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The
Chicago Public School system is broke. By now you know the score: pension
promises cannot be met and union salaries and benefits are out of line with
reality. Combined with bloated administration costs, the system is bankrupt.
The Sun Times says the best hope is for teachers to accept a wage freeze.
Best Hope? Not so fast.
The contract is not up until 2012, and knowing what we know about unions, the
picture is set for massive teacher layoffs or a gut wrenching strike and
legal battle if the CEO unilaterally imposes a wage freeze.
Please consider No way around CPS
teacher pay freeze.
Chicago
Public Schools CEO Ron Huberman on Thursday painted the grimmest financial
picture the Chicago schools have ever seen.
The budget deficit could top $900 million, a hole so big that Huberman says
he needs major concessions from teachers -- a move that could easily lead to
a teachers' strike if the unions refuse to play ball.
We're not alerting parents to cause a panic or to bash beleaguered teachers.
We're alerting parents now, when there's still time, to try to resolve this
crisis and avoid a strike.
The best hope is for the Chicago teachers to accept a wage freeze.
Huberman can't say that out loud. On Thursday, he simply laid out the sorry
facts of the deficit, saying concessions are one piece of a multi-part
solution. He's courting the unions now, giving them a chance to pick their
poison, hoping they'll offer up cost-saving ideas.
It is nearly impossible to see a way out of this mess -- or a teachers'
strike -- without a wage freeze.
The Chicago Teachers Union contract locks in 4 percent raises through 2012 --
really about 5.5 percent with experience and higher degrees added in.
Eliminating that raise in 2011 saves $135 million.
Undoubtedly, the union will balk at a wage freeze. Already, Union President
Marilyn Stewart has rejected altering the union contract.
In turn, Huberman won't budge, arguing he has no cash to spare -- and he
won't be lying.
CPS' massive budget deficit, Huberman says, is driven by three biggies: a
$138 million drop in tax revenue, $135 million in increased salary costs and,
most significantly, a $280 million increase in its pension bill.
Ron Huberman isn't crying wolf.
It's time for big concessions now -- rather than face massive disruption in
the schools and an ugly and fruitless strike down the road.
Not
Crying Wolf
The article is loaded with sap like the writer's opinion "No one wants
to deny hard-working teachers a raise." In reality, union salaries and
benefits must be brought into alignment with private sector jobs.
The wolf is real. There is no money and tax hikes are out of the question.
With 4 percent raises locked in through 2012, one hell of a battle is brewing.
In theory, there are plenty of things besides a pay freeze that could help.
One thing would be elimination of defined benefit plans for all new hires and
if one got really creative, for all teachers hired in the last 5 years. Of
course one could also cut administrative salaries and staff as well.
Both need to be done.
However, theory is one thing and practice is another. Unions being unions,
and administrators being administrators, neither will be willing to negotiate
a fair compromise. Instead, look for massive teacher layoffs as the union and
administrators throw the kids to the howling wolves.
By the way, I am not talking about just Chicago. Expect to witness a
nationwide phenomenon of teachers unions and administrators combine to throw
kids to the wolves to protect their own cushy jobs.
Addendum:
"LA Girl" just pinged me with ...
I
sat next to a public school teacher at a dinner party last night. He was
saying there is total "war" going on at his school right now
because they are voting on whether to convert to a charter school. He
blatantly, casually said with no shame whatsoever that converting to charter
would be better for the students, but he planned to vote against it because
it wasn't clear his benefits and salary would be protected. He said this same
thing is going on at several other public elementary and high schools in L.A.
Mish
GlobalEconomicAnalysis.blogspot.com
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