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Pension Pilfery

When Union Bosses Become Employers

Sanctimonious labor leaders treat their employees very differently than their members.

While tales of union hypocrisy are as common as instances of Donald Trump sticking his Ferragamos in his mouth, there is one facet of union two-facedness that is under-reported – the role of union as employer. As mentioned in my post a couple of weeks ago, when union becomes management, it acts like any company trying to protect its bottom line.

In June 2014, the Association of Field Service Employees was upset that its contract had expired, and management had been slow to agree on a new one. Mike Antonucci points out, “This wouldn’t be all that unusual, except management is the National Education Association and AFSE is one of the unions representing staffers.” Clearly photos of picketing workers had to be an embarrassment for NEA, but when the bottom line is at stake, even the largest union in the country becomes a tough-minded employer.

When it comes to pension plans, public employee unions (PEUs) insist on defined benefit pension plans for its members. This means that boom or bust, retired government workers get paid the same amount of money each month in perpetuity. If there is a shortfall – and there invariably is – the taxpayer is on the hook for the difference. (To read about public pension issues and the havoc they wreak, go to PensionTsunami.com.) In a defined contribution plan – the 401(k) is typical for many employees in private industry – workers and their employers set aside a certain amount each month and that money is invested. When the employee subsequently retires, they are entitled to whatever money has accrued in their retirement account.

You would think that staffers who work for PEUs would be “entitled” to a defined benefit pension also. This is rarely the case, however, with the scenario in Philadelphia being the norm. As Watchdog.org reporter Evan Grossman writes, “Pennsylvania labor union leaders blast 401(k) plans they offer their own staff.” Typical of union leaders, Philadelphia Federation of Teachers president Jerry Jordan has long railed against using 401(k) retirement plans for PFT members as a way to curb skyrocketing pension costs. In fact, he and hundreds of thousands of teachers from Philly have been and will be recipients of a defined benefit pension and fight any bill – like Senate Bill 1, which would have moved teachers into a more taxpayer-friendly 401(k) plan.

But what about the 34 office workers employed by PFT? Yup, they are enrolled in a 401(k) plan. And the union leaders have never explained – because they can’t – why defined benefits are good for its members but not for its own staff.

As is well-documented, teachers unions all over the country insist on seniority and tenure “rights” (though these days, union leaders have taken to referring to tenure as “due process”) for its educators. But in March, the California Teachers Association up and fired Katie Howard-Mullins, president of California Staff Organization (CSO), the union for “professional departmental and Regional UniServ Staff.” No reason or explanation was given by CTA for its action. Whether or not Howard-Mullins had tenure or seniority didn’t matter. She got the boot. But CTA members, whether they are pedophiles, sexual assaulters or just plain lousy teachers – are provided much better treatment and much more protection.

CSO called CTA on its hypocrisy in its newsletter, saying that the union did not use progressive discipline, a “hallmark of a positive labor-management relationship” in dealing with Howard-Mullins. CSO summed up its position by encouraging its members to talk to CTA board members and let them know that “the principles of restorative justice, due process, and progressive discipline are not just good for students, not just good for teachers. Those principles should be applied to the people who stand with you every day to make your union stronger.”

Makes sense. But when you are a powerful union, you get to behave any way you want. Fairness, openness and due process are principles that only others must abide by.

Larry Sand, a former classroom teacher, is the president of the non-profit California Teachers Empowerment Network – a non-partisan, non-political group dedicated to providing teachers and the general public with reliable and balanced information about professional affiliations and positions on educational issues. The views presented here are strictly his own.

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Important note for those of you in Southern California: At 3pm on Sunday, September 27th, the California Teachers Empowerment Network, along with the Association of American Educators, will be hosting an informational event in Long Beach. We will examine the Friedrichs and Bain lawsuits which could fundamentally alter the state of education nationwide, affect teacher freedom, and substantially change the political landscape in California.

I will moderate a panel discussion featuring lawyers and plaintiffs from both cases, and an audience Q&A will follow. The event and refreshments are free but seating is limited so registration is necessary To access a poster for the event, go here; to attend, go here.

 

Early Christmas Gift to Children and Taxpayers in Philadelphia?

School reformers in Philly decide to help taxpayers and kids; teachers unions fume.

Philadelphia can be a tough town – so tough, in fact, that in 1968, frustrated and cranky Eagles fans even booed Santa Claus at a late season game. When that didn’t scare off old St. Nick, the hostile fans unleashed a barrage of snowballs at the bewildered and terrified volunteer.

Forty-six years later, and it’s the teachers unions that are chucking venom at the Philadelphia School Reform Commission. First, a little background. The PSRC – an appointed body – was established in 2001 as a response to overall school district ineptitude. It didn’t help much. In fact, just a year ago, I wrote about the school system’s ongoing incompetence and corruption, using a snippet from a Wall Street Journal editorial that spelled out a few of the gory details.

