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.
THE CONTEXT
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?
PENSIONS
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.
ADDENDUM:
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:

  1. 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.

  2. 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.

  3. 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.

  4. 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.
  5. 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
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Thomas
Thomas
13 years ago

Donald,
I agree 100% about clarifying the debate with facts and appreciate your presentation. I wonder if you wouldn’t mind further clarifying a few things.
1. You compare the “average” teacher cash compensation with the ‘median” EG salary. Is this a median-to-median comparison? If not, what is the median EG teacher compensation?
2. Does your cash compensation figure include the health premuim discussed later, or is this just salary (or salary plus pay for additional work such as coaching, etc).
3. If the median teacher compensation is $62K and the median EG resisdent salary is $83K, I am not sure why you say “there is not that much difference between the cash compensation received by teachers and many taxpayers.” It seems that the median resident earns $21K (32%) more than the median teacher.
4. I think I understand the impulse behind your question, “Why should the teachers’ compensation package differ materially from those who pay for their compensation?”. But does that mean you think that Central Falls teachers should make much less because CF residents earn much less?
5. I am still interested to know, if you have the information, how much of the 87% increase in school budget over the last 10 years was due to compensation, and how much was due to increases in charges from health insurers.

Tom W
Tom W
13 years ago

>>I am still interested to know, if you have the information, how much of the 87% increase in school budget over the last 10 years was due to compensation, and how much was due to increases in charges from health insurers.
I can’t, shouldn’t, and won’t try to answer for Donald.
But I feel compelled to clarify an apparent misunderstanding: the increased costs for health insurance, to the extent it is borne by the school department / taxpayers, IS PART OF THE TEACHERS COMPENSATION PACKAGE – and any increases are by definition an EQUAL increase in the value of their compensation package.
After all, these are very much part of the cost of having them on the premises / part of the compensation they receive in return for their services. Salary is but one part of their compensation: health care, pensions etc. are also part (and large increases in these latter two, even without a change in salary, constitutes “RAISES” for the teachers).

Thomas
Thomas
13 years ago

Tom W.,
I understand your point, but A) I can’t quite agree with you in all respects and B) I am after a somewhat different point.
A) While the cost of the benefit may go up, the value to the teacher does not, unless the level of coverage changes. The actual increased “benefit” goes to the doctors, insurance providers, drug companies, etc. That suggest to me that we ought to be looking at those costs as much of (or instead of) looking at “greedy” teachers. So, it’s an interesting question how much of the increased costs of education are driven by increased insurance premiums. Needless to say, this affects not only teachers, but all of us.
B) Donald tells us that the cost of the school district went up 87% in 10 years. He then goes on to analyze cash compensation. He does not tell us how much the “cash compensation” component of the budget increased in that 10 year period. I’d like to know.
I cannot say I think it unfair for you to say the increased costs of health insurance constitute an “increased benefit” for teachers. I will say that I think that looking at it that way may (I say MAY) cause us to direct accusations of greed to the wrong parties.

Thomas
Thomas
13 years ago

Donald, I appreciate the response. If I may offer a few points and reactions (in order) 1. Thanks for the clarification on medians/averages 2. I think it is a little misleading to place the health insurance pay-backs in the cash compensation and raise it as a separate point later, but it’s good to know that’s how you calclulated it. 3. Your original post stated salary figures for EG “residents”, not households. You’re right that it’s not apples-to-apples, but the comparison was yours, not mine, so I take exception to your reference to my “utterly false assumption about household versus individual incomes”. You say, “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?” That does not startle me, especially given the high number of teachers with Masters degrees. Nor do I find anything wrong with it. It’s as it should be, in my view. You should not assume that I am a defender of any EG teachers’ claims that their situation is bad. 4. The way you put it tied teacher salaries to the average salaries in their communities, which would be a disaster for Central Falls. I would still like to know what percentage of the EG tax increases over the years are due to teacher’s contracts as opposed to other costs. 5. Health benefits paid by the system (not by the teacher) amount to 9.3% of your total compensation figure. I agree that this may not enough to shift the conclusion, but if increases in costs have moved it from, say 5% to 9.3%, it would be a significant factor. I was asking a question, not trying to make a point. I simply share your interest in having all… Read more »

