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Original MessageSubject: Wall Street Journal ArticleOh, To Be a Teacher in Wisconsin
How can fringe benefits cost nearly as much as a worker’s salary? Answer: collective bargaining..Article Comments (629) more in Opinion The showdown in Wisconsin over fringe benefits for public employees boils down to one number: 74.2. That’s how many cents the public pays Milwaukee public-school teachers and other employees for retirement and health benefits for every dollar they receive in salary. The corresponding rate for employees of private firms is 24.3 cents.
Gov. Scott Walker’s proposal would bring public-employee benefits closer in line with those of workers in the private sector. And to prevent benefits from reaching sky-high levels in the future, he wants to restrict collective-bargaining rights.
The average Milwaukee public-school teacher salary is $56,500, but with benefits the total package is $100,005, according to the manager of financial planning for Milwaukee public schools. When I showed these figures to a friend, she asked me a simple question: “How can fringe benefits be nearly as much as salary?” The answers can be found by unpacking the numbers in the district’s budget for this fiscal year:
•Social Security and Medicare. The employer cost is 7.65% of wages, the same as in the private sector.
.•State Pension. Teachers belong to the Wisconsin state pension plan. That plan requires a 6.8% employer contribution and 6.2% from the employee. However, according to the collective-bargaining agreement in place since 1996, the district pays the employees’ share as well, for a total of 13%.
•Teachers’ Supplemental Pension. In addition to the state pension, Milwaukee public-school teachers receive an additional pension under a 1982 collective-bargaining agreement. The district contributes an additional 4.2% of teacher salaries to cover this second pension. Teachers contribute nothing.
•Classified Pension. Most other school employees belong to the city’s pension system instead of the state plan. The city plan is less expensive but here, too, according to the collective-bargaining agreement, the district pays the employees’ 5.5% share.
Overall, for teachers and other employees, the district’s contributions for pensions and Social Security total 22.6 cents for each dollar of salary. The corresponding figure for private industry is 13.4 cents. The divergence is greater yet for health insurance:
•Health care for current employees. Under the current collective- bargaining agreements, the school district pays the entire premium for medical and vision benefits, and over half the cost of dental coverage. These plans are extremely expensive.
This is partly because of Wisconsin’s unique arrangement under which the teachers union is the sponsor of the group health-insurance plans. Not surprisingly, benefits are generous. The district’s contributions for health insurance of active employees total 38.8% of wages. For private-sector workers nationwide, the average is 10.7%..•Health insurance for retirees. This benefit is rarely offered any more in private companies, and it can be quite costly. This is especially the case for teachers in many states, because the eligibility rules of their pension plans often induce them to retire in their 50s, and Medicare does not kick in until age 65. Milwaukee’s plan covers the entire premium in effect at retirement, and retirees cover only the growth in premiums after they retire.
As is commonly the case, the school district’s retiree health plan has not been prefunded. It has been pay-as-you-go. This has been a disaster waiting to happen, as retirees grow in number and live longer, and active employment shrinks in districts such as Milwaukee.
For fiscal year 2011, retiree enrollment in the district health plan is 36.4% of the total. In addition to the costs of these retirees’ benefits, Milwaukee is, to its credit, belatedly starting to prefund the benefits of future school retirees. In all, retiree health-insurance contributions are estimated at 12.1% of salaries (of which 1.5% is prefunded).
Overall, the school district’s contributions to health insurance for employees and retirees total about 50.9 cents on top of every dollar paid in wages. Together with pension and Social Security contributions, plus a few small items, one can see how the total cost of fringe benefits reaches 74.2%.
What these numbers ultimately prove is the excessive power of collective bargaining. The teachers’ main pension plan is set by the state legislature, but under the pressure of local bargaining, the employees’ contribution is often pushed onto the taxpayers. In addition, collective bargaining led the Milwaukee public school district to add a supplemental pension plan—again with no employee contribution. Finally, the employees’ contribution (or lack thereof) to the cost of health insurance is also collectively bargained.
As the costs of pensions and insurance escalate, the governor’s proposal to restrict collective bargaining to salaries—not benefits—seems entirely reasonable.
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I find the mentality in this country disappointing to say the least. I don’t belong to a union. Just because I don’t belong to a union doesn’t mean I want to see those who do lose that. Unions have helped to raise wages in this country rather than lower them. I am amazed at people who because they may not enjoy the benefits that another group of people enjoy want to being them down to the lower levels that they have. Instead, why don’t workers get together and try and brings everyone’s up.
GTOMan,
I’m like you. I’ve never belonged personally. But I’m of the opinion that unions have, overall, benefitted member workers and society in general more than they have hurt them. Union members often enjoyed better conditions, pay, and benefits. Their communities benefitted because those workers had more money to spend. Just my opinion here.
