of business, with the planes, gates, ticketing systems and other assets sold off to pay for sloughing off their problems on the taxpayer. The executives should have gotten nothing.
Programs like SURS are better compared to Social Security.
Partially accurate, but hardly a ringing endorsement. The SURS at least has assets and (for now) a constitutional guarantee. Soc. Sec. is a drawer full of IOUs that AGAIN, must be picked up the taxpayer. The money is long gone ("invested" in Cabrini Green, Robert Taylor Homes, Bridges to Nowhere, Viet Nam, The Deep Tunnel Project, Gulf War 1 and 2). Unlike SURS, the Supreme Ct has already found that you have absolutely NO PROPERTY RIGHT to a dime of So. Sec.
Look Arvid, as some one who thinks 401(k)s are better than defined benefit plans (from a policy and taxpayer perspective), I agree with you that they are not a silver bullet. (see my long posts above) That said, the existing system in Illinois is clearly unsustainable.
When families, businesses, and individuals take in less than they make, they either go bankrupt, cut spending, increase income, or borrow (short term) to cover the gap. As a private citizen, I've heard decades of verbiage about "belt tightening", cutting expenses, shorter vacations, smaller homes and "doing with less."
It is time we placed the same restrictions on government. It is only fair.
Xian,
I've always appreciated your well-thought out responses, even if we disagree.
While I think test scores ARE part of the answer re: measurement, I'm sure that they aren't the only thing that should be considered.
As for me teaching, I'm working on some projects that don't allow for that right now, though some in my audience up in Waukegan would love it if I opened a school up there. Too bad the powers that be have capped charters in Illinois, as the opportunity for talented teachers to try new ideas and curricula are capped as well.
Maybe that is part of the 50% burn out you speak of. 1000s of noble young kids enter a profession to teach, and find an ossified bureaucracy, an oily administrative class, and "time served" union seniority dogma instead.
"I thought I remembered Enron's plan being a 401(k) so I Googled "enron retirement". It was a 401(k) plan but the company match was in Enron stock, not cash, and employees were encouraged to invest their contributions in company stock also, based of course on fautly financial statements about the health of the company."
Ah - thank you for the correction, and I apologize for my error.
Extrawise
Bravo, to you on your statement about CEO's, etc. I believe the best CEO, or President of a major corporation was Lee Iacocca. He made a huge difference at Ford with the Mustang and he pulled Chrysler out of the toilet with his firm hand and the MiniVan.
He was worth every penny they paid him but others, as you mentioned, are nothing but a drain on companies because they have no ideas. It is not their paycheck that hurt companies, it was their absence of gray matter, that killed the companies.
Experience is necessary in any business. Experience is the damper that controls unbridled exuberance. Until a person works for themselves, you never completely understand the benefit of having an experienced person available to you. In xian's case, I am sure that he found great benefit from being able to turn to an experienced teacher when some of his ideas did not work as planned. And I am even more sure of his ability to recognize the difference between the competent experienced teacher and the check drawing teacher.
In my case, having Gene Daily, P.L.S., P.E., S.E. was a God send. His knowledge, was wonderful and certainly changed my life. But later, when I briefly worked for another engineering company, they had a Department head, who was simply awful and should not have been remotely responsible for creative engineers.
If retirement systems are allowed to be run by the latter individuals, then we have the mess which we are presently seeing, but if sharp, creative and dedicated professionals are allowed to run those systems, they might have a chance of recovery. Obviously, politicians cannot run retirement systems. No experience, and too damned greedy in using that pile of money for personal political gain, rather than retirement.
To that end, I am, and shall always remain;
Rex Bradfield
Arvid said:
I'm assuming you feel that Social Security is a moral hazard as well. Pension plans are not a "moral hazard", no matter how hard you try to paint them as such. What is a "moral hazard" is the fact that at all levels, employers have been allowed to underfund them. It wouldn't matter if it was a pension, 401(k), IRA or even a Certificate of Deposit....they're still not getting the funds they are required to.
I think you’re not familiar with the term “moral hazard.†It involves a principal-agent relationship and the agent’s fiduciary duty. If you take enough business or law classes, you’re bound to encounter the concept.