Tom W
Tom W
13 years ago

>>While the cost of the benefit may go up, the value to the teacher does not, unless the level of coverage changes. The actual increased “benefit” goes to the doctors, insurance providers, drug companies, etc. That suggest to me that we ought to be looking at those costs as much of (or instead of) looking at “greedy” teachers.
Don’t forget that it’s the teachers (among other unions) that oppose switching from Frank Montanaro’s Blue Cross to lower cost competitors.
And notwithstanding the fact the the increased cost of the health care doesn’t go into the teachers pockets, the VALUE to them goes up – for if they were contributing toward (or entirely paying for health care out of pocket) their remaining disposable income would go down … as it is for most taxpayers in the private sector. Not to mention that whatever the employer directly pays is a non-income taxed benefit to the teachers.
Let’s face it, if this didn’t have real value to the teachers the unions wouldn’t fight co-shares with such vehemence. So it’s disingenuous for the teachers to pretend that absent a salary increase they’re not getting a compensation increase, much less a “pay cut.”
>>The way you put it tied teacher salaries to the average salaries in their communities, which would be a disaster for Central Falls.
Ahem! It’s the teachers / teachers union that initiated this tie-in with their comments about EG paying able to afford to pay them more.

Donald B. Hawthorne
Donald B. Hawthorne
13 years ago

Thomas: Thanks again for your comments. I accept your critique about my use of the “utterly false” phrase. My earlier post – linked to in this one – had the precise and proper words/numbers. Therefore, it was clear to me based on that earlier post but I agree that the editorial in the first part of this post was not as precisely worded. I didn’t feel the need to be as precise there because I was trying to make the more general point that teachers’ and residents’ incomes were close enough so that the NEA’s point – poor teachers, rich EG residents – didn’t hold water. Thanks to your earlier questions, the Addendum to this post was written to tie together all the pieces from several posts in a highly precise manner. As to “startling conclusion” point, I too have no problems with teachers being well-compensated. In fact, one of my biggest disagreements with the NEA is that their philosophy caps individual teacher salaries and gives the same increases to both good and bad teachers. It wasn’t “startling” to me that – even after hearing the NEA and its teacher spokesmen run around crying poor all the time – teachers weren’t paid well at all. What was “startling” was to confirm that their households are likely at least as well off as the median household in “rich” East Greenwich. That conclusion blows up the NEA public relations sympathy campaign in spades and deserves to be shouted from the mountain tops – because it is not the public perception. Nonetheless, facts don’t stop some of the NEA players from still believing their own silly talk, which is why some of them whine and tell lies about pay cuts. I will see if I can get the 10-year data on increases in… Read more »

Michelle
Michelle
13 years ago

Let’s assume that the new contract did not include the buyback option.
I wonder how many of the teachers who do not currently get insurance through the school (possibly through their spouses’ companies), would then switch to acquiring it through the town.
Would this hurt the town or still save it money? Is there really an accurate way to calculate this?
I would appreciate any insight that you can provide on this matter.
Thanks.

Thomas
Thomas
13 years ago

TomW: “Don’t forget that it’s the teachers (among other unions) that oppose switching from Frank Montanaro’s Blue Cross to lower cost competitors.”
Is the coverage the same? If not, I would assume they would oppose it as, all else equal, it’s a cut in benefits.
TomW:”And notwithstanding the fact the the increased cost of the health care doesn’t go into the teachers pockets, the VALUE to them goes up”
I disagree. If my morning coffee goes from $1 to $5, it’s cost goes up, but it’s value does not. I will have to decide whether or not it’s value to me exceeds the cost.
TomW: “So it’s disingenuous for the teachers to pretend that absent a salary increase they’re not getting a compensation increase, much less a “pay cut.”
Recently, my insurance co-pay went up while my salary remained constant. My coverage stayed the same, and my disposable income went down. That’s a pay cut by any reasonable measure.
TomW:”Ahem! It’s the teachers / teachers union that initiated this tie-in with their comments about EG paying able to afford to pay them more.”
I have no idea what the EG teachers are saying and don’t really care. The argument that teacher’s pay should be strongly indexed to the avearage community salary strikes me as unconvincing no matter who makes it EXCEPT as regards A) cost of living and B) cost of housing so teachers can live in the community where they teach. I realize this won’t help the EG teacher’s argument, but I care more about Central Falls, Providence, Pawtucket, etc.

