We have heard in state after state that teachers’ pensions and wages must be curtailed because they–and other public workers–are destroying the economy. Those greedy, selfish teachers and principals!
However.
The Economic Policy Institute in DC reports that in 2012 the average CEO made 273 times the wages of the average worker.
Now it is very important to understand the concept of shared sacrifice. Your typical CEO might have insisted on wages 500 times that of the workers, but they graciously consented to a ratio of only 273:1.
Here are a few key findings:
“Average CEO compensation was $14.1 million in 2012, using a measure of CEO pay that covers CEOs of the top 350 firms and includes the value of stock options exercised in a given year (“options realized”), up 12.7 percent since 2011 and 37.4 percent since 2009. This is our preferred measure.”
Also:
“From 1978 to 2012, CEO compensation measured with options realized increased about 875 percent, a rise more than double stock market growth and substantially greater than the painfully slow 5.4 percent growth in a typical worker’s compensation over the same period.
“Using the same measure of options-realized CEO pay, the CEO-to-worker compensation ratio was 20.1-to-1 in 1965 and 29.0-to-1 in 1978, grew to 122.6-to-1 in 1995, peaked at 383.4-to-1 in 2000, and was 272.9-to-1 in 2012, far higher than it was in the 1960s, 1970s, 1980s, or 1990s.”
Think how busy they must be outsourcing jobs to low-wage nations. Tough job, but someone has to do it.
Diane Ravitch's blog 
But the CEOs deserve it. By definition they are the “best of the best” and the “free market” (ain’t so free when one has to pay that kind of jack for a position the janitor could do) has determined their worth.
What percentage in taxes of this income does the CEO pay. Probably a whole lot less than what a teacher pays on his/her income.
The new “lords of the manor” as it were.
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Considering the top increase for CEOs was in 2000, when the neo-liberal promoter of the North American Free Trade Agreement, Glass-Steagall reversing Bill Clinton was president, easing the way for the outsourcing of jobs to slave labor in foreign countries and supporting the growth of American companies that are “too big to fail”, you have to conclude that for some time now, politicians on BOTH sides of the aisle have been on the side of big business and against working class people.
It’s long past the time when American voters should be dumping corporate owned neo-liberal politicians in both parties!
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Democrats pushing Hillary to run for president next term need to remember Bill’s legacy and consider someone else who has NOT been intimately tied to free-trade corporation loving greedy neo-liberals, like Elizabeth Warren.
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Exactly, Veteran Educator. Hilary, as admirable as she is and her accomplishments are, has been in the NeoLib clubhouse for too long to be trusted to lead educators and this country in a fair and equitable direction.
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Questions about Hilary? She was on the board of Walmart.
This should clarify who she is and what she stands for.
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I do find this photo amusing.
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Teachers & public service workers are the Willie Hortons of the 21st century.
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I know I am naive about business and money–I was raised in an old fashioned southern home where my father controlled that area and I have rather acquiesced to having a husband who does the same (it is not a problem for our family). But my question is this: why do these high payed folks not come into contact with folks who are not paid like they are? Could not a human face make a conscience come about?
A friend if ours who is the business manager for a radiology office told us that in a business meeting one day the doctors griped that they were not making $650,000 anymore, but rather more like $540,000 and wanted to know what they could take away from their workers to get back to that. The business manager looked them in the eye and said that if they wanted a change like that, they would need to go tell their $10 an hour employees this news themselves. That made them flinch and they let it go and settled on $540 k instead of $650 k.
There is apparently not a mirror for some folks to make them see their own greed in consideration of others or within a system where others are taken for granted.
I do not know what that magic mirror would be, but I am certain that every human at some point must confront their own lack of consideration for others (it is something our family tries to teach our children every day).
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Answer to first question: No need to soil oneself with the riff-raff.
Answer to second question: NO!
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They probably called a meeting the next day to discuss how much it would cost to hire a new business manager who’s willing to tell the workers that their new wage is $9.50 per hour (because of Obamacare).
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Thank you for brining up this very raw and controversial topic: teachers and their “evil” wages/pensions. First off, the much respected business journalist, David Cay Johnston, argues that teachers pay 100% for their pensions and other benefits under the concept of deferred compensation. Teachers do pay into their pension funds and here in NJ, teachers have paid billions into their pension fund over the past couple of decades. It’s not a gift unless you regard the salary for teachers to be some kind of gift and not earned and deserved compensation. Chris Christie has ginned up the class warfare between private sector workers who have been stripped of their benefits and pensions and whose wages have remained stagnant for a long time and the much maligned public sector workers. Chris Christie never passes up an opportunity to propagandize against teacher pensions and the “too rich and too generous” teacher benefits. You would think that teachers, their wages and their pensions caused the great recession of 2008. Oh yeah, those greedy rich elite pedagogues with their Bentleys, summer homes in Monte Carlo and bank accounts in the Cayman Islands. The actual banksters and Wall Street manipulators are the ones who caused the great recession not teachers who are struggling to survive.
