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The Battle Over What to Pay Teachers in the US May Come Down to One Painful Decision

The grievances of the Chicago Teachers Union, whose members are holding a one-day strike, highlight problems with the way the entire country compensates teachers.
Chicago mayor Rahm Emanuel chats with an elementary school student. (Photo via Chicago Tribune/Getty Images)

Teachers think they deserve special treatment.

That will be the response of many Americans to the Chicago Teachers Union April 1 strike, which is motivated in part by the state of Illinois and city of Chicago suggesting that the teachers should contribute more to their retirement pensions.

After all, only 11 percent of American workers are in unions (down from nearly a third of workers 50 years ago), and only 18 percent have pensions (as recently as 1998, more than half of Americans over age 60 received pension payments). Nationwide, the average teacher salary is $56,000, but in Chicago, average pay is more than $70,000, about on par with other jobs that require master's degrees. Add in summers off and tenure protections, which make it difficult for veteran teachers to get fired, and Windy City teachers seemingly have it easy compared to the typical worker in our increasingly unforgiving economy.


In fact, the Chicago Tribune editorial board dubbed the proposed strike "Tantrum Day."

But is that fair? The issues in Chicago are complex, pitting teachers union president Karen Lewis against her longtime nemesis, Mayor Rahm Emanuel. Lewis, one of the nation's most confrontational labor leaders, took her members on strike for eight days in 2012, and has long opposed Emanuel's use of student test scores to help identify schools to shut down and teachers to lay off. Meanwhile, Emanuel, President Barack Obama's former White House chief-of-staff, is reeling in the aftermath of two major scandals: the federal bribery case against his former schools chief, Barbara Byrd-Bennett, and the police shooting of 17-year-old Laquan McDonald.

And yet even in this contentious atmosphere, there have been recent student achievement gains in the city, something for which both the mayor and teachers deserve credit. But the two camps are hardly patting each other on the back. The immediate cause of the strike is a state and city budget crisis that has left the school system seriously indebted and planning steep budget cuts and furlough days. Pensions, which guarantee retirees a set annual income, are also a major sticking point. Like 40 percent of teachers nationwide, those in Chicago are not eligible for Social Security. Instead, they currently contribute 2 percent of their salaries to a pension fund, while the city contributes the equivalent of 7 percent of each teacher's salary. Retired Chicago teachers receive an average pension payout of $42,000 per year.


The Chicago Board of Education has suggested ending the city's pension contributions in exchange for a future pay raise for working teachers. The union objected, saying that because of the system's $6.2 billion in debt, they don't trust members would ever see the promised salary gains. Looming over all of this is a threat from Illinois Republican governor Bruce Rauner to force the city school system into bankruptcy, which would trigger a state takeover and more draconian budget cuts.

Chicago is no stranger to this kind of strife. The teachers union movement launched there in 1897 when, citing a budget crisis, the school board froze teacher salaries at just $13,000 in today's dollars. At the same time, legislators were failing to collect property taxes owed by large corporations. In 1902, when Chicago students staged a walkout in support of their teachers, the Tribune editorialized that union teachers "carry little children with them into rebellion…. Insurrectionists are not exactly fit guides for the young."

There is no doubt school strikes are disruptive. They deny students learning time and force parents to make alternate childcare arrangements. Some Chicago union members even oppose the walkout. So it is all the more remarkable that, according to a Tribune poll conducted in February, more than half of Chicagoans support the union. The number is even higher — 73 percent — among households with a child enrolled in public school. A majority of blacks, whites, Hispanics, those who earn less than $50,000, and those who earn more than $100,000 say they trust the union more than they trust the mayor.


In other words, the vast majority of Chicagoans — particularly those who rely on the public schools — disagree with the Tribune's notion that teachers are merely having a "tantrum."

The shift away from pensions has decimated Americans' retirement security, and we shouldn't punish teachers just because the rest of us have been denied this benefit.

A strike is not likely to accomplish the union's long-term goal of instituting new taxes to raise revenue and bolster teachers' pensions. But in general, parents are wise to trust their children's teachers more than they trust policymakers who propose budget cuts. Research shows that higher school funding and better teacher compensation can drive student-learning gains.

That said, teacher compensation systems do need to be improved — both in Chicago and across the country. Today, American workers move more often than they did in the past, but teachers in Chicago have to work in the district for five years before their pension contributions vest — meaning that if they leave before then, they lose retirement income. Some reformers have argued that teachers, like most private sector workers, should have 401(k) investment accounts instead of pensions that guarantee an annual income during retirement. But that would be a disservice to the people who do one of society's most important and difficult jobs; the shift away from pensions has decimated Americans' retirement security, and we shouldn't punish teachers just because the rest of us have been denied this benefit.


But we can modernize teachers' retirement plans. One idea is to shift to cash balance pensions in which teachers and school districts contribute equally, but districts assume the investment risk. Benefits would be guaranteed, and they would also be portable for those who change jobs.

Salaries should also be rethought. Students benefit when creative, intellectually curious people become teachers — and then remain in the profession over the long run. Compared to other college graduates, America's teachers are, academically, about average, and about a third of teachers change careers within five years.

Lockstep pay ladders based on seniority, which unions have traditionally defended, are part of the problem. In other professions that require college and graduate degrees, skilled workers can see their pay double or triple over the first 10 to 15 years of their careers. Teachers, on the other hand, make a competitive starting salary, but typically have to wait close to 20 years — or longer — to earn the upper middle class incomes that comport with our high expectations of educators as knowledge workers.

A grand bargain on teacher compensation might entail modernizing pensions while paying early and mid-career teachers more. But as the Chicago teacher strike demonstrates, such a plan can't be considered in an environment of financial scarcity in which unions and policymakers don't trust one another. Adequate funding is the first step toward labor peace and better outcomes for kids, but in Chicago — as well as in cities and towns all over the United States — that may require something that is far easier said than done: raising taxes.

Dana Goldstein is the author of the New York Times bestseller The Teacher Wars: A History of America's Most Embattled Profession. Follow her on Twitter: @DanaGoldstein