East Greenwich Pendulum Viewpoint: Clarifying the Teachers’ Union Contract Debate With Facts
Today’s East Greenwich Pendulum town newspaper contains a Viewpoint editorial in which I wrote these words:
The NEA teachers’ union strike and their contract demands are not about doing right by our children or about education. They are about maximizing adult entitlements where the NEA is willing to use our children as pawns to get more money.
And their claim about unacceptable working conditions does not stand up to scrutiny.
From the outset, be clear about the context for this debate: It has nothing to do with a lack of desire to treat teachers well. Out of the 50 states, Rhode Island’s spending per pupil is the 9th highest and teachers’ salaries are the 8th highest – with East Greenwich paying above the RI average. We are generous and willingly so.
The resistance is to union contracts that continue an expensive entitlement ride which the state and individual communities can no longer afford. Union contracts directly impact over 80% of the school budget. In the last 10 years, the school budget has increased 87% while the town budget has increased 36%. That differential is why taxes have gone up relentlessly and a tax cap bill became state law.
The average East Greenwich teacher received nearly $62,000 in cash compensation last year. According to Claritas, the median income for East Greenwich residents is about $83,000, with 46% making less than $75,000. In other words, there is not that much difference between the cash compensation received by teachers and many taxpayers. Which makes the overriding question: Why should the teachers’ compensation package differ materially from those who pay for their compensation?
SALARY COMPENSATION ISSUES
School and teachers’ union officials are all guilty of misleading the public about the real salary increases going to teachers under contracts around the state. Handing out 9-12%/year salary increases for 9 of the 10 job steps has been the practice in town going back to the 1990’s. We can’t afford it anymore. The salary step schedule needs to be radically restructured in these negotiations.
The resistance is also to giving the same 9-12% annual salary increases to the worst teachers when we would gladly give high salary increases to the great teachers. But the NEA won’t give principals the freedom to make such judgment calls.
There is an important nuance:
Roughly 60% of the East Greenwich teachers are at the top step 10 and their increases have been 3.25-3.8% over the last 3 years. As part of the step schedule restructuring, the top step needs to be adjusted so these teachers get an appropriate increase moving forward. But the pragmatic issue the NEA won’t address is that future increases above 2% for these teachers – which many of us support – will require non-step 10 teachers to give up their 9-12%/year increases.
What part of 3-12%/year salary increases creates unacceptable working conditions? Or even an average of 3-4%, like the private sector?
LIES ABOUT PAY CUTS FOR TEACHERS
One of the most offensive statements by the NEA is that teachers would take a pay cut under the School Committee proposals. Simply and demonstrably false.
Example: Nearly 60% of teachers have a Master’s degree. I took the 2006-07 salary Master’s schedule from the last contract and increased each step by 2.4% to get a new 2007-08 salary schedule. Recall that each job step 1-9 teacher moves up 1 step each year while job step 10 teachers stay at 10. Job steps 1-9 would receive $4,080-7,224 (equal to 8.1%-11.2%) salary increases next year while job step 10 would receive a $1,675 or 2.4% salary increase.
The Excel spreadsheet documenting these pay increases is here. [NOTE: The Pendulum was not able to run this spreadsheet. Please take a look at it as it shreds the “pay cut” argument with verifiable numbers.] Offsetting those pay increases is the after-tax incremental cost to teachers, under their Section 125 plan, for going to a 20% co-pay: $550/year for single coverage and $989/year for family coverage.
[Addendum, not in Pendulum editorial: Note in this additional spreadsheet how the annual after-tax cost to teachers of maintaining a 20% co-pay declines substantially in years 2 and 3 to incremental after-tax costs of $73-210/year. This is because the teachers would go from 5%/10% to 20% in year 1 and that change includes both the co-pay % increase and the annual increase in healthcare insurance premium costs. In the latter 2 years, the teachers only pay their pro-rata share of the annual cost increase of the premiums since they remain at a 20% co-pay in each subsequent year.] Some pay cut. Remember this lie the next time the NEA says something publicly.
HEALTH INSURANCE CO-PAYMENTS
Teachers at job steps 1-3 have only a 5% co-pay. Teachers at steps 4-10 only pay 10%.
The East Greenwich town employees under an NEA contract pay 20%. What should teachers be treated differently?
I don’t know a single person in the private sector who pays less than 20%.
How does a 20% co-pay create unacceptable working conditions?
