As the Great Recession slashes local and Federal government tax revenues, public employees
have an asymmetric stake in the game. Including wages, lifetime healthcare and pension benefits,
each one is protecting millions of dollars, while the taxpayer faces death by a thousands cuts:
no single tax/fee increase will be large enough to spark outright rebellion because the
taxpayer's stake in the game is relatively small.
Thus the public employee union members will fight tooth and nail against any reductions
while the taxpayers, though stewing in silent fury over the ever-rising tax burden,
will passively accept the tax increases as long as they are cleverly distributed in small
doses as "fees," "surcharges," etc.
But the reduction in tax revenue is so severe that various public unions are now engaged
in what I term internecine conflict between protected fiefdoms. Where the police,
firefighters, teachers, prison guards, etc. all increased their take of the government swag
together in the flush times, now they are realizing that their enemy is not just the
taxpayer but their public employee rivals.
I should mention here for context that the majority of my extended family are public
employees: Federal, state, and local, firefighters, police officers, teachers and
librarians. Out of 11 cousins and 9 spouses, my brother and I are the only self-employed
entrepreneurs in the lot: a mere 10% of this family group pays their own healthcare insurance
($10K a year for basic/bare-bones coverage),
pays business license fees ($3K and rising), pays self-employment tax (that wonderful 15% FICA right off
the top because we "employ" ourselves), and so on.
So I understand the point of view of the public employee; what I do not know is if they
have any conception of what it's like to be an entrepreneural taxpayer, or if they are
willing to stand in our moccasins for long enough to feel the crushing weight of the
taxes we pay, the insurance we pay and the fact that we have to fund our own pensions,
with no guarantees of payouts or increases.
If they don't bother trying to understand, then when they are swept from their fiefdoms
by insolvency, they may well be clueless as to the causes.
So the choice isn't "retain the status quo or choose some other model," it's
"choose devolution/breakdown/insolvency or a sustainable market-based model."
I say this for the simple reason it is already "obvious" to anyone who examines
the locked-in costs of public employees' pay and benefits and the structural declines
in tax revenues and the decreasing viability of small-business private employers.
The simplest commercial transactions are linear. If one Bosc Pear can be had for fifty
cents, than two Bosc Pears will cost $1.
Similarly, we expect that hiring one stone mason for $100 will result in 200 cinder blocks
being laid, than we expect $200 will result in 400 blocks being laid.
Historically, professional services bucked this trend due to lack of transparency in
deliverables. How does one value the disasters the court shaman's incantations prevented?
Another area that has bucked the linear trend has been those trades that have been
amenable to collective bargaining. "100 miles is a full day's wages. That is in the
contract." Never mind that the train can now travel at 50 miles per hour.
One arena that benefited by being both a "profession" and having the advantage of
"collective bargaining" has been teaching...at least in the North-East and the mid-West.
As a consequence, pay scales drifted away from the linear model.
Disclaimer: my wife is a union-represented teacher and my father was a Middle School
Pay-scales are important because they are a feedback loop that result in changes of behavior.
No system is completely "rational" if simply because of noise and evolution combined with
slip-stick. However, a system that is completely untethered from feedback from the greater
system will end up in the ditch. From the standpoint of the greater system, it will seem
that very large mis-allocations of resources have been institutionalized.
In Michigan, the typical pay-scale for public school teachers is essentially a doubling
from years 0-to-10. The pay increase is linear. That is, the pay of a teacher with 5 years
experience is almost exactly halfway between what a newbie and a 10 year teacher makes.
In Michigan, the typical pay-scale for public school teachers is approximately +30% between
a B.A and a M.A.
Those percentages are uniform across Michigan due to the pattern contract dictated by the
Michigan Education Association.
The rational given is that a first year teacher is not nearly as capable as a seasoned
teacher. Similarly, it is argued that it is "desirable" for teachers to have advanced
degrees, so they should be compensated for their efforts.
Getting back to the Bosc pears: No Child Left Behind mandated standardized testing.
The National Education Association will argue that there is too much statistical and
socio-economic noise to use standardized testing to be useful.
Regression-to-the-mean is a concept that holds that the ratio of signal-to-noise increases
as sample size goes up.
