Thursday, March 20, 2008

Teacher Pay (got your attention?)

This note is prompted by a comment by Jim Fedako in yesterday's post "You Think We've Got Problems." Mr. Fedako is a resident of the Olentangy Local School District, and a former member of their school board. Mr. Fedako said:
The current system benefits the staff as they continually receive salary and benefits increases twice that received by those in the private sector... Public schools continue to increase costs at an unsustainable rate.

Mr. Fedako believes the root of school funding problems is teacher pay. I disagree. I think it's ignorance and apathy (don't know / don't care). Quite a few people in our community have the mistaken belief that I am critical of teacher pay. However, at no time have I said teachers are overpaid.

From the beginning, the mission of this blog/website has been to educate and inform the people of our community about the economics of our schools (a task which should be a primary goal of our school leadership), as well as the political landscape as it affects our schools. The hope is that with better, and more accessible information, the people of the community would come together to fix economic problems, not just complain about them.

One of my very first blog articles, written over a year ago, described what I had just learned about teacher compensation. Prior to this article, I don't recall anyone saying that more than 85% of the operating budget was spent on salaries and benefits for the teachers, administrators, and staff. In fact, at a School Board meeting not long afterward my article was posted, I heard a school board member ask the Treasurer, during a regular meeting, if it was true that 85% of the budget was spent on salaries and benefits.

Since that time, I've learned more and more about how teacher pay works, and have written several articles describing what I've learned (6/30/07, 10/18/07, 11/22/07). In none of these articles do I say I think teachers are overcompensated.

But I'm not happy with the system.

A few years back, I remember a TV special about the diamond business. It starts in the mines (talk about being undercompensated, think about these miners), and ends in the jewelry store. The stuff that goes on in the middle is a black box to most of us.

One role was that of the diamond dealer. For a long time, the diamond market was controlled by deBeers, and they made all the rules. One of the rules is that not just anyone can buy raw, uncut diamonds from deBeers - you must be authorized by deBeers, and there aren't many people authorized to do so. But these dealers don't just go to some wholesale store and pick out the diamonds they want to buy. Instead, they get a call from deBeers saying their "box" is ready for pickup, and that the price is $1 million or whatever.

That box is about a quarter the volume of a shoebox, and holds a certain number of total carets of diamonds. The catch is, the wholesaler doesn't get to look inside the box before he hands over his money. He doesn't know if it's 100 stones or 1,000, or if they're large or small. The rule deBeers has set is: Buy the box for the price we say - sight unseen - or we'll terminate your status as an authorized buyer.

So if you want to be in the diamond wholesaling business, you buy the box. One dealer opened his box for the TV cameras. What he found was about 100 stones, some pretty good sized but potentially flawed, some around one caret in their raw form, and some smaller than that. From that point, it would be up to the skill of the diamond cutters to maximize the value of the contents of the box. The wholesaler said sometimes he made a lot of money, and sometimes he didn't even recoup his cost. This box looked promising, he said.

I think this is a lot like the way our employment relationship with the teachers works. Their pay is based entirely on educational level and length of service, and the compensation is spelled out in one big contract that treats the teachers as an amorphous mass rather hundreds of unique individuals. Like the diamonds in the box, some teachers are worth a lot, and some not so much. Yet we pay the same per caret for both kinds.

One often hears the statement that teaching is a vocation, and they don't do it for the money. But they don't do it for free either. The current and strained contract negotiations between the School Board (representing the community) and the teachers' union bears witness to that.

Are there people in the community who believe teachers are overpaid? Absolutely. Are there some who believe the teachers are underpaid? I'm sure there are. The vast majority of us are, I believe, unable to form a clear position on this. And I think it has something to do with the collective bargaining process, which is much like buying that box of diamonds without getting to look inside.

Our economy is in a time of stress right now. The collapse of the housing market has left many of us in a situation where our largest investments - our homes - have gone down significantly in value. We don't even know how much, because many houses sit on the market for months - even years - seeking buyers as prices continue to drop. And the rapidly rising prices of oil and corn are driving up prices for virtually all the things we buy. Few of us in the private sector are seeing increases in pay to match the price escalation. Luxuries are being pushed out of the budget as we become cautious with our resources. If you haven't already done so, I again recommend watching this interview with Elizabeth Warren to hear a good discussion of the precarious situation of the American middle class.

So teachers, I hope you understand it when those of us in the private sector express a little envy toward the deal you have: decent salaries, steady increases, excellent health coverage which up to now has been free to you, and promise of a nice pension and the ability to retire in your 50s. While few of us have the skills and demeanor (and courage!) to walk into a classroom every day as you do, more than a few of us would trade our employment arrangement for yours.

What do you think the diamond dealers would do if deBeers suddenly doubled the price of "the box?" I think one reaction would be for the dealers to say "Not unless we can look inside first!" They would want to be able to take the inferior stones out of the box and replace them with superior stones.

That's all I've been asking. As the cost of the teacher corps continues to go up, especially in relation to the private sector, I want someone to look inside the box and replace the inferior members with superior members. We all know there are ineffective teachers in the system. Our kids have had some of them. We remember the deadwood teachers from our own school days. And yes, I have no doubt that administrators can be divided in the same way.

There are two groups of people who can carry out this pruning activity.

One group is the administrators. As the owners and customers of the school district, it is reasonable for the people of the community to expect that the administrators would carry out this function on our behalf.

The other is the teachers' union itself - the Hilliard Education Association. One of the roles of a professional association is to ensure that its members live up to its standards. I complained to a lawyer friend once that his kind were responsible for driving up the cost of healthcare because of all the malpractice lawsuits. His rebuttal was that it was bad doctors who were driving up the cost of healthcare, and that was because the professional medical associations weren't doing enough to get them out of the system.