Ann
Ann
13 years ago

Donald,
Your figures are wrong, in fact they’re off by hundreds of dollars. But, I am going to assume you were mistaken, not that you are a liar. I don’t know where you got them or why you didn’t confirm them. Wait, yes I do. You enjoy trashing teachers too much to care if you’re accurate or not. An angry zealot with a little information and/or MISinformation is dangerous and sad. It only creates an avenue for these individuals to spew more venemous statements about your teachers. The teachers are not lying. They know how much they pay for insurance. If you confirmed your numbers you would see that it is indeed a paycut. Now, do teachers realize that times are tough? Of course they do, they’re tax payers too. But you can’t reach an agreement if one side only offers a paycut to some of its employees. Would you agree to that???? Teachers are very willing to get creative and structure a contract that’s fair to everyone. But I’m sure you don’t (or aren’t willing) to believe that because you seem to be one dimensional on this issue. You’re too busy name calling, making accusations, and going out of your way to villify teachers. They’re actually very good people you know. They deserve better treatment than this (and I’m not referring to salary). Your remarks are rather typical of a junior high gossip fest. Step back and take a breath please. Maybe you’ll gain some understanding of both sides of the issue if you do. In fact, usually people go out of their way to understand both sides of an issue so they don’t appear to be ignorant.

Donald B. Hawthorne
Donald B. Hawthorne
13 years ago

Ann: My, oh my. I am afraid you are the one who comes across as the angry zealot here. The kindest thing that can be said about your invective is that its logic is specious and and its tone is demagogic. As a result, my blunt challenge to you is this: I put all of my analyses in full public view, even the supporting spreadsheets. I offer links to many 3rd-party documents to support other claims. Nobody to-date has offered any tangible proof that there are any errors in any of the work. (For goodness sake, nobody has even offered a tangible counter-proposal of any kind!) So demand that your NEA union reps do exactly the same as what I have done – Demand that they conduct a similar analysis, provide 3rd party sources to justify other claims they make, and then put it all out in full public view for the same level of scrutiny. So far all they have done is what you have done: Whine endlessly in public about pay cuts and offer NO proof. That is demagogery, plain and simple. Prove it or shut up! Heck, I will even post their analysis on Anchor Rising if you send it to me. I am not afraid of any such debate. But I think they are. And here is why: Dare them to prove it to you because I predict that they can’t prove it – without errors. Why? Because what you probably don’t know is that when your union reps were challenged in the negotiations to show the School Committee members where there were pay cuts, I am told that the union reps admitted there were no pay cuts. Hmmm. Are you sure your NEA leaders are telling you the truth? Think about that: The NEA union… Read more »

Tom W
Tom W
13 years ago

>>TomW: “Don’t forget that it’s the teachers (among other unions) that oppose switching from Frank Montanaro’s Blue Cross to lower cost competitors.” >>Thomas: Is the coverage the same? If not, I would assume they would oppose it as, all else equal, it’s a cut in benefits. My understanding is that in Warwick the only difference was who provided the administration (processed the paperwork), not a change in coverage. Yet the unions opposed. >>TomW:”And notwithstanding the fact the the increased cost of the health care doesn’t go into the teachers pockets, the VALUE to them goes up” >> Thomas: I disagree. If my morning coffee goes from $1 to $5, it’s cost goes up, but it’s value does not. I will have to decide whether or not it’s value to me exceeds the cost. Uh, except the union demands that the health care stays in as part of the compensation plan, no matter what, unreduced. The desire / demand to retain = value. The desire to retain at even higher prices = higher value. More to the point, if the employer provides “free” coffee to the employees, and the price for same goes from $1 per cup to $5 per cup, and the employees consume the same amount and do no have to go out and purchase the coffee at the going rate, it is a benefit to them whose value has increased, and thus so has their compensation. >>TomW: “So it’s disingenuous for the teachers to pretend that absent a salary increase they’re not getting a compensation increase, much less a “pay cut.” >> Thomas: Recently, my insurance co-pay went up while my salary remained constant. My coverage stayed the same, and my disposable income went down. That’s a pay cut by any reasonable measure. Thank you for confirming my… Read more »

