LaborPains.org

We’ve previously criticized the Economic Policy Institute (EcPI) for their misleading use of data in a series of studies on public employee compensation.

Well, they’re at it again. In a new report called, “The Teaching Penalty: An Update Through 2010,” three EcPI economists claim that public school teachers suffer a 12 percent wage penalty compared to similarly educated workers in the private sector.

But just how similar are private sector employees to their public sector counterparts?

A JOB FOR LIFE

As the chart above demonstrates, state and local public sector workers enjoy a layoff/discharge rate that’s almost three times lower than the private sector.

That’s especially true with public school teachers, most of whom receive “tenure”—a virtual guarantee of life-time employment—after only a few years on the job. Among tenured teachers—even below-average tenured teachers—the chances of losing your job are less than 2 percent nationally. In some states the firing rate is less than 1 percent.

Contrast that to the private sector, where bigger risks and bigger rewards exist. In the private sector, you’re not just promoted based on how many years you’ve worked, or how many obligatory degrees you’ve earned—you’re promoted (and paid) based on hard work and ability. If you don’t perform, you’re at risk of losing your job.

If union supporters want to see equal paychecks, they need to be willing to accept judgment systems where pay equals performance and where the risk of losing your job for failing to perform is real. (Of course, they’re not willing to accept anything of the sort).

A BETTER COMPARISON GROUP

Since comparing teachers to everyone in the private sector is broad and misleading, a more appropriate comparison would be people who do a similar job in the private sector—namely, private school teachers. The US Department of Education collects such data, and it’s available for school years as recent as 2007-08.

The chart at right (courtesy of AEI’s Mark Perry) demonstrates that private school teachers with an equivalent level of education earn considerably less than their public-sector counterparts. To take one example from Perry’s post, a public school teacher with one year or less of experience makes the same amount as a private school teacher with 25 to 29 years of experience.

In separate results available on Perry’s blog, he shows that the private-sector “penalty” holds up across education level as well.

What’s the bottom line? Our belief is that good teachers are generally underpaid for the value of their skill and their impact on society. But we’ll never get to the point where there is consensus on that idea until it is possible to remove those teachers who should not be in the classroom.

And when a research group that receives hundreds of thousands of dollars from teachers unions tells you that the teachers in those unions are underpaid—and suggests that they need to be paid more, regardless of performance—it should be taken with at least a small grain of salt.

Since the governors of Wisconsin and Ohio put an end to doing business-as-usual with public-sector unions, nearly 750 bills have been introduced by fiscally responsible legislators (or at least those trying to be) in almost every state. Most reports suggest the obvious: that this is a bad thing for unions and their lockstep members, of course.

The Los Angeles Times is by no means a cheerleader for these predominantly Republican state legislators, but the Times did manage to mention a few noteworthy facts on their behalf (via information it gathered, in part, from the National Conference of State Legislatures):

• Nearly half of states are considering legislation to limit public employees’ collective bargaining rights.
• A number of states are considering bills that would limit unions’ ability to collect dues from public employees.
• Other bills would eliminate a requirement that workers covered by union contracts pay union dues or fees.
• [P]roposals to roll back pensions are gaining steam.

We wouldn’t say that the days of public officials and workers being bullied into submission by union leaders are coming to an end, but the tide may just turning in favor of the taxpayers who’ve been footing the bill.

The Economic Policy Institute: STILL Wrong on Public Employee Compensation

—Center for Union Facts—

Despite statements by labor unions and their supporters that a sizable compensation premium is a benefit of union membership, the Economic Policy Institute (EcPI)—with the assistance of associate professor Jeffrey Keefe of Rutgers University—has gone to great lengths to argue that this compensation premium doesn’t hold in the public sector. Specifically, EcPI and Keefe argue that public sector workers suffer approximately a four-percent compensation penalty when compared to similar workers in the private sector.[i]

Criticism of Keefe’s original study demonstrated that claims of a compensation penalty were off the mark. An analysis from the Center for Union Facts that includes all relevant employees and properly accounts for the size of their employer demonstrates that public employees receive a compensation premium of at least 5 percent over their private sector counterparts. Others suggest that properly accounting for the value of public sector job security, retiree health benefits, and pension funding could create an even larger premium—as high as 30 percent.[ii]

In a recent Issue Brief, Keefe doubled down on his assertion that public employee union leaders are ineffective at doing their job—specifically, that there is no public employee pay premium.[iii] Keefe dismissed our criticisms of his original study as “desperate,” “unsound,” “inappropriate,” “unreliable,” and “incorrect.”  Strong words—but unfortunately for Keefe, they’re not backed up by equally strong facts.