Philadelphia’s schools are a textbook case of chronic, systemic failure. Woeful finances and academics compelled the state in 2001 to install a five-member School Reform Commission. Test scores have improved but are still pitiful. Last year only about 40% of students scored proficient or above in reading on the state standardized test, but 99.5% of teachers are rated satisfactory.

… Teachers also don’t pay a cent for health benefits and can retire with a pension equal to 80% of their final salary after 30 years. As a bonus, the district pays the union $4,353 per member each year to administer dental, vision and retiree benefits. Its health and welfare fund had a $71 million surplus, according to its latest available tax filing in 2011.

The district last year had to borrow $300 million, and this summer two dozen schools were closed and 3,000 employees laid off (including about 600 teachers) to bridge another $300 million deficit. While the union blames state budget cuts, pay and benefit increases resulting from its last collective-bargaining agreement accounted for half the budget hole.

So the kids aren’t learning, the taxpayer is taking it in the shorts, and the teachers unions couldn’t care less.

But change is in the wind.

After 21 months of negotiating and failing to produce a compromise, the PSRC abruptly cancelled the existing teachers union contract. PSRC chairman Bill Green said the move will save the district $54 million this year, $30 million of which would be quickly pumped into schools beset by large class sizes and reductions in arts and Advanced Placement classes. He added that the money “will be invested directly in classrooms, with principals empowered to use the cash as they see fit – to hire a full-time counselor and nurse, perhaps, or to pay for more supplies or after-school programs.”

Additionally, the cash-strapped city will see some fiscal relief. The new plan dictates that teachers start paying, in part, for their own health insurance – between $21 and $71 per month.

So the lot of taxpayers and kids are improved, who is griping? The teachers unions, of course.

Listening to their leaders’ responses, you’d think the apocalypse was nigh. Philadelphia Federation of Teachers president Jerry Jordan angrily described the actions as “union busting.” (No, Jerry, the PSRC is not trying to bust the union; it is merely removing the bloated perks that have been bestowed upon your teachers for years.) He then groused, “We are not indentured servants.” Predictably, Randi Weingarten, president of the American Federation of Teachers – PFT’s parent union – charged into the fray, calling the move (yawn) “a war on teachers.” Weingarten further pontificated, “Three weeks before the gubernatorial election, this surprise early-morning School Reform Commission meeting, lawsuit and notification to employees imposing a contract and compensation cuts can only be characterized as Gov. Corbett’s well-planned Hail Mary ambush.”

Weingarten’s overwrought comments are hardly surprising given her enmity toward Governor Tom Corbett, a Republican. But other PSRC supporters include former Democrat governor Ed Rendell and Democrat mayor Michael Nutter, who remarked, “The action, unfortunately, was necessary, given the fact that the system is broken. There is no more money to be had from anywhere.”

In the midst of all the huffing and puffing, it isn’t clear if the PSRC’s move is even legal. Whether Act 46, the state takeover law, gives the SRC the power to cancel union contracts remains to be seen. We do know that lawyers on both sides of this issue are already working overtime on their arguments.

The situation in Philadelphia could have national implications. Should the courts validate PSRC’s action, it could set off similar motions in other cities across the country. New York City, Los Angeles and Chicago also have too many failing schools, not to mention horribly misallocated funding, which contributes to a crushing debt burdening the already beleaguered taxpayer.

If Act 46 is validated by the courts, the City of Brotherly Love will get a gift that kids and taxpayers deserve. And Santa, preparing for the Christmas season, will save a few lumps of coal for the stockings hanging on the teachers union’s mantle.

Larry Sand, a former classroom teacher, is the president of the non-profit California Teachers Empowerment Network – a non-partisan, non-political group dedicated to providing teachers and the general public with reliable and balanced information about professional affiliations and positions on educational issues.

The City of Brotherly Love (Cain and Abel Edition)

Philadelphia is a city famous for Ben Franklin, the Liberty Bell, cheesesteaks, and now – a miserable and bloated education system.

In what has become an American tradition, another big city mayor has gone to war with “Big Education.”  Like Michael Bloomberg (NY), Antonio Villaraigosa (LA) and Rahm Emanuel (Chicago), Philadelphia’s Michael Nutter is dealing with a failing education system, a bureaucratic Leviathan and a hostile teachers union, collectively known as “the blob.”

As The Wall Street Journal reports,

Philadelphia’s schools are a textbook case of chronic, systemic failure. Woeful finances and academics compelled the state in 2001 to install a five-member School Reform Commission. Test scores have improved but are still pitiful. Last year only about 40% of students scored proficient or above in reading on the state standardized test, but 99.5% of teachers are rated satisfactory.

… Teachers also don’t pay a cent for health benefits and can retire with a pension equal to 80% of their final salary after 30 years. As a bonus, the district pays the union $4,353 per member each year to administer dental, vision and retiree benefits. Its health and welfare fund had a $71 million surplus, according to its latest available tax filing in 2011.

The district last year had to borrow $300 million, and this summer two dozen schools were closed and 3,000 employees laid off (including about 600 teachers) to bridge another $300 million deficit. While the union blames state budget cuts, pay and benefit increases resulting from its last collective-bargaining agreement accounted for half the budget hole.