Ann
Ann
13 years ago

Donald,
My,oh my. More misinformation that you wish to hang your hat on. If you’re not sitting in negotiations I wouldn’t be so quick to comment on them, just as I won’t. But I do pay a percentage of my insurance premium and I know that your numbers are incorrect. Unfortunately, you repeatedly take SOME information and spin it to your own personal satisfaction. You are now comparing the NEA to the Soviet Union? And calling teachers liars? Have you ever stopped to think that maybe you are the one being fed false information?
I’m trying to maintain a positive attitude with all of this negativity surrounding the teaching profession. This kind of conversation makes that almost impossible and goes nowhere. Appreciation is shown in the form of a fair salary in other fields. Stock options, bonuses, etc. also come into play. Teachers are not part of that kind of a system, and don’t expect to be. But we would like a fair and reasonable salary based on the average around our state-nothing more. The NEA happens to be the only group that supports this idea. Maybe if you came around and supported us we wouldn’t need the NEA. Just a joke to lighten things up-don’t worry. I won’t hang my hat on that idea. It’s hard to be happy and positive with this kind of negativity in the air so I’m done conversing for now. I’m off to my students and plan on having a wonderful day with them!

Donald B. Hawthorne
Donald B. Hawthorne
13 years ago

Of course, the numbers are not going to tie to what is in Ann’s paycheck – because she is still paying 5% or 10% co-pays from the last union contract and getting her 2006-07 salary. The false “pay cut” claim has nothing to do with what is in her current paycheck and it is a scary thought that anyone would think so. It has everything to do with PROSPECTIVE & INCREMENTAL pay dynamics when two likely events occur: Base Salary Increase: A base salary increase in 2007-08 results from an increase to the 10 steps in the salary schedule, which I have assumed to be 2.4%. As shown in the spreadsheet in this post, that 2.4% translates into 8.1%-11.2% pay increases for job steps 1-9 – or $4,080-7,224 annual salary increases. It is a 2.4% or $1,675 annual salary increase for job step 10. After-Tax Cost of Higher Co-Pay: The salary increase is offset by the incremental after-tax cost of implementing a higher co-pay, which I have assumed to be 20%, which yields an estimated incremental after-tax cost in 2007-08 of $550-989 per teacher. Neither of these two events has happened yet. Which means you have to do some analytics. And, I reiterate again: No matter how you slice the numbers, there is no “pay cut.” If some teachers are that unclear about how to measure the alleged “pay cut,” then it is not at all surprising that they reach the wrong conclusion. The starting point for the teachers should be a straightforward one: Demand that the NEA prove quantitatively to them where there is a “pay cut” in the future. Make the NEA earn its dues money! Before offering baseless criticisms of other people’s work, get your own house in order. Which means, the rest of us are still… Read more »

Thomas
Thomas
13 years ago

Donald wrote: “Thanks for pushing on these issues! It made a valuable contribution.”
My pleasure 🙂

Thomas
Thomas
13 years ago

I, for one, would appreciate it if Donald, or anyone else, can post an answer to Michelle’s inquiry.
People seem to think that the health insurance pay-back is an excessive benefit. However, if the pay-back amount is less than the cost of the insurance, the employer would save money. If the pay-back is not offered, the employee has no incentive to not accept the health package (especially since double-coverage does lower some medical costs).
So, why isn’t the pay-back a good deal for the employer (and in the case of teachers, the taxpayer)?
The only alternative I can see is refusing to provide heath coverage for employees who are covered by a spouse’s/parent’s/etc’s policy, which I can’t imagine is exceptable (unless you believe in a single-payer system).

