Commentary and Criticism about the National Education Association
We have absolutely no affiliation with the National Education Association and do not represent its views in any way, shape or form.
“We [teachers] work second jobs because our salaries alone are not sufficient to pay our bills, let alone save for the future,”
Teacher Krista Degerness Ken Caryl Middle School in Littleton, Colo.
“The CPI no longer measures the true increase required to maintain a constant standard of living. This is the main reason that more people are falling behind financially …”
The Chapwood Index
CONSUMER PRICE INDEX (CPI) – A useless statistic?
Back in January we wrote a post about the inability of teachers to make ends meet. It was an analysis of Robert Rosales’ story at NEA Today called Moonlighting:
“Nationwide, many public school teachers … work nights and weekends to supplement the income they receive from teaching … They are simply trying to keep their financial boats afloat.”
An economist quoted by the NEA (Sylvia Allegretto) offered the following explanation for the pay gap:
“… weakening of teachers’ unions, pervasive anti-government sentiment, defunding of public education and the spread of charter and private schools …”
We offered another possibility – inflation.
Some readers disagreed with our conclusion, pointing out that this couldn’t be the issue. After all, if you look at government statistics, the Consumer Price Index (CPI) has been pretty tame for years:
But is inflation really as low as the CPI suggests?
Here are two reasons why it is suspect:
THE CHAPWOOD INDEX – A more realistic measure of inflation
A better measure of inflation is available in the Chapwood Index.
“The Chapwood Index reflects the true cost-of-living increase in America. Updated and released twice a year, it reports the unadjusted actual cost and price fluctuation of the top 500 items on which Americans spend their after-tax dollars in the 50 largest cities in the nation.”
As you can see from the chart, inflation is much higher than the government is telling you. Click on the website link to see all 50 cities that are tracked.
CONCLUSION – The real culprit is the government
So maybe it is time that the NEA and other teacher’s unions recognize the real reason why their pay just doesn’t seem to keep up with the times.
Maybe it’s time to stop blaming:
“… weakening of teachers’ unions, pervasive anti-government sentiment, defunding of public education and the spread of charter and private schools …”
The real reason for the sad state of teacher salaries can be found by looking at the Chapwood Index which …
“… exposes why middle-class Americans — salaried workers who are given routine pay hikes and retirees who depend on annual increases in their corporate pension and Social Security payments — can’t maintain their standard of living.”
And one last point about prices.
They don’t just increase because of supply and demand or because “greedy corporations” decide they want to fleece their customers to maximize profits.
That may be what you are taught in the public schools but the truth is more complicated than that.
The Federal Reserve, through its monetary polices, creates inflation by printing dollars. The more you make of something, the less each unit is worth.
Below are two charts which highlight this fact. The first shows the increase in the supply of money since 1920.
Compare this with the second chart below which shows the decline in the purchasing power of the dollar.
The charts speak for themselves, but just in case you need a translator, here is what they are saying:
As money supply has increased, the purchasing power of your dollars have declined.
Liberals and progressives always want to turn to the government to help them right the supposed wrongs of society.
Well, in this case, the government, itself, seems to be the problem.
Sorry NEA President Garcia, not all in the “church of educators” say “Amen” to free college tuition.
“Higher education in America should be a right for all, not a privilege for a few.”
Senator Bernie Sanders
LILY GETS SILLY
In her latest blog post, NEA President Lily Eskelsen Garcia wants us all to celebrate “Community College Month” by “ensuring college is a right – not a privilege.”
In other words, she wants it to be free.
Her response to Senator Bernie Sanders’ “College for All Act?”
“… let the church of educators say ‘Amen.’”
Just four months after our last article, do I have to give Garcia another lesson in what the word “free” really means?
The NEA Says Education is Free: Joseph Goebbels would be so proud
The obvious fact of life is that there is no such thing as free anything. “Free” college tuition for you just means that someone else is paying for it. It is either being covered by:
However, we do agree with her one statement:
“… because all of our students, regardless of how much their families earn, deserve the opportunity for a great education.”
But there is a big difference between the opportunity for an education and a free education.
My daughter is in college.
After all of our bills are paid, two teacher salaries (my wife and I are both in the profession) don’t even come close to being able to pay her tuition.
At no point did we expect that someone else was obligated to pay for her education.
So you want to talk free college education?
How about a free car in order to get to class at college?
Free gas for that car? Naturally - how else do you expect that car to be able to move?
And then there are free oil changes, tire rotation, brakes …
And I almost forgot, you will probably need a free computer so that you can do all of that work at school.
Where does it end, full-blown socialism?