HEALTH INSURANCE CASH BUYBACK
East Greenwich teachers receive a cash bonus of $5,000/year when they do not use the health insurance plan provided by the district. 68 of the 235 teachers in the district receive this additional cash payment. The $5,000 bonus is among the highest in the state.
East Greenwich town employees under an NEA contract receive only a $1,000 cash payment. Why should teachers be treated differently?
I don’t know a single person in the private sector who receives any cash buyback payments.
How do changes to that payment level create unacceptable working conditions?
We will save the pension debate for another day. Just know that pension costs in the school budget went up 11% in 2006-07 and are going up 12% in 2007-08. The fact that nearly every public sector pension plan is under-funded doesn’t deter the unions from resisting further reforms.
THE CHALLENGE MOVING FORWARD
While lying to the public about pay cuts to teachers and accusing the School Committee of negotiating in bad faith, the teachers’ union relentlessly demands only status-quo contract terms: (i) health insurance co-payment percentages at or below the current 5-10%; (ii) no change in the $5,000/year cash bonus for not using the district’s insurance programs; (iii) 9-12%/year salary increases for job steps 1-9; and, (iv) at least 3%/year increases for job step 10.
These demands, as in past negotiations, have resulted in school spending – and taxes – rising faster than the increases in the incomes of the working families and retirees in town who pay for the teachers’ compensation out of their incomes. This longstanding practice reduces the standard of living of the residents. They cannot afford for the school department to continue these reckless spending habits from the past and the recent tax cap state legislation now requires these bad habits be ceased.
Bluntly, none of the School Committee’s contract proposals has been sufficient to stay under the 5.25% spending increase allowed under the tax cap.
Everyone needs to start over with new proposals and get real.
That said, the School Committee is faced with the following choice, just like every family who has to live within its means: Either teachers’ salary and benefit costs are going to be reined in or educational programs and teachers’ jobs will have to be cut.
The School Committee strongly prefers the former alternative, which will allow the district to maintain academic and extra-curricular programs as well as teachers’ jobs that make a difference to our children’s education. The union negotiating position advocates the latter position, which only serves to provide ever greater adult entitlements, even at the expense of what benefits our children and at the potential cost of their member’s individual jobs.
It is possible to support teachers but not support their union’s extortion-like demands. I hope you will speak up against union demands which reduce your standard of living while not helping our children.
Contract terms like the rest of us, the people who pay for their salaries and benefits. It is all we ask.
I just received this email from an East Greenwich resident:
The article will have perfect timing. The tax bills came out yesterday and I nearly choked–it was reality time. Last night I went to an Open House at one of the schools and a teacher said to the parents: “I know this is hard for you but a 20% decrease in pay for a step 1 teacher isn’t fair.” I couldn’t believe it—I am so happy you did that article.
As I said, clarifying the teachers’ union contract debate with FACTS.
In response to questions from Thomas in the Comments section, here is some further information worthy of more visibility. The information is based on data provided directly to me by the East Greenwich School Department:
- The median 2007-2008 East Greenwich teacher total cash compensation is between $69,000-70,000, which is higher than the average total cash compensation of $61,748. (There are 23 teachers earning between $69,000-70,000 and I didn’t try to figure out the precise answer.)
Here are some other data points for teacher total cash compensation for 2007-2008 –
- Over $80,000 – 6 teachers
- $75,000-80,000 – 20 teachers
- $70,000-74,999 – 73 teachers
- $65,000-69,999 – 34 teachers
So 133 of the 235 teachers in East Greenwich have a total cash compensation in excess of $65,000.
- The average total cash compensation for teachers of $61,748 includes base salary ($58,674) plus other cash ($3,074).
The “other” categories is primarily the cash bonus for not using the health insurance plan (29% of teachers get this bonus).
It also includes department chair, coaching, advising, etc. fees. More about this in the Addendum to this post.
- Of course, the median household income for East Greenwich residents ($82,629) is higher than the median individual East Greenwich teacher (call it $69,500). The Addendum to the earlier post highlighted immediately above also provides independent 3rd-party data on the incomes of East Greenwich residents, including this summary description:
- Median household annual income: $82,629, with 46% of the households earning less than $75,000.
- 77% of households have incomes below $150,000.
- 4% of household have incomes over $500,000.
- Average household income: $122,723.