Pension plans certainly create a moral hazard for both the fund and the employees. There are two relevant principal-agent relationships here (granted, one shouldn’t be, legally): employer-pension, and employer-employee. Since the fund can receive partial bailout from the PBGC, there’s moral hazard. Since employees receive the pension without any personal contribution, and after meeting minimal requirements, there’s moral hazard.
No, what drove United into bankruptcy is the exorbarant salaries they chose to pay their executives and poor cost controls. It's really hard to say "we can't afford to give you what we promised because we've gotta pay our Associate Vice President of Food Service $350,000 and our CEO $39.7 million." (I'm not making that last number up, Glenn Tilton really did receive that much, as well as the rest of senior management getting stock options worth millions each.)
For FY2002, UAL estimated (and, most likely, underestimated) that it owed $5.5 billion to its pension fund. I think that figure dwarfs the $39.7 million (which is an exaggerated figure of the out-of-pocket expense to United).
For those who keep screaming that a 401(k) is the solution, you do understand that 401(k) and pension plans are not comparable things, right?
Well, they’re the two primary employer-sponsored post-retirement benefit plans. I don’t know how much more comparable you want.
Programs like SURS are better compared to Social Security.
No, programs like SURS are more comparable to a 401(k). SURS is a 401(a), a defined contribution plan. Social Security is a pay-as-you-go system. It has no substantial similarity to either a 401(a), 401(k), or a traditional pension. The only relationship SURS has to Social Security is the 6.20% FICA exemption.
I'm certain you also understand that by eliminating programs such as SURS that you will be moving those employees back into the Social Security system. If you understand these two facts, then explain how switching from one program that the state is not adequately funding (like SURS or TRS) to Social Security that they will just as easily NOT fund addresses the problem.
Well, the State will have to pay Social Security. The Federal Government won’t let them get out of it. There’s actual oversight and legal ramifications for employers not paying FICA, unlike underfunding a pension.
How does switching to a 401(k)-type program address them underfunding that as well? But I guess this is ok in your minds because it's just the employee getting screwed. Did your previous consulting work include financial advice for Enron?
Under a 401(k), it’s readily apparent if your employer contributed to the contractual terms of your employment. They either matched as they said they would, or they didn’t. You can easily remedy the situation – file a complaint with the government, take them to court, or quit. You’ve lost, at most, 1 year of interest on their contribution.
With a defined benefit plan, none of this is true. You’re left with no options, other than crossing your fingers until your retirement.
If a 401(k) plan works for you, that's fantastic. Many pension plans are defined benefit, but many more of them have the option of doing defined-contribution or self-managed with their pension plans. For those who want to take that high-risk/high-reward option, more power to them. I don't want that, though, and I shouldn't need a degree in finance in order to ensure that I can retire in my 60's.
Except, nowadays, defined benefit plans are the high-risk option. As the pensions become a bigger burden on employers, they start to develop going concern problems. With a defined contribution plan, you can readily leave a company in time to save your retirement.
I’m not sure that “many more†pensions allow for defined contribution or self-managed plans. I’m pretty sure that most pensions are arranged through CBAs, thereby removing most flexibility.
I think most people are arguing that either a defined contribution pension or a 401(k) are better than a defined benefit pension. If you can provide a reason to the contrary, I’d be happy to read it.
It amazes me that so many self proclaimed experts on this blog gloss over the fact that 401K plans were never meant to be sole retirement accounts. 401K plans were meant to be supplements to defined benefit pensions. But the bigwigs at the top got greedy (imagine that) and phased out defined benefit pensions.
All this leads to is people working longer before retirement for less money once (if) they get to retirement age. Although to people like extrawise (I'm wondering when he's gonna start living up to his name), that's just the breaks in life. If you weren't born into wealth or stumble upon it, then you're obviously morally flawed and expendable. Screw all those greedy, lazy gov't workers.
Instead of discussing ways to manage costs or focusing on paying into the pension, the state is thinking about buying Wrigley Field. The theme of pension repayment could be "maybe next year."