Which brings to mind the old proverb:
“The road to hell is paved with good intentions.”
“When people have nothing left to lose, and they’ve lost everything, they lose it.
Gerald Celente, Author of the Trends Journal
THE PENSION CRISIS: Nicaragua or the United States – it’s the same issue
The problems facing the Nicaraguan pension system are similar to those found in many U.S. states today. It all boils down to one of two possible characterizations:
So how bad is it exactly?
Eight years ago the International Monetary Fund (IMF) had this to say:
“The IMF is demanding reform because it has calculated that without it, the State will have to assume huge costs within 10 to 15 years that will destabilize the economy.”
In other words, the system is severely underfunded.
As for the generosity of the benefits, consider that most citizens …
“… are now able to retire at 60 years of age, though teachers may retire after working to age 55.”
NICARAGUA TRIES TO FIX THE PROBLEM
The Nicaraguan government recently made an attempt to reform its troubled social security system by implementing the following three rule changes:
CITIZENS PROTEST – VICTORY IS WON?
The citizens were having none of this - they took to the streets in violent protest (Molotov cocktails, stone-throwing, etc.).
After 25 people were killed, President Daniel Ortega …
“… decided to cancel planned changes to the Central American country's pension system that have triggered violent protests.”
Victory for the workers!
Ortega scrapped his plans to cut benefits saying …
“… that the government would examine other ways to reform the pension system and improve its financial outlook.”
FORGET PENSION REFORM, WE’LL JUST PRINT MONEY
But what “other ways” are there?
Consider recent Nicaraguan monetary history for some clues as to how the financial outlook of the pension system might be “improved.”
“The Central Bank of Nicaragua, established in 1961, has the sole right of issue of the national currency, the córdoba. “
Let me translate the underlined/bolded section of the above quote:
The bank can print up as much money as it wants to pay its pension bills – after all, it has the “sole right of issue of the national currency.”
So, problem solved, it seems.
Nicaragua doesn’t have to reform its pension system. If it needs money to pay retirees, all it has to do is issue more cash whenever it wants.
BACK TO REALITY
Of course, the more money printed, the less each unit is worth.
Take a look at the following chart of the exchange rate of the U.S. dollar and the Nicaraguan cordoba since 1998:
As of April 23, 2018 you needed 31.12 cordoba to buy 1 dollar. Back in September of 1994 you only needed 6.73.
That is what happens when you just print money out of nothing and issue it – its value declines.
By the way, another name for this is inflation.
The decline was even worse if you go back to 1991:
“Inflation has seriously eroded the value of the nation's money, the córdoba. In 1991, inflation reached 750 percent which made the currency relatively worthless since what had previously cost 1 córdoba cost 750 córdobas.”
CONCLUSION – There’s that predicament again …
The poor condition of many U.S. state pension funds is widely acknowledged.
But, unlike Nicaragua, they can’t print money to “solve” the problem. Instead, states have only three basic choices:
Like a broken record, here we go again - the pension crisis is not a problem, it’s a predicament.
Quoting Chris Martensen of Peak Prosperity:
“A problem can be solved to avoid a certain outcome. A predicament has no solution, only an outcome.”
“…corrupt politicos promised the moon to public employees, and now the fiscal chickens of insolvency are coming home to roost. Public pension obligations are rising so fast that even repeated tax increases can't keep up.”
Charles Hugh Smith, Of Two Minds Blog
We haven’t written about the sorry state of teacher pensions in a while, but when we read Smith’s Blog yesterday, we were inspired once again.
We have been warning teachers at every opportunity not to rely on their expected retirement pensions. Our recommendation has always been for them to save as much money as possible outside of the system, so that they will actually be able to retire and live a lifestyle similar to what they enjoy now.
TYPICAL TEACHER RESPONSE
But almost without fail, every time we post an article dealing with pensions, we get blow-back from teachers claiming something along the lines of …
“You are wrong - the state contractually owes us this money. How can you just give up and accept this? Our unions will not compromise – they will fight for our benefits to the bitter end.”
Well the bitter end is fast approaching because the “Tax Donkeys” who pay our pensions are not going to accept it for much longer.
Of course, the typical teacher response is:
“But we pay into our pensions. It is our money. The taxpayers have nothing to do with it.”
Unfortunately, this is not true. Leaving aside the contribution that the state makes to the pension program, if the money we contribute is invested and doesn’t increase in value to a proper level, there is no way that it will cover our monthly benefit in retirement.
And if it doesn’t, then the taxpayers have to make up for the deficit. As Smith makes clear:
“… pensions can't be paid with borrowed money like Social Security and Medicare; public pension obligations come out of local and state taxes, and as those obligations soar then public services must be slashed and taxes jacked up by annual double-digit increases.”