Thomas
Thomas
13 years ago

Tom W., We may be talking past each other a bit. I don’t want to confuse the point with the current EG situation, so let me use myself as an example of what I am saying. I took a job with a salary of $X. It came with fully employer-paid health insurance. I agree that the insurance was part of my compensation. In fact, took a somewhat lower salary than I wanted and thought I deserved because of it. Later, a premium-sharing program was introduced. As a consequence, my compensation was reduced. I assume you agree. If, in a following year, the total premium stays the same but my co-payment percentage increases, that is another reduction in compensation. I assume you agree here too. Now, let’s assume that the co-pay percentage is constant, but the total premium goes up. My employer’s costs go up, and so does my co-pay. I understand you to say that my employer has not cut my compensation. Strictly speaking, I can’t disagree. However, it is clearly true that I have less disposable income, and have experienced no increase in the value of health care. (cost, yes; value, no) Note that this is a little different than the fees I pay to dock my yacht. I can’t NOT pay this. (Anybody who thinks I can can come over and explain their view to my children). I conclude that I have experienced a decrease in my compensation. The insurance provider has received an increase, and it has come from me and my employer. Here is where I expect you will disagree, based on the following: TomW: “Using your logic, if your employer didn’t contribute anything toward your health insurance policy – i.e., you pay 100% of the premium under the employer plan – annual increases in the… Read more »

Tom W
Tom W
13 years ago

Let me try this from another angle.
Consider the premise that your disposable income went down due to inflation (in health care), but not your compensation.
If your employer contributed a fixed dollar amount toward your health care, and you absorbed the marginal increase in higher premiums thereafter, you wouldn’t have incurred a cut in compensation, but your disposable / discretionary income would go down (assuming that you kept the insurance in force).
Your employer (presumably) doesn’t pay your auto insurance, and when the annual premiums go up that is not a “cut” in your compensation.
The measure is, ON A NET BASIS, the TOTAL dollars that the employer expends in order to have you on the premises: employer pension / Social Security “contributions”; employer payment toward benefits (such as health insurance premiums) and salary / wages / bonuses.
IF the employer increases a co-share percentage to the degree that the TOTAL NET dollars (year over year) that the employer spends having the employee on the premises declines, THEN you could state that there was a decrease in compensation.

Thomas
Thomas
13 years ago

TomW,
You say, “Your employer (presumably) doesn’t pay your auto insurance, and when the annual premiums go up that is not a “cut” in your compensation.”
Suppose that, according to my contract, my employer DOES pay my auto insurance. He buys a bulk policy for employees and deducts $100/month from my check for it. That is now part of my compensation. One month I find the deduction has gone to $120, but my coverage has remained the same. Granted that the employer may just be passing on increased costs to me. Granted that I may be better off than if I had to buy insurance on my own. I still say that the value I receive for the same labor (my cash and insurance compensation) is $20 less per month.
If the employer makes a bad deal, or the insurance company cheats the employer, and my premium goes to $150, my compensation (or at least the value of my compensation) has dropped by $50.
I’m concerned, that, under your view that compensation is measured by ” the TOTAL NET dollars (year over year) that the employer spends having the employee on the premises “, my employer will start charging me for the heat in my office, and dock my pay when heating bills go up.
sign me,
Bob Cratchit

Tom W
Tom W
13 years ago

One last time, because I’m sorry to have to say this, but I’m beginning to feel like I’m trying to communicate with a real dunce.
Your employer does not set the price of auto or health insurance. And it those prices go up that’s not the employers fault or responsibility.
That pricing is set by the market external to your employer.
A dollar, like any currency, is a medium of exchange representing an accepted value per unit.
An employee’s compensation is comprised of the number of DOLLARS that the employer expends on that employee – and the VALUE of the employees compensation package is exactly equal to the number of those DOLLARS!

Thomas
Thomas
13 years ago

TomW,
My lack of agreement with your perspective on this matter does not indicate my failure to understand it, so you had better look elswhere for the source of your frustration.
Your equation of compensation (value)-to-employee and cost-to-employer has the consquence that if my employer, either foolishly or for for bad motives, decides to switch insurance companies so as to spend twice as much on the same insurance coverage, my “compensation” has increased, even as my premium share rises and my insurance remains constant. From my perspective as the employee, that is obviously absurd, and I reject it.
We’ve had reasonable disagreements in the past and I’ve enjoyed the discussions, but your resort to name-calling makes me glad to hear that was your last word on the subject. This will be mine.

