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Amidst the wave of teacher strikes that have unfolded this spring, the broad outlines of a sensible deal seem pretty clear. There are several big, interrelated issues on the table:
In short, we need to improve teacher pay, rethink the profession in a way that values terrific educators, and modernize outmoded, unsustainable retirement systems.
Addressing this tangle of issues requires a grand bargain—as piecemeal efforts have a history of infuriating either educators or taxpayers. Reforms without commensurate dollars can smack of a “war on teachers” while spending without reform sows the seeds of taxpayer rebellion. And for those who look at pro-teacher public sentiment and see little cause to worry about backlash, the annual 2017 Education Next survey is instructive. The pollsters did indeed find that 61 percent of respondents supported raises for teachers—but they also found that support plunged when respondents were told how much teachers actually make (as it turned out that they thought teachers earn less than actually they do). Fortunately, there are sensible, win-win ways to tackle this problem.
First, there’s a need for additional taxpayer support in many states. For instance, in one-third of the states, the average teacher earns less than $50,000 a year. Terrific teachers are woefully underpaid and, certainly in those states, average pay should be higher. The argument that teachers in such states deserve a major pay bump—something like 15 to 20 percent over the next few years—has gained currency even with taxpayers and Republican legislators who might normally be skeptical. In a state like Oklahoma or Arizona, that kind of increase requires something like an additional $350 to $400 million per year—aside from any concomitant increase in benefits. So, there’s a need for substantial new dollars, but those dollars cannot simply be funneled into across-the-board increases.
That’s because it’s vital to recognize both that bad teachers are currently overpaid, and that it’s ridiculous to design a system in which plenty of outstanding teachers spend two or three months a year bartending or painting houses. The simple truth is that some educators are especially valuable to their students and schools—they play leadership roles, design curricula, and mentor. Compensation should reflect that. New spending should be linked to turning the teaching job into something that’s more of a full-time profession, at least for those practitioners who want the responsibility (and the accompanying compensation). Currently, for those teachers who are doing great work, want to work year-round, and have districts that would love to employ them that way, the job descriptions and pay scales simply don’t exist. A substantial slug of any new taxpayer investment in pay should help to change that reality.
Finally, while taxpayers will need to pony up, teachers will need to do their part too by agreeing to overhaul outmoded and unduly expensive pension systems. As former Obama administration official Chad Aldeman has calculated, as a percentage of total compensation, teacher retirement benefits cost twice as much as those for other workers (10.3 versus 5.3 percent). Bringing the cost of teacher retirement into line with other workers could account for about one-third of a 15-percent salary increase. Such reforms need to honor promises made to current and near-retirees, while devising more affordable, portable, flexible options for younger employees that will be good for both teachers and taxpayers. Consider Kentucky, the scene of a recent, high-profile battle over pension reform, but where less than one-quarter of teachers remain in the system for 30 years—meaning the fight was about preserving a system that will never benefit most teachers. Meanwhile, Kentucky’s pension reform law makes clear that a state can reform pensions in a way that protects retirees, saves funds, stabilize the system, and offers benefits that are more generous to educators through the first two decades of their careers.
Any deal must also address the crisis of underfunded pensions. After all, nationwide, in 2015, schools had half a trillion dollars in unfunded pension liabilities. Aldeman notes that, for every $10 states and districts contribute to pension plans, seven dollars goes toward paying down past pension debt—and just three to benefits for current teachers. If states weren’t carrying those obligations, which amount to about 12 percent of teacher salary, they could boost average pay by more than $6,500 for every teacher in the nation. It’s critical to tackle this head-on, by infusing funds into pensions now—with the assurance that pension reform now will free up school spending going forward.
None of this will be fun. It will ask more of taxpayers, it will require uncomfortable transitions for teachers, and it will produce uncertainty. It will require political capital and a substantial near-term boost in tax revenue to pay for salary bumps and pension shortfalls, which means the costs happen now and the benefits come later. That makes for an unappealing package. Of course, the upside is that it will benefit students, professionalize teaching, help ensure that taxpayer funds are spent wisely, tackle the pension albatross, and put states on strong, sustainable footing going forward.
Such a deal requires common sense, compromise, and shared sacrifice—qualities that have been in short supply of late. Here’s hoping that our luck is about to change.
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