Tag Archives: Unions

Administrators over kids: Seven ways Illinois’ education bureaucracy siphons money from classrooms, by Ted Dabrowski and John Klingner

Posted on June 9, 2018 | Leave a comment

Bankruptcy doesn’t just happen, there are usually reasons for it. Read this and you’ll have a better idea why Illinois teeters on the abyss. From Ted Dabrowski and John Klingner at wirepoints.com:

Listen to education officials’ demands for more money and it’s easy to believe Illinois grossly underspends on K-12 education. A $7.2 billion funding lawsuit to double state contributions to classroom spending, a $40,000 minimum wage demand for teachers, and lawmakers’ rejection of limits to school district borrowing might bolster that impression.

But the truth is Illinois already spends a lot on education – more than any other state in the Midwest. It’s just that much of the money is going to all the wrong places.

At $14,180 per student, Illinois spends far more than its neighbors on education – 44 percent more on a per student basis than Kentucky and Indiana, 22 percent more than Michigan and 21 percent more than the national average.

The problem arises when all those dollars are doled out. Billions of dollars are being siphoned away from the poorest districts by the state’s burgeoning education bureaucracy.

Just look at the facts:

  • Illinois’ non-teaching staff has ballooned by 50 percentin the past two decades, while student enrollment has grown just 11 percent.
  • Illinois has more school districts than the nation’s four most efficient, big-population states (Florida, North Carolina, Virginia and Georgia) have, combined. That means thousands of excess administrative and non-teaching staff in Illinois.
  • Pension costs have grown so quickly they’ve devoured nearly 50 percent of the state’s contribution to downstate education in recent years. In 2017 alone, the state spent $11 billion on education for downstate districts – $5 billion of that went to pay for downstate teacher pension costs.

Illinois is spending billions on district offices, administrators and multi-million dollar pensions instead of providing more classroom funding. That isn’t fair to poor districts like Taylorville CUSD 3, which only spends $7,400 per student and is one the plaintiffs in the lawsuit.

Illinois’ high per-student spend shows why the state doesn’t need to hit up Illinoisans for more education money. Instead, the state just needs to redirect the money it already has to the places and students that need it most.

The education establishment knows there isn’t enough money to both preserve their system and fund Illinois’ neediest districts. But officials don’t want to give up the system they benefit from.

So, they mislead Illinoisans into thinking more money is the only solution. The $7.2 billion lawsuit is the most egregious example of that – it’s all about the self-preservation of Illinois’ education bureaucracy.

To continue reading: Administrators over kids: Seven ways Illinois’ education bureaucracy siphons money from classrooms

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Posted in Cronyism, Debt, Education, Government, Pensions

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The Truth About Labor Day, by Gary Galles

Posted on September 5, 2017 | 1 comment

Organized labor probably has hurt more workers than it has helped. From Gary Galles at mises.ca:

Labor Day is supposed to honor all American workers. And every year, union Labor Day rhetoric does just that. Unfortunately, it then makes the false leap to the claim that unions advance the interests of all American working men and women, not just their members. In fact, despite unions’ pro-worker rhetoric, the effect of most union activities and union-backed policies is to harm most American workers.Unions succeed by preventing competition from other workers who are willing to do the same work for less. Those workers either become unemployed or must go elsewhere to find jobs, increasing the supply of labor services in non-union employment, pushing down wages for all workers in such jobs as a result. The resulting union wage premium does not come out of the pockets of employers as much as from the pockets of other workers, as a result. Since less than 10 percent of the American private-sector workers are unionized, this means that more than 90 percent of private-sector workers are injured by this most basic exercise of union power.

Anti-worker effects are also vividly illustrated by the history of union violence and threats against “non-cooperative” employees. There have been thousands of attacks against such workers in recent decades, and well more than 100 deaths.

Aware that their government protection against workers who are willing to do the same job for less stops at the border, unions have also been the primary movers behind government protectionism of all stripes. But protectionism undermines the interests of all those workers who would have gained from expanded exports, as well as those who, as consumers, would have gained from access to lower cost and superior quality imports.

To continue reading: The Truth About Labor Day

 

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Actuarial Establishment Tries to Suppress Explosive Paper on Public Pensions, by Walter Russell Mead

Posted on August 7, 2016 | 2 comments

Apply honest accounting to public pensions and they go from “seriously underfunded to catastrophically underfunded,” which may be why actuaries are backing away from applying honest accounting. From Walter Russell Mead at the-american-interest-com:

America’s slow-motion public pension train-wreck (by some estimates, the shortfall currently exceeds $3 trillion) has been kept in motion for years by deeply dishonest accounting practices employed by state and local governments, which presume unrealistically that pension funds can consistently earn white-hot annual returns approaching eight percent. So it’s disappointing, but not particularly surprising, that the actuarial establishment moved to suppress a report pointing this out. Pensions and Investments reports:

The American Academy of Actuaries and the Society of Actuaries Monday abruptly disbanded its longtime joint Pension Finance Task Force, objecting to a task force paper challenging the standard actuarial practice of valuing public pension plan liabilities.

“This paper (is) being censored by the AAA” and SOA, said Edward Bartholomew, who was a member of the former task force, in an interview. “They didn’t want it to get out.”

Others who were members of the task force also said in interviews the two actuarial groups are trying to suppress publication of the paper.
There are powerful interests that don’t want public pensions to be governed by the same kinds of accounting principles used in the private sector because… well, because if they were, public pensions would go from seriously underfunded to catastrophically underfunded.

Union officials and state legislators (in both parties) seem to believe that it makes more sense to allow public pension funds to play “let’s pretend” with public money. To be sure, the sudden imposition of a tougher standards would cripple business as usual in many state and local governments, so there can and should be some reasonable accommodations made to allow the adjustment to take place in a less disruptive fashion. Governing by catastrophe is almost never a good idea, and a series of small and incremental changes is usually (though not always) a better way to manage public affairs.

In the long run, shifting to a more portable system of public pensions—defined contribution, rather than defined-benefit—wouldn’t just help save states and municipalities from fiscal ruin. It would also do much to improve the performance of the civil service. The current system creates a jobs-for-life mentality in public employment because workers need to stay at their positions for decades to collect the full value of their pensions. Somebody who was a good teacher at 30 but wants to leave and should leave at 40 is currently trapped.

Also, one of the reasons the unions fight quality evaluations so fiercely is that the loss of job and pension is so much more draconian than simply losing a job.

The report from dissident actuaries might have helped push state and local pension systems down a more sustainable path. And the conduct of American actuarial leaders—disbanding a reputable task force that had prepared a report that the bureaucracies didn’t like, and then hinting at legal action if the report is published—is irresponsible at best and corrupt at worst. Is it any wonder that Americans are fed up with experts and the institutions they manage?

http://www.the-american-interest.com/2016/08/04/actuarial-establishment-tries-to-suppress-explosive-paper-on-public-pensions/

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Posted in Government, Pensions

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