John
John
13 years ago

Thomas and TomW’s conversation mirrors a larger national issue. On the one hand, while real wages have stagnated, the amount the employers spend on employee benefits (net of any increases in employees’ share of those costs) has substantially increased in recent years, driven by the rise in health insurance costs. So from an employer’s perspective, the total cost to employ a worker has gone up. And if the value of output per labor hour (which, given the pricing pressure in today’s globalized economy, basically translates into increased ouput volume per labor hour) hasn’t increased by at least as much, this has caused downward pressure on profits (not good if you’re a public company trying not to get taken over).
Obviously, an employee’s perspective on this is different. He or she sees stagnating real wages, a greater percentage of must be spent on health insurance. While there is clearly value to the employee in the company choosing to maintain health insurance coverage (and pay most of its rising costs), it is fair to say that most employees don’t see it that way.
And when those same employees also face the prospect of much higher tax bills because the teachers union wants a substantial real wage increase and no increase in their relatively very small share of health insurance costs (while resisting all calls for performance based pay or productivity improvements) — well, let’s just say that it is easy to understand why there are a lot of angry people out there today.

Ann
Ann
13 years ago

Donald,
Again you’re wrong. You assume that one can’t calculate numbers because they don’t agree with you. I am figuring the cost of the contribution accurately. It’s a very simple equation actually…IF you have the correct figures to begin with.
Now, you consistently call teachers “whiners” when they state their view, opinion, or even the mere facts of a situation. Are we not aloud to speak our views in your world Donald? And did you really call Tom a Dunce???? This is the very problem with trying to have a discussion with someone like you. And don’t you think you’re whining??? So no, I won’t continue to engage you so you can keep whining and twisting information to sensationalize this situation any more. I’m quite confident in myself, my numbers, & my collegues. I don’t need to prove anything to you. It’s not worth the effort. It’s really quite sad that this is the only thing going on in your life.
But then again maybe you’re right. In fact, if you think being a teacher is such a great deal why don’t you enroll in school and become one? Surely one such as yourself could never pass up such a financially rewarding profession.
See you in the classroom…
We’re waiting…
Still waiting…
To Michele,
You’re right on that issue and everyone involved agrees. Health insurance to those that receive the buyback would cost any school system much more. But don’t take my word for it. Apparently “The Donald” is the only one with the right answers!

acb
acb
13 years ago

EG teachers do not participate in Social Security, although they do participate in Medicare. The taxpayers of EG do not have to fund the employer’s contribution that would be required if the teachers did participate in the Social Security system. Fair is fair. If you are looking at what is normal in the private sector, participation in Social Security is normal.
What is the breakeven for the EG taxpayers if the union was to trade off a co-pay for participation in social security? How much of a co-pay would be required to offset the cost of the employer contribution? This would not result in any net savings to the taxpayer, but would put the teacher’s benefit package, at least what can be negotiated by a school committee (pensions are mandated by the state as you know), on a par with the private sector.

Ann
Ann
13 years ago

acb
I’m not sure about what those figures would look like, but interseting idea. My school system does contribute to Social Security, although my husband’s (EG) does not, as you already know. I’ll sugest they look into it.

Donald B. Hawthorne
Donald B. Hawthorne
13 years ago

Geez, this debate is like dealing with the emotional and intellectual sophistication of a petulant toddler. You say: “Again you’re wrong…I am figuring the cost of the contribution accurately. It’s a very simple equation actually…IF you have the correct figures to begin with.” I respond: Okay, I repeat, prove it. Don’t just stomp your foot and say the words. Instead prove it with real and verifiable numbers that tie to contractual salary data and actual health insurance premium costs, etc. Just like my analysis did. It is not lost on readers that you are vehemently protesting that my numbers are wrong while simultaneously failing to identify exactly how my analysis is incorrect. You say: “You assume that one can’t calculate numbers because they don’t agree with you.” I respond: Really, where did I say that? Nope, what I actually said was send me your financial analysis showing there really is a “pay cut” and I will post it on Anchor Rising for full public scrutiny. Right next to my analysis. And may the most rigorous and precise analysis carry the day! You say: “Now, you consistently call teachers “whiners” when they state their view, opinion, or even the mere facts of a situation. Are we not aloud to speak our views in your world Donald? I respond: No I don’t call teachers whiners. I do call union hacks – some of whom are teachers – whiners when they both cannot and will not substantiate their “pay cut” claim with publicly visible analytics to justify their argument. And, for goodness sake, nobody is trying to squelch your free speech. In fact, I am rather delighted that you are posting these comments – without supporting documentation – because they make your side look really evasive to the public and that is destroying… Read more »

