Saturday, March 9, 2013

Strongsville Teachers Strike: What We Need is Clarity!

By Rich Kozlovich,
This week as I was preparing to go to work my wife and I watched the news about the Strongsville teachers strike.  The two talking heads just seemed to be in great emotional pain over this issue, giving the impression, at least to me, that they were grieving for the strikers and the “pain” they were suffering.  What was the terrible source for their suffering?  The teacher interveiwed by the station claimed their only concern was over the children's safety because of the unwillingness of the school board to sign the contract they wanted, forcing them to go on strike. Giving the impression that the children's safety was the only thing at the forefront of their minds, since they couldn’t be on the job protecting them.   My question was; from whom were they protecting them?  When you see the video recorded by Sun Newspapers, (make a point of watching in order to understand the other comments) you may begin to wonder if their being off the job might not be good for the kids.  As for the teacher in the video being interviewed between images of surly, rude, nasty strikers….they aren’t your kids!
We really need to understand this once and for all.  When anyone starts the "it's for the children" smokescreen mantra; it really isn't, and you had better start looking a lot deeper into the subject because that is an emotional trigger that is used to hide something.
 This week I received an e-mail alerting me to an article published by Ohio Watchdog entitled, "Strongsville teachers owed millions in comp time……", where the author, Jon Cassidy, points out some interesting facts regarding the Strongsville teachers strike and the surrounding issues.  First of all….this isn’t a real strike, as most teacher strikes aren’t "real" strikes.  Their pay is spread out over 12 months in spite of the fact they work nine, so they’re probably being paid by the district to strike versus working.   Furthermore the district owes “its employees more than $8.9 million for unused days off — a little more than $10,000 per person.”  That isn’t a ‘real’ strike.  They are, for all practical purposes, being subsidized!
We hear how the poor teachers are “only” being paid an average of $66,558 a year, above the state average of $56, 715, which many think is a gross overpayment for nine months work.  Others think that's pretty nice pay for nine months work, and of course, the teachers believe they are grossly underpaid and deserve massive raises for what they do.   The news media always discusses average pay, which even in this case seems pretty good.  That’s illusionary.   Average pay and typical pay can be substantially different, and this doesn’t include the benefits package, which is unsustainable.  I will discuss that later in the article.
In order to understand this average pay issue, for analysis purposes, let's say that there are 10 teachers and they average $68,000 a year.  First of all, I have no doubt there would be some teachers making over $75,000 a year there, and possibly over $90,000, and I have no doubt there would be teachers making less than $68,000.   The real question is this; what is the starting salary and what is the peak salary?
 Let's say these ten teacher’s salaries break down in this manner; the starting salary is $30,000 and one person makes that.  Let’s say the peak salary is $90,000 and one person makes that, and the remaining eight make $70,000.    What is the average?  $68,000.  But the typical salary is $70,000 and the potential is higher for everyone, and probably also for the one at the top of the scale.    However, let’s assume the bottom three make $30,000, the next two make $70,000 and the top five make $90,000.  What’s the average?  $68,000!  The typical is not quite, but closer to $90,000.  But if you take the bottom three earning $30,000 out of the equation two would earn $70,000 and five would earn $99,000 the average would now be over $84,000, and the typical would be $90,000. 
Even at the $68,000 level, most people would consider that a darned good job, especially those out there who are struggling to stay above water and paying the taxes that support these people .  But somehow the teachers seem to think they are being disrespected.  After all, they went to college and sacrificed a great career in business to teach our kids; at least that’s their claim; which of course is a logical fallacy because they have no clue as to whether they would have even been able to hold down a job, let alone have a wonderfully successful career in business, especially since they consistently score among the bottom 10% on the SAT's.
Jon goes on to say in his article that the “district issued $81 million in new debt to pay for the construction of a middle school and renovations of other schools”.  He also points out that although that money can only be used for the stated purpose the “union leaders can smell the fresh cash.”  He quotes “Tracy Linscott, the president of the Strongsville Education Association”, in a radio interview with Bill Wills of WTAM Cleveland”  as using some sort of “legerdemain” in order to hide “money in their five-year forecast,”   He went on to say; “You know, they keep telling us they don’t have money for a fair contract. However, looking at the forecast, in 2012 they ended FY2012 with $2 million more than what they said they would. So how is it that you go from not having money to $2 million? So we feel like they’re kind of manipulating the money within their five year forecast.”
So what is the real story.  Jon goes on to say in his article;
“Actually, the district predicted a narrow $500,000 surplus last year, and ended with a $2 million surplus after holding expenses down by $1.5 million, according to the district’s financial statements. The big picture is much worse, for Strongsville and districts across Ohio, as the pressure from unfunded pension liabilities starts ratcheting up year after year.  The district has little cash, and it’s all spoken for, which is one reason why Moody’s Investors Service has a negative outlook on the district.”
They can’t hide money they don’t have, but more importantly is the issue of “unfunded pension liabilities” that start “ratcheting up year after year.”   In an article I titled, It's For the Children! Baloney! I point out just how out of whack this situation can become. 
"In an article by Tim Gantert entitled “Teacher upset she can’t retire at 47” he outlines how a teacher by the name of Terri List from Saginaw Township, Michigan “says she would tell her students not to become a teacher in Michigan.” Why? Because she is outraged that she won’t be able to retire at age 47 and earn $60,000 a year....for doing nothing. Furthermore that figure “would increase 3 percent a year and she would get health benefits when she retired at age 60”. It might be worth noting that with the three percent increases in her retirement package (assuming that percent of increase never changes) she will be receiving $85,545.65 a year “and benefits”...for doing nothing by age 60.

