A few weeks ago, the Chicago Teachers Union filed a formal notice of intent to strike. Negotiations are going nowhere, and Chicago Mayor Lori Lightfoot recently criticized the union’s lack of urgency to reach a compromise. The union’s demands mirror those from their 19-day strike in 2012: They seek higher pay, smaller class sizes, and more support staff. But are unions funneling their frustration in the right direction?
A new report by Manhattan Institute Senior Fellow Daniel DiSalvo argues that teachers strikes, while sometimes justified, continue to happen for the wrong reasons. Though teachers and public education advocates blame low or constant levels of education spending for their woes, in reality districts are strapped for resources due to public benefit obligations such as pensions.
Indeed, public school education spending is at an all-time high. The continued strikes reveal first that teachers are not seeing these spending increases in their paychecks, and second, in the Chicago Teachers Union’s case, that they are making unreasonable demands on an already broken system.
Nationwide, unfunded pension liability estimates currently top $500 billion, a massive figure which does not even include an additional $231 billion in unfunded healthcare benefits.
“Underfunded defined-benefit pension plans and other post-employment benefits are the hidden drivers of labor unrest in the public sector,” DiSalvo writes. “Expensive benefits constrain school districts from offering higher salaries to teachers, increasing support staff, and much else.”
Here’s the problem: teachers do not feel these forms of deferred compensation until retirement. As they receive about 25% of their total compensation in the form of benefits, that leads to a smaller paycheck in the short term.
DiSalvo puts forth an interesting policy proposal that would help avoid strikes and target the root cause of the problem. He writes:
DiSalvo’s solution, while noble, presupposes that the demands of teachers union-organized strikes are reasonable. In the Chicago Teachers Union’s case, this is simply not true.
The median salary for a Chicago Public School teacher was $78,910 in 2016. The district pays the highest salaries of any of the 50 largest school districts to teachers with bachelor’s degrees and five years’ experience, and the third highest salaries to first-year teachers with master’s degrees.
Research also shows that public school teachers teachers work fewer hours than private sector employees with similar compensation, in addition to receiving the generous retirement benefits discussed above.
Even so, the Chicago Teachers Union is opting for a strike rather than accept the city’s offer of a 16% base-pay raise over five years. Amid stalling negotiations, this powerful union would be well served by understanding the drain pension liability has on the system and the general unreasonableness of their demands.
Kate Hardiman is a contributor to the Washington Examiner‘s Beltway Confidential blog. She taught high school in Chicago for two years while earning her M.Ed. and is now a J.D. candidate at Georgetown University Law Center.