ABOUT THOSE “TAX DONKEYS”
The way we see it, the term “Tax Donkeys” has two connotations.
First, it refers to taxpayers who are forced to bear the costs of government programs – donkeys are beasts of burden, after all.
But more importantly, it also refers to taxpayer mobility.
“… in the war between public pensioners and the Tax Donkeys, the pensioners can't switch pension programs, but the Tax Donkeys can move to lower-tax states.”
Smith suggests that there will be a
“… Great Migration of the Tax Donkeys from failing cities, counties and states to more frugal, well-managed and small business-friendly locales.”
PREDICAMENT VS. PROBLEM - It is what it is ...
In past blog posts we used the word predicament (rather than problem) to describe the current pension situation. It is important to understand the difference.
Problems have solutions but predicaments don’t – they only have outcomes.
Solutions make people happy: “Yea, we solved the problem!”
Outcomes, not so much: “That really sucks – but it is what it is.”
We can’t predict the specific outcome that will unfold for teachers, but none of the possibilities we envision will be pleasant. Teachers will have to:
Yes, they all really suck ... but it is what it is.
Did you procrastinate this year, waiting until the last minute to file your taxes?
If so, in your rush to meet the deadline this past Tuesday, you may have overlooked the “cultural tax.”
But don’t fret - unless you are a person “of color,” you probably weren’t required to pay it anyway.
ONLY DO THE CONTRACTUAL MINIMUM – Anything else is a “tax”
Never heard of “cultural taxation?”
Until this morning, neither did I.
As frequent readers of our blog are aware, I review the NEA Today website on a regular basis. Well, this morning, I came across that term.
In her article “Bargaining for the Common Good in Higher Education,” Mary Ellen Flannery defines it as:
“… the penalty paid by many faculty of color for the disproportionate work they do to support students of color.”
Only in the field of education could “disproportionate work” be an issue.
Teachers work under contracts negotiated by their unions which specify exactly what they are required to do. Doing more than legally required is frowned upon. In fact, if you do put in any extra time/effort, the local union president and his representatives will likely pay you a visit and tell you that your actions are in violation of the contract.
Shame on you for putting in extra time preparing lessons and helping students!
Silly teachers, don’t you know that any work you do above the contractual minimum is equivalent to a tax because you are not being compensated for the extra effort?
Of course, in the “real” world, doing extra work and not getting paid is pretty much par for the course - its how you advance in your career.
THE BURDEN OF CULTURAL TAXATION FOR PEOPLE “OF COLOR”
Further research into this topic led me to a video produced by Ithaca College:
Get It Together: Cultural Taxation
Here is how the host of the interview, Alexzandria Sanchez, describes the problem:
“Cultural taxation … is a unique burden placed on ethnic minority faculty ... that has to do with the responsibility that they take on that they are not recognized for so to me that means that it’s a struggle for justice and recognition and equality even.”
How “unique” is that burden?
According to Cecil Canton, Associate VP of Affirmative Action at the California Faculty Association
“[While] every tenure-track faculty member … is responsible for teaching courses, building a record of scholarship, and providing service to the institution to meet the standards of the retention, promotion and tenure process … these processes take on increased and amplified weight for underrepresented faculty and faculty of color in predominantly white institutions …”
CONCLUSION – Stop playing the victim
When I worked in the business world, I was paid an annual salary. I could have showed up at 9 and left at 5 every day had I wanted to. In fact, there were many at the firm who did just this.
But fresh out of college with no real work experience, I wanted to prove myself. I wanted to show my employer that I was worth something to the company. I made sure to go into work at 7:30 AM and didn’t leave until 6:30 PM every day.
I certainly didn’t complain about the extra work I did with no compensation.
In fact, I didn’t consider this extra work “taxation” because the experience I gained improved my prospects at the company. The more time I put in, the more I was recognized by my boss and the faster my career advanced.
Contrast my attitude with Cecil Canton’s. This is exactly the wrong way to approach the situation:
“Cultural taxation is a stealth workload escalator for faculty of color. And like stress, it can be a silent killer of professional careers and aspirations.”
Here is some advice to all of the people “of color” who think that “cultural taxation” is killing their careers:
Stop playing the victim in all of this. Your employer doesn’t owe you anything but to pay you your agreed salary. If you think that he is working you too hard and isn’t compensating you for what you know you are worth, quit and find an employer who does value what you have to offer.
Instead of complaining about the sorry state you find yourself in, take control of your career.
Most importantly, stop blaming others.
The only one holding you back is you.