Suppose your entire college GPA waw based on a single exit test. Scary, eh? Suppose that
the test were a single, random question and suppose there was no chance of retaking the
That would be as stupid as drilling a single core sample to determine the size, purity
and closeness to the surface of a massive ore body.
We instinctively know that a single, random data point is of very limited value. We often
fail to appreciate that the phenomena can be worked in reverse to our (greater society's)
Perhaps the signal-to-noise ratio is too weak at the individual teacher level. That is
an argument for another day. I will argue that there should be a superabundance of data
at the macro level to determine just how much more "learning" is delivered by a first
year teacher vs. a second year teacher vs. a fifth year teacher vs. a tenth year teacher.
From ANECDOTAL data, a first year teacher at mid-year will deliver 90% of what a second
year teacher delivers and 75% of what a fifth year teacher delivers. After that, the line
From ANECDOTAL data, a teacher's performance does improve once they attain their Master's
degree, but that is only because they now have time to properly prepare for their day's
work rather than commute and study for their Master's.
From ANECDOTAL data, a teacher having attained a Master's degree does not deliver 30% more
learning than a similarly tenured teacher without a Master's degree and not pursuing a
The beauty is that we do not need to rely on anecdotal data. All that beautiful data is
out there begging to be mined. Why is it not being mined? Who would benefit?
Hypothesis one: The National Education Association already knows that increases in pay
for longevity and education are not supported by data. The NEA and their spawn are
fantastic at collective bargaining. They would be pushing the results of analysis in our
faces if it supported their position. They would not use logic like "desirable" if
they had quantifiable data that supported their position.
Hypothesis one, continued: The Universities already know that longevity and education
based pay scales are not supportable. Heck, they make enormous profits by churning out
pulp fiction Master's degrees. Would the quality of the academic work and research
justify a Master's in any other discipline? Likely not.
Let's see, the College of Math has 23 Master's students seeking a degree in Statistics
(19 of which are from the Orient). The College of Education has 300 Master's candidates.
Hmmm! Do we let a Math genius foreign national pursue a juicy expose and put our profit
cow in jeopardy? NOT!
Hypothesis two: The statistics are too complicated by socio-economic factors, survivor
bias, only the smart-ambitious go for Master's, etc.
Yes the statistics are complicated. However, the body of data is so massive that one
can segregate out some factors, like socio-economics, and still have enough data to perform
good work. Millions of kids come from inner-city zipcodes. That should be plenty for
a good analysis. Millions more come from second-ring suburbs. That should be plenty for
a good analysis. Maybe a Master's has more incremental benefit in Detroit than in
Bloomfield Hills? Maybe not.
Yes there is survivor bias. The standardized testing has been going on for so long that
test scores from teachers who re-careered before their fifth year can be dropped from
the analysis. ANECDOTALLY, some of the improvement in AVERAGE teacher quality improving
years 1-through-10 results from the ill-suited leaving the profession. Automatic increases
in pay only make them hang on longer!
Maybe only the smart and ambitious pursue a Master's in Education and that would skew the
results. One way of testing that is to see how much the non-educational community
incrementally values the MA Education vs. other Master's.
Only commentaries that are too long require a summary. Unfortunately, this one needs it.
-The United States now has enough data, spanning enough years, to develop pay scales
that are rational and do not foster mis-allocation of resources.
-Teacher pay scales are distorted.
-Those distortions cause a misallocation of resources.
-Too many teachers are pursuing Master's.
-Kids who have the ill-fortune of being taught by those teachers do not receive the
education they deserve.
-The Master's, as delivered by the University, is formulated to satisfy the needs of the
contract, not the employer.
-The monetary incentive to get a Master's degree results in districts paying more, and
getting less...at least while the teacher is pursuing the Master's.
-Pay-for-longevity (at least as embodied by the Michigan pattern contract) is a protection
game shake-down that cannot be supported by data.
-Rational pay for longevity will encourage survivor bias and will result in the more
rapid re-careering of the most unsuited for teaching.
-The United States now has enough data, spanning enough years, to develop pay scales
that are rational and do not foster mis-allocation of resources (intentionally repeated).
-It is entirely possible that rational pay-scales will vary by socio-economics of the
The True Believers keep spouting their myths and everybody else dutifully nods. The myths have not changed in 20 years.
Myth: a story or background belief that buttresses a world-view. Myth is often forged in the crucible of a community and the stresses they must collectively endure. Myth give collective identity and bonds communities together.