Note that the $82,629 is East Greenwich HOUSEHOLD data for residents which includes all incomes earned in that house – and that will be more than 1 person in many cases. The $69,500 teacher salary is for the individual only and does not equal their median household income.
So you are not comparing apples-to-apples and the 32% differential between the two numbers that you raise is therefore irrelevant. I also discuss this point further in the same Addendum referenced above. Here is an excerpt, modified to reflect median income and not average income data:
…we also know that 29% (68 out of 231 FTE’s) of teachers take the cash bonus for not using the district’s health insurance plan so those teachers are clearly living in a household where another member works – and provides both a second income and health insurance. Furthermore, we know another 47% (110 out of 231 FTE’s) of teachers utilize the family health insurance plan where it is safe to assume some are the sole breadwinners and others are not but still provide the health insurance for the family. Therefore, we can conclude that more than 29% and less than 76% of teachers in East Greenwich have working spouses/significant others where there are 2 incomes in the household.
If we were to assume another working adult in the family earned another $60,000/year for 29-76% of the teachers, then the median household income for East Greenwich teachers would range between $86,900-115,100/year.
If the other working adult in the family earned $90,000/year, then the median household income for East Greenwich teachers would range between $95,600-137,900/year.
Note that all four projected numbers for East Greenwich teacher median household incomes – $86,900, $95,600, $115,100, and $137,900 – are HIGHER than the median household income of East Greenwich residents.
Which means the economic lifestyles of East Greenwich teacher households are quite similar to (or even better than) the median of all East Greenwich households – my point all along. And, since East Greenwich is one of the wealthier communities in Rhode Island, that suggests that teacher households may be as well off or more well off than the median household in the state.
That is a rather startling conclusion, isn’t it?
And that tells you what a good job the NEA has done in its public relations efforts.
Putting that conclusion aside, my reason for making the point in the first place was because the NEA persists in saying that there are: (i) loads of “rich people” in EG making over $500,000/year; (ii) these people aren’t paying enough in taxes already; and, (iii) they need to be soaked for more taxes.
My response is straightforward: Their comments have been shown to be lies using third-party data in the earlier post.
And, even if they were true, so what? And why should it matter? RI already has the 7th highest taxes of the 50 states in the USA and we already pay our teachers the 8th highest out of the 50 states – and East Greenwich above the RI average. Is the NEA suggesting all East Greenwich residents are not taxed enough?
Besides, even suppose every East Greenwich teacher had NO working spouse and their income was equal to their household income: If we are going to get into the pay comparison you are seeking, then we have to introduce the number of work days/year – something that doesn’t make your argument any stronger.
E.g., Teachers work roughly 180 days/year. People in the private sector work roughly 240 days/year (52 weeks minus two weeks for holidays and two weeks for vacation).
Suppose – quite incorrectly – that the median household salary for an East Greenwich teacher was only their income of $69,500/180 days = $386/day.
Median household salary in East Greenwich of $82,629/240 days = $344/day.
So even when making the utterly false assumption about household versus individual incomes, those day-pay numbers don’t look favorable for teachers – and we have not touched the other relevant consideration: the relative differences in the length of the work days between the two.
Any way you slice the data, it is reasonable to conclude that East Greenwich teacher households are doing just fine in general and also when compared specifically to East Greenwich residents.
The NEA story line of “poor teachers” versus “rich East Greenwich residents” just does not hold water.
- You miss my point here: Taxes have been going up faster than the incomes of the residents of EG because of the terms of the NEA contract. That is an economically unsustainable proposition. The days of being able to afford that trend are gone.
- Yes, the school budget increased 87% over the last 10 years while the town budget only increased 36%. Don’t have the data on how much of that 87% was driven by salary increases versus health insurance cost increases. But the health insurance cost data is unlikely to materially change the conclusion of this post because even today the insurance costs are still “just” 20% of the median teacher salary. The math won’t make the point I think you are trying to make – it is the teachers’ salaries which have been the primary driver in increased school budgets. I remember salaries alone going up about 7%/year during the years when I served on the School Committee.
That said, based on data recently provided to me by the East Greenwich school department, here is the total 2007-08 compensation cost paid by taxpayers to support the “average” East Greenwich teacher:
- Salary: $58,672
- Other cash: $3,074 (2006-07 data only available at this time of year)
- Health insurance, net of co-pay: $9,160
- Pension costs: $7,263
- Total compensation: $78,169