MISSING EMPLOYEES

The Center for Union Facts (CUF) criticized Keefe’s original analysis because he excluded part-time, full-year employees, including one-quarter of all teachers (a major public sector occupation). In total, that means approximately 12,700 people were missing from his analysis, an exclusion that made the public employee pay gap appear smaller than it otherwise would have been.

In his rebuttal, Keefe ignores this point. Instead, he defends his decision to exclude all part-time employees—something that CUF never criticized. This clever bit of rhetorical misdirection makes it appear that Keefe and EcPI address our criticisms while actually ignoring them.

Even if Keefe had been correct in his decision to exclude part-year full-time employees (including teachers) from his analysis, he still should be analyzing a sample of approximately 60,000 people. Instead, he’s looking at 44,280—over 15,000 fewer people than there should be for this study to be accurate.

In total, Keefe left out about 40 percent of the employees who should have been included in the analysis—28,213 people. It’s unclear whether they were excluded intentionally, or because of lack of knowledge of the data being used. What is clear is that the tens of thousands of missing people in Keefe’s analysis seriously biased his results.[iv]

UNREALISTIC ASSUMPTIONS

CUF also criticized Keefe’s original analysis for inappropriately controlling for the size of an organization that an employee works in. Keefe assumed that any employee currently working in state government would otherwise be employed in a large private sector business with 1,000 or more employees. It’s like arguing that every tech support person in the Department of Motor Vehicles is qualified to work at Google or Microsoft—a plainly unrealistic assumption.

Once again, instead of responding to our criticism in his rebuttal, Keefe ignores it. He defends his decision to include a con

trol for organization size—a decision that CUF never criticized (and, in fact, agreed with, even though we disagreed with the manner in which he controlled for size). This rhetorical sleight of hand again makes it appear that Keefe addresses our criticisms instead of cleverly avoiding them.

As the chart below demonstrates, well over half the employees in the private sector are employed by companies with fewer than 1,000 employees. Keefe’s unrealistic and inaccurate assumption that each state public employee would be qualified to work in the largest size company (with traditionally better benefits) significantly biases his results. Correcting for this error alone turns a public employee compensation penalty in the range of 2 to 4 percent into a compensation premium of 3 percent.



CONCLUSION

In his original analysis released by the Economic Policy Institute, Dr. Keefe found that public employees suffered a 4 percent compensation penalty relative to similar employees in the private sector. Correcting for errors in that analysis, the Center for Union Facts demonstrated that the 4 percent penalty is actually at least a 5 percent premium—a 9 percentage point margin. Keefe and EcPI made an attempt to defend their errors, but—as we’ve shown here—those defenses amount to more rhetoric than substance.

The conclusion of our original piece still stands: public employees are overpaid.

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[i] Jeffrey H. Keefe. “Debunking the Myth of the Overcompensated Public Employee.” Economic Policy Institute, September 2010.

[ii] Andrew Biggs and Jason Richwine. “Are California Public Employees Overpaid?” Heritage Foundation Working Paper.

[iii] Jeffrey H. Keefe. “Desperate Techniques Used to Preserve the Myth of the Overcompensated Public Employee.” Economic Policy Institute, March 2011.

[iv] See table A4 in “The Economic Policy Institute is Wrong: Public Employees Are Overpaid.” Center for Union Facts.

Today, the Center for Union Facts released a new analysis proving that public sector employees, on average, earn five percent more in wages and benefits than their counterparts in the private sector. This flies in the face of data from the Economic Policy Institute (EcPI), a “think tank” that has taken millions from labor unions and has released a series of studies making the counterintuitive claim that public sector employees are underpaid by four percent when compared to those in the private sector.

Redoing the same analysis from EcPI’s study, the Center for Union Facts controlled for two key factors that EcPI improperly accounted for: private sector business size and the treatment of full-time, part-year workers (a category that includes roughly one quarter of all teachers). When those two factors are properly considered, the results reverse themselves: public sector, taxpayer-funded employees actually enjoy a compensation bonus of at least five percent.

“We have been hearing for months now about the underpaid public sector workers from outfits that are funded by public sector unions, an obvious conflict of interest,” said Rick Berman, the executive director of the Center for Union Facts. “Unfortunately, the study’s author made two key errors, both of which coincidentally skew the results in the direction that labor unions support.”

The argument that public workers are underpaid has been made in order to deflect attention from public pay in states that are experiencing multi-billion dollar budget gaps.