I wonder who AFSME and the teacher unions are going to endorse this next round of elections?
B
You know when I was running, I was asked to be before the AFSME and teachers union and I came in there right after Naomi. She was there about 30 minutes out of 45 allowable and I was the last candidate. The questioned me for over an hour and almost all the questions were about the pension. Citing things that Naomi had said, expressing their disagreement with her philosophies, etc.
I said many of the things that have been said here....if you have payment obligations, then make them now, they were borrowing from a fund that charges 10% interest when they could have gone to the market and borrowed the same amount for 5%-6%. That type of thing. They were very gracious and complimented me on my ideas, without disagreement. Then endorsed Naomi.
I could not believe it, so I talked with some of the members. The problem was, if they did not endorse Naomi and the Dems remained in power, they would not get any break from the legislature. Political blackmail.
So there you have it. Again, no testicles. But again, it did not mean much in this District, because not a lot of teachers of AFSME workers live in the 103rd because of the way it is shaped. The majority of the union members could only vote for Bill Black or Chapin, or Shane. Wasted votes. I am telling you the membership was VERY hard on Naomi, but it didn't make any difference, because the pensions were not an issue in the 103rd, only in the other Districts, and the incumbents were against the raids and unchallenged anyway. The Districting had a bunch to do with it, along with the threat if the Dems remained in power.
A lot of good it did them, they are still unfunded and the Governor has not released any of the present education money either.
To that end, I am, and shall always remain;
Rex Bradfield
You had me at "Then endorsed Naomi"
I do not feel that I am screwing someone by not bailing someone out.
AFSCME has endorsed few people running in this coming primary because few of the elections are contested locally but if there is one you are interested in I can find out for you. I can tell you they don't like Blago.
B it is interesting to me that the state is trying to find money for a capitol budget but can't but wants to spend hundreds of millions to fund a Stadium?
I would have to check but I don't think AFSCME has endorsed Naomi in the last two cycles they just didn't endorse anyone in the 103.
Run you are correct, AFSCME did not endorse anyone, my mistake.
B
I am not sure what you mean, did I offend you?....if so I did not mean to.
To that end, I am, and shall always remain;
Rex Bradfield
No Rex, you did not offend me at all. You helped clarify my assumptions of unions.
I can understand why AFSCME did not endorse you. You probably had logical views on spending. It is the goal of any union to funnel money away from the taxpayer. It negotiates better-than-market salaries and benefits and then kicks back to the legislators who help preserve the funnel affect.
I looked online and AFSCME is a big organization. I'll bet AFSCME had a hand in getting Naomi elected and getting Blago elected. If by chance I'm wrong, I'd love to take a look at the people they did endorse state-wide and I'll look at what letter they have next to their name and how they voted on budgets in the past 5-10 years. The paychecks of AFSCME employees have a union fee taken out and that is used to preserve the funnel affect by elected heavy-spending bureaucrats to office.
The taxpayers have been whipped again and again by union negotiators. Pensions, construction rates, less accountability, little to no turnover, electing people to office who do nothing but spend money, etc. We are actually expected to feel sympathy and raise our taxes to fund union pensions? Instead of proposals to fix the problem, all we are hearing is more funding and fund, fund, fund.
America needs good teachers. As an attraction, they get to enter into a world of bureaucracy where you get paid for how long you've been there. You can only get a bonus if all of the other teachers get a bonus. That works well with a pension because you are paid relative to what you were making your last year. "You worked for that money, it was a negotiated part of your compensation. The only crook is the person who didn't follow through on that commitment. The current education system is completely unable to staff its classrooms with highly qualified teachers. Anyone with a scrap of business intellect knows that demands higher compensation, not lower compensation." On the other hand, more money can be the answer to the problem.
The truth is we can't go out and recruit top teachers and pay them more and/or signing bonuses because the union would not allow it. First, that wouldn't be fair. Second, that would imply there is a way to measure performance. I would agree that higher compensation might be a logical solution, but I'm not going to fund that idea while a union determines how that funding is managed. You cannot even give a teacher a bonus for good performance unless all the teachers get a bonus. It's almost funny.