Ann
Ann
13 years ago

Donald,
Again…you’re wrong. Instead of listening to the message and considering it you continue to whine and name call. I guess it’s “shame on anyone that doesn’t agree with you” in your world. It’s really getting rather funny to listen to you. However, there is a point where one has to stop putting themselves in the position of letting an individual (that is incabable of “considering” their point of view) attack them continuously. That is why no one will give you numbers. You accept what you want and toss the rest. We discuss the numbers with those individuals that are in the position of negotiating the contract. That’s what a bargaining unit does.
So have fun name calling, whining, and spewing your nonsense. I have more important things to do. I know the school day is over, but I have papers to correct, plans to get ready, parents to contact, grades to record, a parent volunteer schedule to prepare, forms to fill out,portfolios to organize, a curriculum guide to read through, materials to prepare, open house packets to create, rubrics to create,and meetings to prepare for next week. Am I whining? No, I love my job. But I do realize you have no knowledge of what it takes to be a teacher. I’m just stating the facts.
What are YOU doing this weekend?

Tom W
Tom W
13 years ago

Repeatedly trying to refute facts and data with emotionalism. And we’re supposed to be sympathetic, much less persuaded?
For Ann’s sake, I hope she has tenure.
For the sake of the children of EG, I hope she doesn’t.

Frederick
Frederick
13 years ago

I’ll say it again … for the people who say teachers have a lot of free time and perks YOU ALL seem to have a lot of free time as well and spend an A LOT of that time focusing on a single issue in our state, country, society, universe!!!

Tom W
Tom W
13 years ago

>>I’ll say it again … for the people who say teachers have a lot of free time and perks YOU ALL seem to have a lot of free time as well and spend an A LOT of that time focusing on a single issue in our state, country, society, universe!!!
Well, given that my property tax bill is equivalent to about FOUR IRA contributions – and that 70-80% of that goes to teacher salary and benefits – so that I’m forced to fund outrageous teacher pensions and then, with whatever is left over, try to put something aside for my own retirement, yeah I do spend a lot of time focusing on a “single issue”!
And there are tens of thousands of seniors in this State who worked a lifetime only to have to sell their homes, and more and more each day increasingly worried that they can’t afford to keep their homes much longer – because of the spiraling property taxes 70-80% of which goes to teacher pay, benefits and perks. They too are spending a lot of time focusing on a “single issue!”
And there are parents who want a better future for their children, or at least a reasonable shot at a decent future – and who can’t afford a private school and agonize about it, for they’re forced to enroll their kids in mediocre public schools managed behind the scenes by the teachers unions, and operated overall for the benefit teachers unions, rather than to advance the educational mission. Yeah, they spend a lot of time focusing on a “single issue” too!

Ann
Ann
13 years ago

So apparently “The Donald” doesn’t even read the comments posted close enough to grasp what they are saying. I am not an EG teacher, my husband is. I teach in another district (thank goodness). There is nothing emotional about my comments-I’m just stating the facts. So according to you teachers are either whining or emotional? Really Donald, even you should admit that statement is ridiculous. I’m going back to my family and students now…for good!

Frederick
Frederick
13 years ago

Teachers don’t have bills, too? About 13.5% of my gross a month is what I put into my pension and 403b/457b’s. I have a mortgage (& taxes, insurance, PMI) that is more than half a month’s take home pay. Keeping in mind the home I could afford was below the median cost for a home in RI at the time and I have PMI because I didn’t exactly have an extra $50,000 lying around for a down payment. Should I mention it took me eleven years to pay off my student loans?
You want a scapegoat for your woes? Find someone else!!!!!