“The Economic Policy Institute study assumes that every state employee would otherwise be working in a large private sector business  with 1,000 employees or more,” Berman explained. “Using this assumption is like saying that every computer tech in the state capital would qualify for a job at IBM – it’s bogus, and it creates a fictitious gap in wages that EcPI was more than happy to exploit for political gain. They also excluded full-time, part-year workers like certain teachers and recent retirees, another move that inflated that false deficit.”

Berman continued: “And that doesn’t even include other unaccounted for factors, like the ironclad job security in the public sector and the fact that most teachers’ full-time salary covers a work year only 36 weeks long. In times of economic distress, we all have to give a little back; public sector unions can’t hide behind the false pretense that their members are ‘underpaid’ any longer.”

Click here to read the report.

I love every single sentence of this story. You simply must click through to read the whole thing. Some choice bits:

Cops booted an unruly group of city teachers union officials from a posh Albany eatery after they caused a ruckus over their dinner tab, the Daily News has learned.

Paul Egan, the union’s political and legislative director, set off the fracas – claiming the quail he was served, and finished, wasn’t large enough – sources said.

After being convinced by the fuzz to pay his tab, Egan then tried to figure out if he could stiff the working Joes who manned his party’s three tables:

Officers told Egan the dispute was a civil matter and ordered him to pay the bill – to which he followed up by asking if he was required to leave a tip, sources said.

Ah, union bosses. Friends of the working man! Perhaps the best part of this story is that Egan has actually done this before:

“He’s done this more than once, though he never got escorted out by the police before that I know of,” the source said.

The source recounted Egan loudly complaining during a Christmas-time lunch that he didn’t get enough meatloaf and mashed potatoes.

Photo via MissTessmacher.

We’re often told that to get better educational outcomes, we just need to spend more money. If we opened up the pocketbooks a little more, we’d see things turn around.

Unfortunately, throwing more money at the problem won’t solve anything. Until recently, the United States increased spending on education virtually every year on a per-student basis. As the American Enterprise Institute’s Rick Hess noted in the introduction to a Stretching the School Dollar, a collection of essays on education reform he edited, “Per-pupil spending today is roughly double (in inflation-adjusted terms) what it was in 1983.” Test scores, however, have stagnated.

You can see this dynamic at work in individual states. Consider Wyoming. Wyoming has the sixth-highest per-pupil spending rate on education of any state at $13,840. When cost of living is taken into account, Wyoming actually ranks first. We can all agree that Wyoming is spending a lot of money on education.

Yet Wyoming’s educational outcomes are, at best, average. They rank 27th in graduation rate, according to the National Center for Education Statistics (NCES). ACT Inc., which administers the ACT test, reports that only 17 percent of Wyoming students who took their college entrance exam met the benchmark for college readiness in English, math, reading and science. Education Week gave Wyoming a D-plus for K-12 achievement despite giving them an A for spending. We can all agree that Wyoming’s public schools are lacking when it comes to results.

Studies have shown that the most important in-class factor when it comes to student achievement isn’t higher spending or smaller class sizes or any of the other “reforms” that teachers unions argue for. No, the most important factor is teacher effectiveness. Having an effective teacher two to three years in a row can even overcome achievement gaps seen between races and economic gaps. Hoover’s Eric Hanushek estimates that replacing the bottom six to ten percent of teachers with competent educators would spring the United States into the top ranks of international testing.

I didn’t pick Wyoming at random: That state’s legislature is currently considering a parcel of education reform bills that would amend “tenure” — the cumbersome process of replacing an ineffective teacher that can take months and cost tens of thousands of dollars in legal fees — and allow administrators more leeway in getting rid of bad teachers. Wyoming has finally realized that throwing more money at America’s education problem isn’t the answer — getting bad teachers out of the classroom and good teachers into the classroom is.

Unfortunately, the Wyoming Education Association is pushing back, and legislators have inserted language into the bill that weakens it. Instead of being able to fire teachers for “any reason not specifically prohibited by law” — i.e., for racially or sexually discriminatory reasons — the law proposes that administrators must have “good or just cause” to fire a teacher. While that sounds reasonable, the fuzziness of the phrase “good or just cause” (and the lack of legal definition as to what constitutes “good or just cause”) means that there will still be months of hearings at great expense to school districts to get an ineffective teacher out of the classroom. In other words, not very much will have changed.

It’s time for Wyoming to step up for their kids. To learn more about what’s going on in the Cowboy State, check out our new webpage, StepUpWyoming.com.