Mick,
On one hand, those figures sound shocking. To many of us, they’re too dam high. But there are sometimes different perspectives.
The article questions how benefits could cost as much as a worker’s salary. Well, assuming it did not start out like that, there’s two ways: either the benefit package grew to equal the salary, or else the salary dropped to equal the benefits. In the case of teachers, it was some of both. Teachers previously sacrificed their salary increase in exchange for a increase in their benefit package, at the request of the state. Did they get too much of a good thing? Well, maybe. Because they’ve already indicated a willingness to make concessions. Few people are arguing that some fiscal adjustments are necessary and fair.
Milwaukee teachers likely enjoy a relatively high salary, compared to your average Wisconsin teacher. It’s a big city. How does that compare with a teacher living in, say, Potosi or Cassville? Just like the cost of land, food, and housing, everything costs more in a large city, including what a teacher needs to live. And few people would dispute that many times the work of an inner-city teacher can be more challenging than that in a small rural community.
The article gives the average Milwaukee teacher’s salary. How does that compare with the average Wisconsin teacher’s salary? I don’t know any teachers that make 56K/yr. plus benefits, but I don’t live in Milwaukee. That’s about $28/hr., assuming they work a 2,000 hour/year job. Of course, they’ve got summers off, but every teacher I know works more than 8 hrs./day during the rest of the month.
So assume it costs twice that much including benefits. That comes to around $56/hr., for someone we charge with instilling knowledge and wisdom in our children. They’ve gone to college, in most cases, to prepare for the job. We want them to be motivated, and give a $hit. When I’m paying mechanics $100/hr., and lawyers and doctors $100-$300 per hour (and sometimes more), then that $56/hr. begins to sound like a bargain.
IF teachers have all gotten such a grand deal, it’s even more evidence that their union has been successful for them. Rather than get rid of unions, perhaps more non-union workers would profit if they had their own union.
If it’s time to reexamine the role/s of unions in this country, let’s do it. But don’t force the unions out of existence, in the name of passing an operating budget. How any workers in this state can support the governor’s budget bill is beyond me.
Say what you want, I’m on the goverment teat. My spouse was forced into early retirement this past April. We receive “free” health insurance till Medicare kicks in if ever and also receive a monthly pension check. I’m in the middle, as I too spent 15+ years with both the Carpenters union and the Teamsters Local 200. I will get pension from both of those when I retire. The trouble I see is the noncontributing factor. Even now where I work I have an employer match typical % retirement plan. We BOTH contribute. I don’t take the health insurance where I work as we already have a plan and it’s FREE. I’m concerned as are many that the gap is widening with the wage/benies on the state level. Other professionals don’t have benies that make their footprint DOUBLE. $58 an hour for what sometimes is nothing more than a babysitting service. Pay ’em more, why? Are you going to get better results? I doubt it. Why not pay everyone on performance? That’s the way I get paid. And really 2000 hours in 9 months, with holidays, and teacher conventions. I think you need to check into that. And after all if only one point of view was taken, what kind of democracy would that be? The was the real reason for my posting the article, too enlighten those that only read from a left leaning media. We all have the right to believe in what we want this is America at least the last time I checked.
mick289 wrote:
Quote:
Original MessageSubject: Wall Street Journal ArticleOh, To Be a Teacher in Wisconsin
How can fringe benefits cost nearly as much as a worker’s salary? Answer: collective bargaining..Article Comments (629) more in Opinion The showdown in Wisconsin over fringe benefits for public employees boils down to one number: 74.2. That’s how many cents the public pays Milwaukee public-school teachers and other employees for retirement and health benefits for every dollar they receive in salary. The corresponding rate for employees of private firms is 24.3 cents.
Gov. Scott Walker’s proposal would bring public-employee benefits closer in line with those of workers in the private sector. And to prevent benefits from reaching sky-high levels in the future, he wants to restrict collective-bargaining rights.
The average Milwaukee public-school teacher salary is $56,500, but with benefits the total package is $100,005, according to the manager of financial planning for Milwaukee public schools. When I showed these figures to a friend, she asked me a simple question: “How can fringe benefits be nearly as much as salary?” The answers can be found by unpacking the numbers in the district’s budget for this fiscal year:
•Social Security and Medicare. The employer cost is 7.65% of wages, the same as in the private sector.
.•State Pension. Teachers belong to the Wisconsin state pension plan. That plan requires a 6.8% employer contribution and 6.2% from the employee. However, according to the collective-bargaining agreement in place since 1996, the district pays the employees’ share as well, for a total of 13%.