While not everyone will agree with my friend, his point has merit. In addition to all the good things they do, professional associations and unions can serve to protect individuals who have no business being in the profession.

If the HEA wants to show itself as compassionate, then take the steps necessary to help ineffective teachers shift to a different career path. But take seriously your role as 'keeper of quality' within your ranks.

And if you want the community to continue to underwrite your compensation expectations, you must assure us that the money is being well spent - not in aggregate, but in every classroom and during every hour.


  1. Makes sense to me. When I was in high school, we would go from one room where there would be some serious misbehavior - talking, throwing books or paper wads (once even a water balloon burst on the blackboard!)... Then we'd go to the next period - same kids! - and there would be absolute silence. The teacher was different, not the kids.

    I've joked in the past that I think we should get rid of all the buildings and administrators and pay teachers $200K a year where they would teach under heated tents. The $200K might, in theory, create so much competition for teaching jobs that only the best would get them in the first place.

    Because teacher's unions are like death and taxes - with us for all eternity since public schools are defacto monopolies - we'll never be able to weed out bad teachers. But maybe we can prevent them from getting jobs in the first place.

  2. Paul,

    You are not making sense here.

    We all agree with the 85% figure, and we all also agree that teachers make up the largest slice of that piece of district budgets. And, I think we can safely assume that a district's teacher negotiated agreement drives the agreements with the other unions.

    So, what is driving costs if not the salaries and benefits of teachers?

    You can't wave that away. It's reality.

    Another large component of increasing school expenditures is the continued reduction in staff-to-student ratios. Education is the one field where less is produced per employee year over year. And, this is true despite large "investments" in technology, education theory (think whole language), etc.

    When I first became involved with public education, the standard was 17 to 18 certified staff per pupil. That ratio -- in suburban districts at least -- is now closer to 14 or 15 to one. This reduction alone is responsible for the last Olentangy levy.

    Finally, without a market, there is no price or value for teachers in public schools.

    A market does exist for teachers in private schools. But, as we all know, private school teachers are paid much less than public school teachers.

    An aside: COTA bus drivers make less than Olentangy bus drivers (last time I look).

    Kruschev, former Soviet Premier, once joked that the Soviets could never conquer Switzerland as they needed at least one free market in order to derive a price structure.

    In that vein, public schools need to look to the private school market in order to derive teacher salaries.

    That is exactly what the state does for other public sector employees. The state uses data from the private sector in order to set its wage rates and classifications.

    Why is education any different?

  3. Paul, I think those who interpret your comments as anti teacher or
    against raises are simply interested in protecting the status quo.

    It would appear that since the election we have little news being shared that it will be business as usual.

    I believe that the majority will continue to vote no until their is some recognition on the part of
    the teachers group, board, and admin that the expenses needed to be reined in is the huge increases in pay, job security, time off that no one else is receiving in the private sector

    It would be prudent, given our
    state funding freeze that wages and benefit rise more slowly.
    With the magic number at 89% that is where we cut. An extra course offering may be a victim, but that is the way it is.

    What groups within the district
    should be stepping up to provide information.

    Shouldnt the district get up on
    telling us amoung the local candidates for the fall who will support us, not their party


  4. Mr. Fedako:

    Sorry that you don't understand my point.

    My economic philosophy is very much oriented toward having prices set in the free market. I have even gone so far as to say schools should be funded by a Friedman-style voucher system which makes schools compete for students, and would therefore also lead to competition for teachers that would attract students to the school. This is exactly the way it works at the collegiate level - why not for primary/secondary as well?

    By the way, did you notice a recent editorial in The Dispatch advocating this very thing? They were careful to not use the term 'vouchers' because of the baggage it carries, but the principle is the same.

    But we both know that such a radical shift could happen only in the face of deep crisis, and even then only with bold leadership at the State level, meaning politicians who would have the courage, motivation, and skills to broker a new deal with the OEA and its members.

    The point of this post is to reorient the conversation a little. There will be a teachers' union for the foreseeable future, and it is unlikely that this current negotiation will produce a radically different compensation mechanism.

    So what I'm suggesting is that the teachers' union do two things: a) understand that many folks, especially now in these tense economic times, think that teachers have a very good deal and therefore those folks are not particularly motivated to cough up more tax money to improve that deal when they are concerned about making the mortgage payment (here is a Letter to the Editor from one of their own who gets it); and, b) if they want demonstrate to the public that it's really all about the kids, they propose a mechanism to replace say the worst 5% of the teacher corps with better teachers - and that mechanism can't be merely a popularity contest.

    My firm did business with a Wall St outfit who did exactly this every year - replaced the lowest performing 10% of their team with new folks. The idea was that every year their team got a little better. It sounds brutal, but you know what? The very best graduates fought over chances to join this firm, and the people who thrived in that system had a pride not unlike what you see in a US Marine on graduation day from boot camp, or a kid who makes the OSU Marching Band.

    Competition is not absent in our school culture - look at athletics. The rules of the game dictate the configuration of a sports team. There may have been 10 kids who had dreams to be the Darby quarterback when they made it to high school, but Jeremy Ebert got the job because he was the best. A couple of other kids got to be backups, and the rest had to compete for other positions, or not play at all. The coaches compete for their jobs too. It might not be as easy to cut a coach as it is to cut a player, but a consistently losing coach won't get his/her coaching arrangement renewed if the community is convinced that the coach is the problem.

    Why shouldn't a Math or Language Arts teacher have some competitive pressure as well? I don't know how to measure quality or performance - that's why I'm suggesting that the teachers' union come up with the system.