Tom W
Tom W
13 years ago

Frederick,
Gee, I never knew that teachers were the only ones who had student loans!
And I never knew that teachers were the only ones ever to have a PMI.
I guess I was hallucinating all those years I spent paying off student loans and paying a PMI on my mortgage!
Now that pension contribution of your, that wouldn’t happen to be toward one of the 75% of average of the highest consecutive three years pay with no minimum retirement age, now would it?
Are you going to be one of those teachers who “retires” at 50-ish and starts collecting that pension for the rest of your life, which may well be longer than the years you actually spent working as a teacher?
No waiting until 67 to retire for you, no siree … and no worrying about your “benefit” being cut, ’cause unlike that stupid Social Security that ole pension is vested and has an automatic 3% raise each and every year, compounded.
Oh, and did we mention that State retiree health care plan?
Yeah Frederick, we feel for you.

Robert S.
Robert S.
13 years ago

In response to…
“And there are parents who want a better future for their children, or at least a reasonable shot at a decent future – and who can’t afford a private school and agonize about it, for they’re forced to enroll their kids in mediocre public schools
I find it amusing that many on this blog seem to think that private schools offer students such a superior education. I would encourage you to spend time at both private and public schools in the state before making such a statement. What do the private schools offer that is so exceptional? I have yet to “awed” by the private schools in this state, despite my many observations in both the private and public school setting.
Also, if the individuals on this blog feel that test scores are the way to measure academic success, it is interesting to consider the fact that private schools in this state do not necessarily require students to take the NECAP and other required public tests. Are you so certain that the children who attend these schools are getting a superior education…or is the data simply not there to tear the system apart?

Frederick
Frederick
13 years ago

Tom W,
Your point in one post is non-teachers all have bills to pay, don’t teachers realize this when they ask for X,Y, and Z? Then I point out I have regular expenses just like the NON-teachers do. So then in a next post you point out non teachers have the same kind of expenses as I mentioned. Um, duh?
Evidently I wasn’t very clear in making the point that my expenses are NOT for a yacht at the club in East Greenwich, weekends at a golf resort, two weeks in Europe or anything else extravagant. LIKE ANYONE, I worry about paying the bills. (I hope my gutters make it through the season without falling off my house)
I am guessing I will be able to retire at or AFTER I am 61 if I put in 35 years. Nevertheless, I am afraid I won’t have enough money to live on even with this cush amount you describe. I rarely take sick days now and I hope to the God above that I can stay healthy well into my sixties!
Not sure what else you think I or others like me should have been doing all this time.
You are so bitter Tom W, towards one group of people, you have to think about why!!!!

John
John
13 years ago

Ann, Fascinating comments. So you and your husband are both teachers. Probably pretty senior ones — let’s say, step 10s. So you’re probably pulling down around 120 to 150K per year. And that may be light, after taking longevity bonuses, cash payments for development and one health insurance buyback into account. And that’s for far fewer work days than most of us work. And a much better defined benefit pension (which most of us in the private sector don’t have anymore). And those great post retirement health care benefits (most of us poor slobs in the private sector worry about getting laid off in our fifties, and wondering how we’ll pay for health insurance until we become eligible for Medicare). So, bottom line, you — sit down, now Ann — you and your husband are solidly in that group known as “the rich” (at least in Rhode Island terms). Even if you live in EG, Ann. All courtesy of your fellow taxpayers. Beautiful. But Ann, I’m still stumped — why can’t you provide the numbers Don was asking for? Why can’t you and your husband show all of us private sector taxpayers why the NEA’s arguments in EG are solidly grounded in facts and analysis? As far as I’m concerned (and no doubt many others who are reading this), your failure to present any facts and analysis to support your assertions speaks volumes. Here in the private sector, Ann, that dog wouldn’t hunt. Oh, and Ann, one more question. You wouldn’t, by any chance, be one of those teachers who is also in favor of Rhode Island having one of the nation’s most generous package of welfare programs? Because if you are, then logically you must also be one of those teachers who believes that the answer to the riddle… Read more »

Frank
Frank
13 years ago

Don,
Ann is a petulant toddler? You are going way too easy on her. After her self centered, factually deficient diatribe (not to mention her graphic misuse of the word “aloud” – I hope she is not someone’s English teacher!) I believe that she has firmly established herself to be in need of an IEP of her very own. From now on it wouldn’t be fair for her to debate well informed adults without some sort of extra help.

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