Yesterday, the New Jersey Education Association breathlessly announced that they were holding a press conference today to announce a bold new plan that would streamline the process required to remove teachers from classrooms. Today, they revealed their plan. No, they’re not getting rid of tenure or making it easier to fire a bad teacher. Instead, they want to take tenure cases out of the courts and hand them to arbitrators.

Pardon me for being underwhelmed.

In theory, it’s not a terrible idea. The court system is by no means the ideal place to settle disputes between bosses who want to fire incompetent employees and incompetent employees who think that they deserve to have a job for life and shouldn’t be held accountable for their failures. In practice, however, arbitration is just as complicated, time-consuming, and expensive as using the court system. Remember the infamous “rubber rooms” in New York City? They came about because of the slow nature of arbitration proceedings. From the definitive New Yorker piece on rubber rooms:

When the bill for the arbitrator is added to the cost of the city’s lawyers and court reporters and the time spent in court by the principal and the assistant principal, Mohammed’s case will probably have cost the city and the state (which pays the arbitrator) about four hundred thousand dollars.

Nor is it by any means certain that, as a result of that investment, New York taxpayers will have to stop paying Mohammed’s salary, eighty-five thousand dollars a year. Arbitrators have so far proved reluctant to dismiss teachers for incompetence. Siegel, who is serving his second one-year term as an arbitrator and is paid fourteen hundred dollars for each day he works on a hearing, estimates that he has heard “maybe fifteen” cases. “Most of my decisions are compromises, such as fines,” he said. “So it’s hard to tell who won or lost.” Has he ever terminated anyone solely for incompetence? “I don’t think so,” he said. In fact, in the past two years arbitrators have terminated only two teachers for incompetence alone, and only six others in cases where, according to the Department of Education, the main charge was incompetence.

Klein’s explanation is that “most arbitrators are not inclined to dismiss a teacher, because they have to get approved again every year by the union, and the union keeps a scorecard.” (Weingarten denies that the union keeps a scorecard.)

This is the reform that the NJEA thinks is going to make all the difference in the world? The introduction of arbitrators? Either the NJEA is stupid or they think that we’re stupid. It’s no wonder that NJ Gov. Chris Christie has been running circles around them.

Cognitive dissonance is the holding of two diametrically opposed ideas at the same time and believing both of them equally. I think of this phrase often when confronted by the demands of teachers unions. On the one hand, the unions believe that teachers are incredibly important to the development of children — that they are dedicated educators who can change the lives of any child through their efforts.* On the other, unions resist methods to judge the efficacy of educators because, they claim, factors for success in school have little to do with what goes on in the classroom and everything to do with factors out of their members’ control: poverty, parental involvement, and other factors are more important, they claim.

In other words: Pay teachers more because they’re incredibly important, but don’t hold them accountable because they’re not really that important. This is textbook cognitive dissonance.

I again thought of that phrase while reading this satirical “apology” from a teacher who received a poor evaluation. He sarcastically complains

Some people would have you believe that the achievement gap is the result of s—y parenting, poverty, and toxic neighborhoods. I am here to tell you that these people are pussies and they don’t believe in children. I have allowed them to corrupt me. The intergalactic achievement gap is my fault and mine alone.

The sarcasm, it’s worthy of The Onion! (Or not.) In another post, this anonymous teacher whines about getting a bad evaluation:

I had my first evaluations and debriefs in the last several days. The outside evaluator was quite friendly and more or less thought I was doing a pretty good job. She rated me an “effective” teacher.

The inside people, not so much. Ineffective. I am horrible.

Our evaluation system is based on a series of complex rubrics, because I don’t have enough rubrics in my life already.

Now, without knowing exactly where this anonymous teacher works it’s impossible to tell what sort of evaluations he’s being judged by. But if it’s anything like Washington, D.C. — where simple classroom checks were used to give virtually every single teacher a passing grade before the introduction of the “complex rubrics” that comprise the IMPACT system did a better job of judging teachers — the fact that he got a lower evaluation by objective measures is exactly the point. Bad teachers need to be weeded out.

Now, maybe it’s unfair to call this educator a “bad teacher.” Then again, maybe it’s not. Here he is in another post:

Being a teacher is like having retarded employees. “How the f–k would I know where your practice test is or where Devonte put your notebook? Keep track of your own s–t and stay awake. You’ll get a C minus … D–n.”

If the “complex rubrics” cost this guy his job, I wouldn’t shed a tear. Would you?

*For the record: I totally agree with this sentiment. A good teacher can work miracles.