In California, public sector unions pretty much run the state government. Government unions collect and spend over $800 million per year in California. There is no special interest in California both willing and able to mount a sustained challenge to public sector union power. They simply have too much money, too many people on their payroll, too many politicians they can make or break, and too much support from a biased and naive media.
The teachers strike in Los Angeles Unified School District cannot be fully appreciated outside of this overall context: Public sector unions are the most powerful political actor in California, at the state level, in the counties and cities, and on most school boards, certainly including the Los Angeles Unified School District. With all this control and influence, have these unions created the conditions that feed their current grievances?
The grievances leading the United Teachers of Los Angeles to strike center around salary, class sizes, and charter schools. But when the cost of benefits are taken into account, it is hard to argue that LAUSD teachers are underpaid.
According to the Los Angeles County Office of Education, the median salary of a LAUSD teacher is $75,000, but that’s just base pay. A statement by LAUSD in response to a 2014 report on LAUSD salaries challenged the $75,000 figure, claiming it was only around $70,000. They then acknowledged, however, that the district paid $16,432 for each employee’s healthcare in 2013-14, and paid 13.92 percent of each teachers salary to cover pension contributions, workers comp, and Medicare. That came up to $96,176 per year.
The Cost of Benefits is Breaking Education Budgets
This average total pay of nearly $100K per year back in 2013-14 is certainly higher today – even if salaries were not raised, payments for retirement benefits have grown. For their 35,000 employees, LAUSD now carries an unfunded pension liability of $6.8 billion, and their OBEB unfunded liability (OPEB stands for “other post employment benefits,” primarily retirement health insurance) has now reached a staggering $14.9 billion. CalSTRS, the pension system that collects and funds pension benefits for most LAUSD employees, receives funds directly from the state that, in a complete accounting, need to also count towards their total compensation. And CalSTRS, as of June 30, 2017 (the next update, through 6/30/2018, will be available May 2019), was only 62 percent funded. Sixty-two percent!
The reason to belabor these unfunded retirement benefits is to make it very clear: LAUSD paying an amount equivalent to 13.92 percent of each employees salary into the pension funds isn’t enough. What LAUSD teachers have been promised in terms of retirement pensions and health insurance benefits requires pre-funding far in excess of 13.92 percent. To accurately estimate how much they really make, you have to add the true amount necessary to pay for these pensions and OPEB. This real total compensation average is well over $100K per year.
To put LAUSD teacher compensation in even more accurate context, consider how many days per year they actually work. This isn’t to dispute or disparage the long hours many (but not all) teachers put in. A conscientious teacher’s work day doesn’t begin when the students arrive in the classroom, or end when they leave. They prepare lesson plans and grade homework, and many stay after regular school hours to assist individual students or coordinate extracurricular activities. But teachers working for LAUSD only work 182 days per year. The average private sector professional, who also tends to put in long hours, assuming four weeks of either vacation or holidays, works 240 days per year – 32 percent more. The value of all this time off is incalculable, but simply normalizing pay for a 182 day year to a 240 day year yields an average annual pay of not $100K, but $132K. Taking into account the true cost of pensions and retirement healthcare benefits, much more than $132K.
This is what the LAUSD teachers union considers inadequate. If that figure appears concocted, just become an independent contractor. Suddenly the value of employer paid benefits becomes real, because you have to pay for them yourself.
California’s Ridiculously High Cost-of-Living
If a base salary of over $70,000 per year, plus benefits (far more time off each year, pensions far better than Social Security, and excellent health insurance) worth nearly as much, isn’t enough for someone to financially survive in Los Angeles, maybe the union should examine the role it played, along with other public sector unions, in raising the cost-of-living in California.
Where was the California Teachers Association when restrictive laws such as CEQA, AB 32, SB 375 were passed, making housing unaffordable by restricting supply? What was the California Teachers Association stance on health coverage for undocumented immigrants, or sanctuary state laws? What did they expect, if laws were passed to make California a magnet for the world’s poor? Don’t they see the connection between 2.6 million undocumented immigrants living in California, and a housing shortage, or crowded classrooms? Don’t they see the connection between this migration of largely destitute immigrants who don’t speak English, and the burgeoning costs to LAUSD to provide special instruction and care to these students?
From a moral standpoint, how, exactly, does it make the world a better place, when for every high-needs immigrant student entering LAUSD schools, there are ten thousand high-needs children left behind in the countries they came from, as well as less resources for high-needs children whose parents have lived in California for generations?
When you make it nearly impossible to build anything in California, from housing to energy and water infrastructure, and at the same time invite the world to move in, you create an unaffordable state. When California’s state legislature passed laws creating this situation, what was the position of California Teachers Association? Need we ask?
The Union War Against Education Reform
Charter schools, another primary grievance of the UTLA, is one of the few areas where politicians in California’s state legislature – nearly all of them Democrats by now – occasionally stand up to the teachers unions. But why are charter schools so popular? Could it be that the union controlled traditional public schools are failing students, making charter schools a popular option for parents who want their children to have a better chance at a good education?
Maybe if traditional public schools weren’t held back by union work rules, they would deliver better educational results. The disappointing result in the 2014 Vergara vs. California case provides an example. The plaintiffs sued to modify three work rules, (1) a longer period before granting tenure, (2) changing layoff criteria from seniority to merit, and (3) streamlined dismissal policies for incompetent teachers. These plaintiffs argued the existing work rules had a disproportionate negative impact on minority communities, and proved it – view the closing arguments by the plaintiff’s attorney in this case to see for yourself. But California’s State Supreme Court did not agree, and California’s public schools continue to suffer as a result.
But instead of embracing reforms such as proposed in the Vergara case, which might reduce the demand by parents for charter schools, the teachers union is trying to unionize charter schools. And instead of agreeing to benefits reform – such as contributing more to the costs for their health insurance and retirement pensions – the teachers union has gone on strike.
Financial reality will eventually compel financial reform at LAUSD. But no amount of money will improve the quality of LAUSD’s K-12 education, if union work rules aren’t changed. The saddest thing in this whole imbroglio is the fate of the excellent teacher, who works hard and successfully instructs and inspires their students. Those teachers are not overpaid at all. But the system does not nurture such excellence. How on earth did it come to this, that unions would take over public education, along with virtually every other state and local government agency in California?
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