B for Business-What was the increase negotiated for AFSCME LU 3700 members and what is their dues and what portion is used for political purposes?
http://www.afscme.org/press/16739.cfm
AFSCME to spend $60M to elect Hilary.
Actually, CPS is experimenting with merit pay as we speak. You coming up with an equally all-or-nothing approach does little to change the status quo. There are plenty of teachers fed up with the current union, but probably aren't going to follow anti-union reactionaries who assure us that good teachers will be taken care of.
I would love to see a measurement system that takes into account the education that students come into my classroom with, compensates teachers for longer hours and extra curriculars, and helps students receive more individualized instructional time with teachers who maximize the benefits of that time for the students.
However, when someone demands that I be accountable based on a non-contexualized system, it convinces me that they are insincere or ignorant of my reality or both and I'm probably not going to throw out the only job protection I have to follow them.
I'm spent my own time to propose better evaluation systems than "all kids are equally easy to teach and it's a total coincidence that no one wants to teach the kids in the poor, colored, violent neighborhoods" that are currently IN EFFECT. But the only response I get is more "teachers are lazy and stupid" comebacks.
Surely you can understand why I don't want accountability, when the evaluators appear to be ignorant?
How about evaluations from principals - merit pay within your building?
B for Business--I think you should know what you’re talking about before you start making wild statement you can't back up. AFSCME is a public service union they are going to lobby Federal, state and local government's on public policy that affects its members. Government has a big impact on our members directly both in pay and working condition. Poor decisions by elected official sometimes aren’t in the public’s best interests like we see in Illinois by Blago.
Just so you know the increase for 3700 or SEIU is 2.5% for a tight budget year that's not bad I have seen higher what’s sad is some folks at the U of I have not received any raises but hardly the huge raises you noted. We hardly push around the U of I or the state and get what we want.
AFSCME does indorse republicans and they also give them money. I hear them complain about Blago just as much as they complain about Bush. They will likely support more Dem's because more Dem's support their issues but it depends on the issue.
I almost forgot the state Council is supporting Obama we choose by a vote of our Presidents and People Chairs who we want to support and the 60 million you referenced does not come from our dues but from the “People program” a separate voluntary program not from union dues. Union dues are used for the cost of running the union, grievances, disciplinary hearings and arbitrations etc.
Unions should only be in the business of representing their members to their employers... that is it. The members remain free to use their powers as citizens to lobby the government or support candidates as they see fit. To have unions in that role is to all the unions to reach into the pockets of their members to support political policies and candidates that they may not support.
At its very core it is undemocratic and unamerican. Why should my money go to elect Hillary if I don't support her?
As I said the program is voluntary you don't have to be part of it you if you don't choose to. The program is separate from union dues if you are a member. However I think any group has a free speech right to get together and lobby their elected officials as they see fit just as the Chamber of Commerce does.
"Unions should only be in the business of representing their members to their employers... that is it. The members remain free to use their powers as citizens to lobby the government or support candidates as they see fit. To have unions in that role is to all the unions to reach into the pockets of their members to support political policies and candidates that they may not support."
What a wonderful idea----now if only churches would follow suit.
I would agree with you 100% on that one, Oil Man. My conservative donations have been supporting my liberal "mainline" church's lobbying efforts for too long.
As I said the program is voluntary you don't have to be part of it you if you don't choose to.
It is voluntary, but you have to take the effort to "opt out" - different from making the effort to "opt in". It beats not having a choice, but contacting your union steward for the form to get your money back can be a bit touchy.
I am glad I don't live in your dictatorship it seems like some rights are only for those you think worthy. I guess your right about churches though because the government has made it illegal for them to have free speech rights.
How about evaluations from principals - merit pay within your building?
Ideally, this would be good. But--and I don't mean to be rude--I think this is a little naive. Having braved the political trenches of being a teacher for awhile, it's hard enough to get people in the building to not hate you for working harding on behalf of the children, let alone hand you money.
I'd still rather this than the current system of having someone with no expertise or understanding evaluating my teaching.
