Wednesday, May 26, 2010

Are Teachers' Unions Bankrupting States?

How many non-government workers receive guaranteed pensions? Almost no one. Yet, teachers and other government employees have negotiated so many benefits for themselves, they are hurting future generations of students and teachers:

Although it is generally acknowledged that education is the foundation of every modern society’s future prosperity, schools unfortunately will have to compete with retirees for scarce dollars. This competition is uneven, because retirees have a legal claim on promised pension benefits that supersedes schools’ budgetary needs.

Basically, the more generous we become with pensions, the fewer benefits we can give current teachers and current students. For example, let's assume a state has 100 dollars in tax revenue. If it has to pay a retired teacher or police officer a pension almost equal to his or her regular salary, that's 90 to 100 dollars that the state can't use on hiring a new teacher or a new police officer. Or, as the report states, "Education finance is a zero-sum game: the more that is spent on closing pension funding gaps, the less there is to spend on reducing class size or improving instruction."

Note: "California, the most populous state, has the largest unfunded teacher pension liability: almost $100 billion." Yes, that's billion with a "b." See here for more.

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