•Teachers’ Supplemental Pension. In addition to the state pension, Milwaukee public-school teachers receive an additional pension under a 1982 collective-bargaining agreement. The district contributes an additional 4.2% of teacher salaries to cover this second pension. Teachers contribute nothing.
•Classified Pension. Most other school employees belong to the city’s pension system instead of the state plan. The city plan is less expensive but here, too, according to the collective-bargaining agreement, the district pays the employees’ 5.5% share.
Overall, for teachers and other employees, the district’s contributions for pensions and Social Security total 22.6 cents for each dollar of salary. The corresponding figure for private industry is 13.4 cents. The divergence is greater yet for health insurance:
•Health care for current employees. Under the current collective- bargaining agreements, the school district pays the entire premium for medical and vision benefits, and over half the cost of dental coverage. These plans are extremely expensive.
This is partly because of Wisconsin’s unique arrangement under which the teachers union is the sponsor of the group health-insurance plans. Not surprisingly, benefits are generous. The district’s contributions for health insurance of active employees total 38.8% of wages. For private-sector workers nationwide, the average is 10.7%..•Health insurance for retirees. This benefit is rarely offered any more in private companies, and it can be quite costly. This is especially the case for teachers in many states, because the eligibility rules of their pension plans often induce them to retire in their 50s, and Medicare does not kick in until age 65. Milwaukee’s plan covers the entire premium in effect at retirement, and retirees cover only the growth in premiums after they retire.
As is commonly the case, the school district’s retiree health plan has not been prefunded. It has been pay-as-you-go. This has been a disaster waiting to happen, as retirees grow in number and live longer, and active employment shrinks in districts such as Milwaukee.
For fiscal year 2011, retiree enrollment in the district health plan is 36.4% of the total. In addition to the costs of these retirees’ benefits, Milwaukee is, to its credit, belatedly starting to prefund the benefits of future school retirees. In all, retiree health-insurance contributions are estimated at 12.1% of salaries (of which 1.5% is prefunded).
Overall, the school district’s contributions to health insurance for employees and retirees total about 50.9 cents on top of every dollar paid in wages. Together with pension and Social Security contributions, plus a few small items, one can see how the total cost of fringe benefits reaches 74.2%.
What these numbers ultimately prove is the excessive power of collective bargaining. The teachers’ main pension plan is set by the state legislature, but under the pressure of local bargaining, the employees’ contribution is often pushed onto the taxpayers. In addition, collective bargaining led the Milwaukee public school district to add a supplemental pension plan—again with no employee contribution. Finally, the employees’ contribution (or lack thereof) to the cost of health insurance is also collectively bargained.
As the costs of pensions and insurance escalate, the governor’s proposal to restrict collective bargaining to salaries—not benefits—seems entirely reasonable.Wow, right from the RepubliCAN’T handbook…If Walker give’s us the pay increases we have given up the last ten years that would also bring us closer to the private sector wages. Then we can afford to pay for the benefits. we took those pay cuts so we could save our benefits. Any state employees remember the last time you got a cost of living increase? Me neither!
At least you will be able to retire….
retire, and move to a state where the property taxes are attentable without robbing a bank. Unless there is a big change it what it costs “just” to own a home, count me out in this state. It is way to costly on a fixed income to pay for heat utilities, taxes and groceries.
I worked for BF Goodrich Tire Co. and was in the United Rubber Workers Union. Unions are not perfect organizations. They have a lot of internal struggles and politics also. What I liked about the union was that it backed me against unscrupulous managers. There are people in management who do not always respect the people who work for them and the union was there to help workers stand up to them without loosing their jobs. It is not always money and benefits that drive the train. I know people who do not make a lot of money or have the best benefits but are happy with their jobs because they work for good owners and bosses. When I was growing up, people who became teachers did it because they wanted to. There wasn’t a lot of money and benefits for them but a lot of pride and dedication in what they did. People used to invite teachers to their homes for supper and businesses gave them good deals to help them because they knew that they needed it.
What I didn’t like about the unions was that they spent a lot of time and money defending people who should have been fired. Also everybody got paid the same wage whether they good workers or not. Our wages and benefits were ok, but some non-union companies in the same area did better. There was no say on how our union dues were spent. Collective bargaining locked us into a 3 year contract that sometimes didn’t get us what we deserved. In a good economy we saw non-union shops getting bigger annual raises because the company did good while we were locked into a specific amount for 3 years.
The teachers might be better off with union protection and no collective bargaining. I think they would do better with referendums, that way we the taxpayers will be in the drivers seat as with other decisions. I feel the people will treat then fairly and not vote against the kids.
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