However, we need to understand the miracle of compound interest, of which the negotiators of these contracts were clearly totally and unforgivably ignorant. How much will she be receiving by age 80? This of course is presuming that she lives that long, and today that isn’t an unreasonable expectation. That $85,545.65 would skyrocket to $133,277.34 a year….plus benefits..... for doing nothing.

(Note: I calculated all the figures at $45.000, $60,000 and $90,000 since the higher figure was an earning expectation and the lower figure was a reasonable assumption of initial earnings based on what was stated, although that initial figure may have been even smaller making this whole scenario even worse, and the middle figure is what was stated as to what she would earn retired in her first year at age 47.)

Currently she earns ….as an English teacher…… “between $70,000 and $80,000 a year depending upon her level of education and it’s likely List would make more than $90,000 with 3% pay increases over the next 15 years. I think we can reasonable to assume she didn’t start out at this salary, and she probably didn’t start teaching until after college, or around the age of 22. If she were to retire at 47 she would have worked for the Saginaw Township system for 25 years. If she lives to be 80 she will collect from the system for 33 years. If she started out at 45,000 a year; (I chose $45,000 a year based on her statement that they could hire two teachers to replace her and save money) and worked her way to 90,000 a year, and the raises averaged around three percent that means she would have earned around $1,689.000,000 during her entire working career for the system.

If she lives to 80 she would be out of the system for 33 years and received 2,641,000.00, and benefits ….for doing nothing. She will receive a million dollars more out of the system retired than she earned working in the system. Would someone explain to me how that makes sense? ……To add insult to injury the article went on to say “that it is likely that List bought
“years of service” because she said she would have 43 years of service by age 60. Van Beek said that practice is basically extinct in the private sector.” This is absolutely insane."

The union clearly understands the outrage people would feel if they really understood what is going on because they are demanding that in the next agreement the district will be forbidden “from disclosing its offers in future negotiations’.  But as for right now with the contract that is in place it “means they get raises for longevity, certifications, and the like, but not an automatic annual raise”.  Jon goes on to cite this: “Linscott, for example, had the same salary of $74,348 in 2007 and 2008, but then got a raise to $80,869, which she had from 2009 to 2011, according to a salary database created by The Buckeye Institute, a free-market think tank.”  He goes on to say; A Buckeye Institute analysis of every school district’s own five-year projections found that employee compensation would take up 96 percent of school revenue by 2015, creating a global deficit of $7.6 billion.”  That is a recipe for bankruptsy!
It is claimed that the Strongsville school system is one of the better ones in the state rated “excellent with distinction" outperforming  68 percent of state districts in math and 72 percent in reading over a four-year period.”  Great….but what does that really mean when one of the biggest money makers is teaching remedial reading, writing and math in order to gain entrance into a university? 
Over the years I keep hearing that the reason kids do poorly is because the teachers are paid badly and the classes are too large.  So the nation worked diligently to raise the pay and reduce the classes.   They claimed the pay still wasn’t high enough and the classes were still too large.  For fifty years I have heard that and the kids nationwide are still performing worse than ever, although by changing the tests and helping them to cheat on the tests they have gotten better results.  Yet when I went to school in the fifty’s it was not unusual to have over 30 kids in a class and there were still seats that were empty; the teachers made a fraction of what they are making now and the kids all came out knowing how to read, write, spell, add, multiply and subtract.  That is the historical foundation, that is reality!  Class size and low pay apparently didn't have a negative impact on the work performance or work ethic of teachers of that era.  

The final argument by the unions and the teachers is that the parents stink, and that is why the kids do badly.  Well, I agree to that to a large degree, but if the reason these children are failing is because of circumstances beyond the control of teachers please explain to me how giving them more money and benefits is in some way going to give these children a good education? Babysitters do a much better job for a lot less money….after all ……they just watch children also.  Furthermore; is it possible Strongsville students seem to do better than others may be for reasons that have nothing to do with the quality of the teachers? 
Perhaps there is an experiment we can try. Let’s take the teachers in the Strongsville system and swap them for the teachers in the worst performing school in Cleveland and see what happens at each school.    If the Strongsville teachers can turn that school around then I say give them the raise.  If they don’t…..fire them!  If the teachers that come from the failing school can continue or increase the performance of Strongsville students; hire them instead.  But we need to get this.  The system is completely unsustainable as it stands and the only real solution is competition.  We need to give the schools back to the parents and the only way to do that is through vouchers, and the ultimate elimination of the teacher's unions! 

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