Asymmetrical Information - Megan McArdle

09.10.12

Chicago Teachers Take to the Picket Line

Why are teachers willing to walk out?

Mitt Romney has now weighed in on the Chicago teachers’ strike, since presumably we need to know how our future president might handle municipal labor disputes occurring 1,000 miles from the White House.  Clearly, our nation’s bloggers need to weigh in as well.

I will skip lightly over the formalities wherein I declaim that the Chicago teacher’s are (choose one): the underpaid, underappreciated Thin Multicolored Line standing between our children and a lifetime spent running the streets like feral rats/greedy, grasping layabouts with flaccid morals and room temperature IQ whose ultimate goal is to be paid one squintillion dollars for doing absolutely nothing.  I have never, so far as I can recall, met anyone in the Chicago teacher’s union.  The Chicago school system doesn’t seem to do a particularly good job, but then, they have a lot of challenges, and I certainly can’t claim to have made a detailed study of their teacher performance.

But the details of their demands interest me.  So far as I can tell, the dispute centers around five things:

1. Teachers want a 16% salary increase over 4 years

2. Their pension is underfunded

3. They are opposed to “high stakes testing”

4. They are opposed to merit pay

5. They don’t much like charter schools either

Of all these things, the salary demand is the most striking.  In a bad economy, with inflation under 2%, a 16% pay increase is a big hike. And Chicago public school teachers are already pretty well paid, with an average salary, according to Reuters, of about $70,000 a year.  (The Chicago public school system says $76,000).  This does not include their very generous benefits.

What conditions, exactly, make them think that this is a good time to ask for so much more money?  Are they more productive?  Doubtful.  Is the Chicago school system doing particularly well financially?  Ummm, no.  So why the strike?  Emmanuel offered them a raise that would slightly outpace inflation, which seems like kind of a good deal in this job market. Yet the teachers are angrily rejecting it and taking to the picket line.

Perhaps the salary demand is just a bargaining chip, inserted to give them something to bargain away in return for resisting more deeply job-threatening measures such as testing, merit pay, and competition from charter schools.  (Charter school students, it has been observed, are still in school.)  This seems plausible, and explains the passion of the strike.  It may be hard to control cost growth, but not nearly as hard as it is to actually take things away from people.  Chicago public school teachers have planned their lives around the way the school system is right now.  Anything that threatens this status quo is likely to trigger a violent reaction--particularly since jobs from which it is impossible to be fired tend to attract people who are unusually risk averse.

This is why legislators should always think very carefully about extending benefits--to workers, to citizens, to legislators.  These committments essentially become non-negotiable, which in times of financial trouble, can mean “disastrous”.

I assume that Chicago and its teachers will resolve this well short of disaster, probably with the teachers giving up their financial demands, and the city giving up its demands for more accountability and choice.  But as budgets become more and more choked with benefits that cannot be pared back, and legacy costs that were not properly predicted, or funded, I expect to see more of these battles in the coming years.  And I expect some of them to end very badly indeed.