Thoughtful examination of myth can reveal much about a community's world-view, and perhaps yield clues of how to reshape that world-view.
"I can walk out into industry and make twice as much as I do now." Usually embedded between "The public does not appreciate how hard we work." and "They do not appreciate what we give up because of our dedication to their little brats."
This is my favorite because it is the easiest to puncture.
Me: "What do you make now?"
Me: "What is 'Twice' as much as $70K/year"
Me: "Do you know what percentage of entry level jobs pay $140K/year?"
Me: "Let's make a bet. I will give you $100 if you can show me a legitimate job offer,
tendered to you before January 31, that offers you $140K/year. Otherwise you owe me $100."
The apparent origin of this myth is that first year education majors typically make
about half of what the most lucrative Bachelor's candidates make. That is, a first
year teacher's salary is about 50% of what a typical graduating Petroleum or Chemical
or Software Engineer is offered. It is unspoken that the Engineer in high demand
will be expected to put in 3000 hours his/her first year and that their wages will
not AUTOMATICALLY double, in inflation adjusted dollars, in the next ten years.
So our self-absorbed teacher automatically assumes that EVERYBODY in industry
makes twice what they make because that is the total depth of their research.
"We really do get better for ten years. A teacher with ten years experience really is
twice as good as a first year teacher."
Self reporting is not a robust way of judging quality. The earlier post bypassed the
issue by going to data. Going directly to data is always the best answer.
Paul Slovic chose to research Financial Experts because there is enough real data to
compare self-reported expertise to actual market performance. There is also enough
real data to compare practitioner's self-reported methods to what their actual cognitive
processes are via linear regression.
He found out that new practitioners have a more accurate awareness of their cognitive
processes. Older, "expert", practitioners believed their processes were much more
complicated and convoluted than what was actually the fact. Interpreting what Slovic
wrote, a practioner's judgment of 'goodness' and 'professional growth' is based on
the comfort the practitioner feels rather than any measurable outcome.
A more accurate statement of the myth would be '"Teachers' comfort zone increases for
the first ten years they practice." Referring back to the earlier post, would any
rational person pay a stone mason a bonus because he was 'more comfortable' working
at your job site unless 'more comfortable' resulted in more cinder blocks being laid
in a shift?
"We worked too hard to get those benefits and pay to LET the Administration take it away."
"We worked too hard to WIN those benefits...."
In the speaker's mind, going on strike is working. As the person paying their wages, the
only thing I consider work is effort that directly contributes to the student's learning.
For example, I do not consider the time they spend commuting to be 'working'.
Some of it is MEA rhetoric. Sadly, we think in words and the words we habitually use
first shape our thoughts and ultimately hijack our thoughts. Slogan, chant and jingo
cause thought to atrophy and then serve as substitutes for thought.
In the speaker's mind, Administration is peopled with Ebenezer Scrooge clones who maliciously
want to saw their rice bowl in half. The paradigm that the pie is not just finite but that it
is shrinking is so alien to their world view that they cannot credit it. Economics,
not Administration threatens their rice bowl.
The word "let" leaves me baffled. Conforming to immutable laws of physics are not something
we choose. They are not something we "let" or do "not let" happen. Similarly,
conforming with immutable laws of mathematics (and economics are ultimately mathematics)
are not optional: It is not a matter of "let".
"Let" originates from the rhetoric of collective bargaining. Slogan, chant and jingo
killed thought once again.
I gave additional thought to possible origins of the extremely steep pay increases
associated with teacher longevity. The lens of 'who benefits' helped snap it into focus.
Low starting teacher salaries function as a gatekeeper. Supply and demand. Fewer
entering into the profession makes it much easier to keep the average or total career
wages high. Large annual increases can also be trumpeted as collective bargaining
In the long term, one can expect that the percentage of teachers who came from families
of teachers to rise. Children of teachers do not look at starting salary. They look
at their parents life styles and see top-of-scale wages. The vacations become
foundational expectations for employment. Like royalty, teaching becomes a family thing.
Like royalty, the connections to the larger economy and the plight of the forgotten
man becomes ever more tenuous. NEA propaganda is accepted as a factual representation
of the workplace. Institutional blindness, "over-reach" and hubris result from
substituting negative feedback loops with inward-looking positive feedback loops.