What our Education Reform Idol contestants accomplished this year on collective bargaining and benefits reform
Which of the five states competing to be America's next Education Reform Idol did the most to collective bargaining and benefits during the 2011 legislative session? Consider our analysis below, and attend our event Thursday morning (8:30-10:00AM) to see key players in all five states defend their records in front of a panel of ed-reform celebrity judges?Jeanne Allen, Richard Lee Colvin, and Bruno Manno. And click here to cast your vote for Education Reform Idol.
This year, Florida required public employees to start contributing to their retirement plans. Workers are only asked to kick in 3 percent, but it's a start. (This was enough to spur a lawsuit nonetheless.) The state also increased the retirement age and applied other technical fixes to reduce its liabilities. Overall, the plan is expected to save the state nearly a billion dollars. Collective bargaining was not on the table in 2011, and likely won't be anytime soon. The right to bargain is?enshrined in the Sunshine State's constitution. (That being said, Florida's constitution also frames the state as right-to-work. For teachers, this means that they cannot be required to pay union dues?or strike.)
Illinois saw no action on pension costs or collective bargaining this year. Not a surprise for a Democrat-dominated legislature. The Land of Lincoln?did enact pension reform last year, but the state still faces huge unfunded liabilities. Last year's
Dan Ariely has a provocative but mostly wrong-headed article in today's Washington Post roundtable on the Atlanta testing scandal. He claims that it's inevitable that teachers will respond to high-stakes tests by cheating just as corporate executives act in ethically challenged ways to please their bosses and investors.?But business people all behave differently, some ethically and some not. What drives the difference?
Take Johnson & Johnson during the 1980s Tylenol scare as an example. For decades, J&J has operated based on a credo that permeates the organization. These values have real relevance in the company, and personnel are promoted and developed based on their adherence to the credo. Business school students read cases on Johnson & Johnson's success at developing this corporate culture. When tragedy struck with the Tylenol murders, J&J acted responsibly, even though they weren't responsible for the deaths. Given the culture there at the time, it's hard to imagine them doing otherwise. Yet J&J also measures its profitability and expects employees to contribute to that bottom line.
Ariely glides over this in his "history lesson," suggesting that measuring and evaluating using a specific criterion necessarily causes people to focus only on what's being measured. That's nonsense, and the proof is in the innovative products and services American corporations have developed on the way to creating trillions of dollars of wealth. There are undoubtedly bad actors in the business world, but there are also a lot of
Only halfway through 2011, a number of states have reformed their laws governing public sector workers' benefits, a few of them in dramatic fashion. The need to close the yawning gap between promises made to workers and the dollars saved for them on states' balances sheets is evident. According to a recent analysis, the average household will have to pay $1,398 in additional taxes every year for the next 30 years to fund retiree benefits, with New Jersey taxpayers on the hook for $2,475 per year per household before that state's recent reforms.?Even more optimistic commentators recognize that the funding ratios reported by states themselves rely on rosy assumptions about investment returns that are not likely to be borne out in reality.?Consequently, states have begun to adjust contribution rates, close loopholes, and otherwise modify pension and retiree healthcare benefits.
It is worth noting that most of these reforms leave public-sector workers, especially those newly-hired, worse off. In many states, this is a necessary evil, with budgets straining and taxes being ratcheted ever higher. Some states have done better than others in making fundamental reforms to address the sustainability of workers' benefits without soaking new workers or taxpayers, however. Here are our best and worst of the year so far, recognizing that actions in New York and Connecticut are still pending. Thanks to our indefatigable research intern, Josh Pierson, for digging up some of the details on states' reforms.
Great Britain's largest teacher unions have declared a strike for Thursday over proposed changes to their pensions, and they'll be joined by another 700,000 other workers from the public sector. The strike will likely close a majority of the schools all across the country, even though negotiations with unions over the changes are far from over. A friend of mine who lives outside London reports that although not all of the teachers in her daughter's school are members of the two striking unions, the school will close "for safety reasons."
Commentators in the UK see this as a possible boon for the Conservative/Liberal Democrat coalition's attempts to reform the delivery of education dramatically. Austerity measures to balance the budget may not have left the public at large with much sympathy for workers whose jobs are largely protected and who receive comparatively lavish pensions. Certainly parents are unlikely to appreciate their kids missing out on a day of instruction.
? Chris Tessone
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About the Editor
Bernard Lee Schwartz Policy Fellow
Chris Tessone was a Bernard Lee Schwartz Policy Fellow and the Director of Finance of the Thomas B. Fordham Institute. He has strong interests in governance and education finance, especially teacher compensation and school facilities finance.