Showdown over public employee benefits looming

February 26, 2010|By Ron Smith

Although war is the biggest racket of them all, public education isn't far behind. A wise observer once noted that all things that start as a mission become a business and finally morph into a racket. Judging from several stories in the news this week, it's hard to argue that the gargantuan American education system doesn't fit that definition.

Take New York City and its laudable desire to fire incompetent or even criminal teachers. As The New York Times reports, "The Bloomberg administration has made getting rid of inadequate teachers a linchpin of its efforts to improve city schools. But in the two years since the Education Department began an intensive effort to root out such teachers from the more than 55,000 who have tenure, officials have managed to fire only three for incompetence."

The city has eight attorneys working on this task force at a cost of a million dollars or so per year. Why can't these bad apples be rooted out? Because of the teachers union. In New York, as in most other school systems, firing a teacher is a complex, hugely expensive and mostly futile exercise. The reason for all the lawyers is that a "case" for the firing must be constructed, a process weighed down by endless hearings that mostly result in the targeted teachers spending their work time in the infamous "rubber rooms," classrooms devoid of students, in which they fritter away weeks, months, or years while collecting full pay and benefits courtesy of the taxpayers.

As I've been saying for years, even if one thinks that public education is not as successful at educating our children as we might like, the fact is that the system's actual goal isn't education at all; that's just the ostensible goal. The real one is to construct, maintain and enlarge the educational jobs empire. With that in mind, it's easy to see that the system has been incredibly successful. The problem now is that the faltering economy means the huge pension and health benefit costs mandated by teacher contracts threaten that success.

Early this month, it was revealed that the New York City teachers pension fund had lost 29 percent of its value, more than $9 billion, in the last school year -- at a time when its obligations are skyrocketing. Public employees, such as teachers, enjoy defined benefit pension plans, ones that promise specific payments to a retiree, usually tied to a percentage of that person's final salary.

Because of mounting costs, defined pension plans have become a rarity in the private sector over the last couple of decades. Nongovernment workers generally have to provide for retirement through 401(k) plans, sometimes with employer contributions, sometimes not.

We are in what might be described as a three-tier work force: We have the political class, the people who work for them in government and its minders (the financial and business elites), and the ordinary working person or professional who pays the lion's share of the bill, forking over his or her money to bail out Wall Street, pay for continuously growing government, fund the seemingly endless wars in Eurasia, and also provide for the underclass. The first two tiers are doing well, the underclass is still getting transfer payments, but people in the other group have lost millions of jobs, have lessening faith in the future and are angry at their government. They see that Wall Street is paying itself record bonuses; they see that the average federal worker's salary is a lot higher than the average private-sector worker's (about $30,000 more, according to USA Today) and that government workers also have far more generous retirement and health benefits. They see and they seethe.

A recent poll revealed that 87 percent of Americans are aware of and concerned about runaway public debt. This is pretty amazing, since it's hard to believe that 87 percent of Americans would be aware of any single thing no matter how important.

Teachers aren't to blame for the system in which they work. This is not an attack on them. But when the school board in Fairfax County, Va., urges supervisors to raise taxes by $81.9 million, as reported by the Washington Examiner, and admits under questioning that the need for that is mostly because of exploding pension and medical benefit costs -- well, what Reason Magazine's Nick Gillespie calls "the coming war over public-sector pensions" is getting close, very close.

Ron Smith's column appears Fridays in The Baltimore Sun. His e-mail is

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