I say this having experienced both extremes--an amazingly supportive principal who would support teachers and students at her own peril and a vindicative, nasty principal, who used personality conflicts to evaluate staff. Lest you think that I was merely being unreasonable, this was a person who would penalize people on the basis of their responses to sexual advances.
The former was eventually pushed out BECAUSE she supported teachers and students, and the latter, well, I'd rather not discuss it.
A school is a crazy, political place. I had an interview with one school ended abruptly because I asked, "Do you see any differring needs between students according to race or economic background?" Of course, that school was closed for not paying their teachers for 3 months...
Ideally, this would be good. But--and I don't mean to be rude--I think this is a little naive.
Under the current rules, you are probably right. But if teachers were accountable to principals, and principals were accountable to their customers (somehow), we could get everyones goals in line. Principals know which teachers are requested for student assignments, and which teachers the parents ask the principal to avoid. They should know who has control of their classrooms, and who also has the most challenging kids.
Still, the current structure which gives every teacher the same raise, as long as they are doing enough not to get fired, relies exclusively on the teachers inner motivation to do a good job. That works pretty well for a lot of teachers I know, but I just think there should be some mechanism for these people to be rewarded financially also.
I cannot imagine that union dues are not used for political purposes. If Run is saying that union dues do not directly go towards political efforts, I will trust his word. I see union endorsements and money with the union's name on consistently leveraged to funnel money from the taxpayer.
"It is voluntary, but you have to take the effort to "opt out" - different from making the effort to "opt in". It beats not having a choice, but contacting your union steward for the form to get your money back can be a bit touchy." LOL. This is a joke, right? I guess technically it is voluntary.
"Just so you know the increase for 3700 or SEIU is 2.5% for a tight budget year that's not bad I have seen higher what’s sad is some folks at the U of I have not received any raises but hardly the huge raises you noted."
Hold on a second. Where did I ever mention raises? 2.5% means nothing to me. A raise is relative to what you were paid the previous year. Did everyone in 3700 get the same raise? From what I read on pensions, pension payments are based on your pay during the final year of employment. Isn't it good for the taxpayer when there are no raises paid to people who have a defined benefit pension? If a union negotiates a hefty wage and hefty pension benefit, the amount of the raise is less material.
In every union environment we see the same thing. Management is obviously ignorant, incompetent, and greedy. The management and labor end up working against each other and the whole situation becomes one giant costly and unproductive burden to society. On the other hand, I suppose the local firefighters are very happy with management. Hell, in Urbana the the union just made a huge concession: the new firefighters (heaven forbid) will now have to live in the city limits.
The teaching debacle is very interesting. Maybe money is a motivator and maybe it isn't. It is a profession that cannot seem to articulate how to identify a quality teacher. We cannot compensate the better teachers because of one excuse or another. It seems the administration and teacher unions don't work well together. I know some teachers who don't do it for the money. I know some people who would be great teachers, but will not entertain that BS no matter what you pay them. Teachers are not lazy and greedy, but the union sure doesn't help their image. Today if we want to give an individual a bonus, we have to negotiate it. It's almost funny.
Really, why would a profession like teaching be a good fit for a union? There seems to be so much opportunity to prove yourself as a great teacher. Great teachers, if able to be identified, would be great recruiting targets and naturally increase teaching wages through supply and demand. Look at the administrators in schools and other local government who have not been burdened by the union constraints. They get paid and if they make themselves attractive, they get offers from other places paying them more. I would be more inclined to pay higher taxes for "education" if I knew the money was being spent in a system that is not broken.
In the meantime we're looking at Springfield wondering how they are going to afford a capital plan to build roads. All of us taxpayers should appreciate that Blago has mandated that all contractors use over-priced union labor. I guess those smaller non-union contractors that were strong-armed out of business were not hard-working-middle-class-enough. If somehow money is found for the capital plan, we will likely see lots of new pickup trucks on the side of the road with less to show for it. I suppose it's a blessing in disguise now that the non-union contractor is insulated from the union workers putting any more dead animals in his truck when he shows up to job sites.