The Philadelphia Federation of Teachers (PFT) has put out several ads that attacked the mayor, portraying him as an arch-villain. The best known is a video of a Philadelphia mother of four who accuses Nutter of “paying more attention to corporations,” “not doing his job” and that the mayor “should be ashamed of himself.”

Nutter was furious at the broadside and countered with a video of his own, claiming he has actually increased education funding and blames the state – read Governor Tom Corbett – for the shortfall. He ends his video with the charge that the PFT gets “an F in telling the truth.”

But is the governor really the flinty conservative he is made out to be? Maybe not. Again, quoting from The Wall Street Journal,

Mr. Corbett is offering the district a one-time $45 million grant and $120 million in recurring funds from a one-percentage-point city sales tax increase on the condition that teachers accept lower pay and benefits as well as “work rule” changes. The district wants to cut base salaries by 5% to 13% to offset the rising cost of pensions and for teachers to contribute to their health benefits. Yet the major sticking points are Mr. Corbett’s school reforms that would eliminate teacher seniority rights and base future pay increases on more rigorous evaluations that include student learning.

Teachers have little reason to budge since their previous contract remains in effect and they continue to earn raises based on longevity. Thus the union will likely drag out the negotiations until after next fall’s election when they hope to elect a Democratic Governor and renegotiate a bailout without Mr. Corbett’s preconditions.

Not surprisingly, American Federation of Teachers president Randi Weingarten weighed in via a letter to the editor in Monday’s Wall Street Journal in which she also blamed Governor Corbett. She wrote that he “continues to rob Philadelphia’s students of much-needed funding to further his anti-teacher ideology” because he insists on eliminating seniority and demanding more teacher accountability. Weingarten fails to realize that she – as a member in good standing of the blob – is an integral part of the problem.

Sadly, what is happening in Philadelphia is not new or unique. For years now, compliant legislators and school boards in collaboration with insatiable teachers unions have led to an explosion of needless administrators and cushy union contracts which have sent education budgets into the stratosphere. And all the spending has done absolutely nothing to advance student learning. But the era of ripping off taxpayers and kids may be seeing its end-game. We just can’t afford business-as-usual any more.

Teacher union watchdog Mike Antonucci regularly does a terrific job of exposing institutional corpulence. A piece he wrote for the Alexis de Tocqueville Institution back in 1999 is well worth reading in its entirety. Here is a snippet:

There are school districts in America where the superintendent, assisted only by a secretary, is also the principal of the school and teaches fifth grade. In the Philadelphia School District, the superintendent supervises over 25,000 employees and 261 schools. He has a staff of 10. The school board has a support staff of six. The general counsel has a legal staff of 27. These staffers evidently can’t speak with the public or the legislature on their own, so there is a communications and government relations staff, which consists of 13 people. Then there is transportation, school safety, human resources, leadership and learning, purchasing and warehouse, print shop, etc. According to the district, the total administrative staff for 1997-98 was 1,474. But “administration” is a term open to interpretation, and we should make no rash assumptions.

The district defines the following personnel as “providing direct services to students.” They include 12,005 classroom teachers, 3,750 assistant teachers and classroom assistants, and 413 principals and assistant principals. After that, some job titles are self-explanatory and others, well, are not.

(All figures are for 1997-98. Source: School District of Philadelphia 1997-98 Amended Operating and Grants Fund Budgets)

Job Title                                              Number of Employees

Department Heads and Coordinators        103

Non-professional Supervisors

and Technical Staff                                      197

Secretarial/Clerical                                      736

School Coordinators, Bilingual, Computer

and Science Lab Assistants                         371

School Safety Officers                                  337

Non-teaching Assistants                            630

Nurses/Health Providers                           305

Guidance Counselors                                403

Psychologists/Therapists                          116

Administrative Assistants and Facilitators   218

Librarians and Assistants                           231

Food Service Workers                                1,098

Noon-time Aides                                         1,045

Bus Drivers                                                   677

Bus Attendants                                            569

School Aides                                                  81

Warehouse                                                    20

Maintenance                                               534

Custodians and Building Engineers         2,361

Public education lost its way a while ago. Having become a “jobs program” for adults, the real mission of public education – teaching children – has been lost and our country has been suffering greatly because of it. The finger-pointing in Philly between the union, mayor and governor is something of a side-show. (Philly has cut back on bloat, but it is too little, too late.) While it may be politically difficult, one way to achieve effective change is to – as Antonucci says – “break ‘em up.”

He’s right. Subsidiarity – the principle of devolving decisions to the lowest practical level – works. Smaller and leaner school districts are more accountable to families and taxpayers, while the large centralized and unionized blobs are doomed to topple – victims of their own excesses. Philadelphia is just the latest example.

Larry Sand, a former classroom teacher, is the president of the non-profit California Teachers Empowerment Network – a non-partisan, non-political group dedicated to providing teachers with reliable and balanced information about professional affiliations and positions on educational issues.