The prolonged squeeze is also the big squeeze
It’s literally schools vs. nursing homes, argues the Washington Post’s Robert Samuelson in a wake-up-call editorial on the impending pension crisis. What Samuelson called “a prolonged squeeze” from retirement commitments to public employees, we called “the big squeeze” from retirement costs of teachers.
Samuelson makes two fundamental arguments that are the basis of The Big Squeeze: Retirement Costs and School-District Budgets, written by Fordham’s Dara Zeehandelaar and Amber M. Winkler (and based on three technical analyses conducted by Robert Costrell and Larry Maloney):
First, our swelling pensions are vastly underfunded: Some estimates put that liability at a trillion dollars. It’s a topic that came up a lot at our No Way Out? How to Solve the Teacher-Pension Problem event, cohosted with the National Council on Teacher Quality.
Second, cutting pensions is hard: Samuelson is right there, but it can be done. Look, for instance, at Wisconsin, which now requires employees to pay their fair share and gives districts latitude to curtail healthcare benefits, thanks to Gov. Scott Walker’s Wisconsin Budget Report Bill of 2011.
Had Governor Walker not taken action, tough decisions would have had to be made. Would Milwaukee Public Schools have to fire a quarter of its teachers or negotiate a 25 percent reduction in teacher pay? Surely class sizes would have grown, and new teachers would not have been hired. (This is certainly turning out to be the case in Chicago.)
Unless we face the impending retirement costs, Samuelson is right: Schools will literally be fighting nursing homes for public dollars. And within education, we’ll be pitting current classroom costs against commitments made to yesterday’s teachers.