"Hold on a second. Where did I ever mention raises?" What do you think we negotiate? "The taxpayers have been whipped again and again by union negotiators." If you don't think raises are one of the biggies then as I have said before your making a lot of unfounded attacks with little knowledge or experience of the Management Labor relationship in a large organization especially when it comes to government departments. You make it sound like neither the State or University has any power to control its own future and it's employees which just isn't true. Blago seems to do what he wants including fire employees without cause from what I have read.
"It seems the administration and teacher unions don't work well together." This statement is truer then you know. In my limited time and experience in and as a Union member I have learned this is why employees get together and organize into Unions because they feel like they are being taken advantage of by management and treated unfairly. You seem to think it's always the employees fault that there are labor management problems.
I will say it again when it comes to our pensions the state pays no more then any other employer does for Social Security (except the state is not paying their portion of Social Security) so I don't understand your complaint that state has to pay like every other employer does how is that somehow unfair? Do you think the state shouldn’t have to pay what other employers pay in Social Security payments?
How do you know that Union labor is over priced, you get what you pay for in everything you buy, I would rather pay for qualified craftsman who I know will do the work right? The state can’t afford a Capitol plan because they waste money on pork barrel projects. If Blago and the rest of the GA wanted to they could pay for the Capitol budget right now cancel the expansion in Healthcare spending.
What are business owners the only people allowed to buy new trucks, I don't understand the dead animal part sorry.
Under the current rules, you are probably right. But if teachers were accountable to principals, and principals were accountable to their customers (somehow), we could get everyones goals in line. Principals know which teachers are requested for student assignments, and which teachers the parents ask the principal to avoid. They should know who has control of their classrooms, and who also has the most challenging kids.
Still, the current structure which gives every teacher the same raise, as long as they are doing enough not to get fired, relies exclusively on the teachers inner motivation to do a good job. That works pretty well for a lot of teachers I know, but I just think there should be some mechanism for these people to be rewarded financially also.
Sure, sadly, right-wing folks like Daley (Yeah I said it), are destroying the only mechanism that would make this possible--the Local School Councils are horribly set-up, but with reform, they would be fine. And they are the best shot at a democratic way of running schools with student, parent, community leader, teacher, and administrator voice. Right now, they are too heavily tilted toward people who are rarely in the building though, so it's pretty politicized.
The other issue is that I don't think you are describing the principal position at most schools. Most principals in large city schools--public, private or charter--tend to spend most of their time dealing with discipline and policy and have little idea of what's going on in the building. And that's even the good ones--the ones who stay until 10pm every night and close up the building and don't hide in their offices.
"If you don't think raises are one of the biggies then as I have said before your making a lot of unfounded attacks with little knowledge or experience of the Management Labor relationship in a large organization especially when it comes to government departments. You make it sound like neither the State or University has any power to control its own future and it's employees which just isn't true. Blago seems to do what he wants including fire employees without cause from what I have read."
Help me understand.
Did everyone in the union get the same raise?
Is a pension payment a function of the last year's pay?
Can you explain the process of what's involved to fire a union employee with good cause.
"How do you know that Union labor is over priced, you get what you pay for in everything you buy, I would rather pay for qualified craftsman who I know will do the work right?"
I do not feel that I get my dollar's worth from my tax dollar. Especially in environments where unions lobby to put artificial constraints and skew the forces of supply and demand and send prices up. Your argument that you get what you pay for is an economic argument. It's ironic to hear these types or arguments from union members who aggressively (voluntarily) lobby against the forces of supply and demand. I thought this whole time everyone acknowledged that the taxpayers paid union folks better-than-market to preserve the hard working middle class.
http://www.cbhconline.org/press/articles/State_Journal-Register-AFSCME_backs_tax_on_gross_receipts_4-11-07.pdf
AFSCME is a organization willing to suck dollars out of the taxpayer with no shame. They supported gross receipts tax. Fund, Fund, Fund with no shame.
In reference to the gross receipts tax:
"AFSCME represents a large number of people. They understand the state
needs new revenue, and this is the best way to get it," Rausch said.
No shame. So what wisdom did this union provide us on pensions and defined contribution benefits again?