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“First off, the much respected business journalist, David Cay Johnston, argues that teachers pay 100% for their pensions and other benefits under the concept of deferred compensation.”
The problem with this argument is that if you call it deferred compensation — which is correct, that’s what it is — then suddenly large numbers of teachers don’t look so under-compensated anymore.
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Except that in many places that deferred compensation is under attack without significant COLA.
In New York which is the only place I can speak to, they reinstated 2 new pension tiers in the last few years after not having a new one since the 80s..and each one progressively attacked the amount employees collected such that first teachers that are hired now pay for their pension for life, but, the amount also scales up as they make more money in % (so the more you make the more is taken out and not as a fixed %).
Secondly, teachers are being attacked for their medical care as well. As Mayor Bloomberg recently stated, he’d give teachers a raise – if we paid more into our health benefits which we know are certainly going to increase in price way faster than our paycheck will – then teachers effectively receive a decrease – not an increase except maybe in the immediate short term.
In our last contract, we actually bargained more money for more time – not a straight up raise.
They are attacking our paychecks while simultaneously attacking our pensions in a time of rising costs, accountability, uncertainty, and de-professionalization of teaching. This is the wrong route to go if you want to make teaching attractive – so there is no problem in saying pensions are deferred compensation – they’ve both been under attack for a decade or more.
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The “attack” on pensions in NYC is a screw-the-newbie scheme, just like all the social security reform proposals. New hires get less and the vets get theirs. Teachers got big, big retroactive pension enhancements in 2000 and again in 2008. I recall the 2000 enhancement now carries an annual price tag of almost a billion dollars. And the 2008 deal, offering retirement with full benefits at age 55, was in exchange for — oh yes — merit pay based on test scores. Thanks, Bloomberg! Thanks, UFT!
Re: “if we paid more into our health benefits” — what do you pay now?
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I personally do pay some for my health benefits though I recognize the free GHI/HIP plans.
Point being not a “gotcha” point over an improperly placed “more” as for some they would now need to pay in period – if you focus on that, you miss the point that changing that system now will then eat into teachers salaries.
The other point being that those incentives should not have been offered much less accepted – but also implies that you agree that pensions were damaged in the last few rounds of negotiations.
If you agree to that, and can agree that paying into healthcare where we haven’t had to before will decrease the amount a teacher takes home, then, I don’t see how you can reasonably argue that a form of deferred compensation automatically leads to the conclusion that teachers are underpaid in the face of inflation, health costs, and attacks on pensions unless you make the argument that teachers are grossly overpaid to begin with.
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I’m not following your statement that I “agree that pensions were damaged in the last few rounds of negotiations.” Unless you’re referring to the recent tiers for new hires.
I certainly agree that paying for a portion of health insurance — or, for those who already pay, paying a larger portion — reduces take-home pay, although it might not reduce “compensation” if (1) you construe benefits as a form of compensation and (2) the cost of health insurance increases more than the additional amount an employee would be contributing toward it. When health insurance costs rise each year (and they’re projected to become an even bigger budget drag than pensions, and not because pension costs are falling), do you consider that an increase in “compensation”?
On your last point, I’m not arguing that a form of deferred compensation automatically leads to the conclusion that teachers are overpaid (I assume you meant to write overpaid, not underpaid.) I’m saying that if you include non-salary compensation, it is more difficult to argue that teachers are under-compensated. Not saying it’s impossible to argue that teachers are under-compensated, just more difficult. I don’t think that’s very controversial.
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We have of course seen this kind of scapegoating before.
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As I argue with those that confront me on this, I am sorry you have a raw deal, is there something I can do to help you? Perhaps if you had better collective bargaining you could pay into a pension plan as magnificent as our governor’s, then as a teacher I could be jealous of you. Would destroying my pension and leaving me destitute in a few years when I retire really help you?
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http://www.thedailyshow.com/watch/mon-february-28-2011/crisis-in-dairyland—message-for-teachers
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this was HILARIOUS!!!
” disassemble and reassemble them over there”. I wouldn’t put it past Gates with his “technology and business will solve the worlds problems mantra” to actually suggest this.
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This is just part of the story. The jobs report released on Friday indicates that only 47% of American adults have full time jobs right now: http://www.thedailybell.com/29358/Anthony-Wile-The-Danger-Beyond-Employment-Numbers
I know this hardship only too well, because I’ve been looking for a full time job for FIVE YEARS, to no avail.
Meanwhile, I am in my 60s and I’ve developed health problems, further limiting my options, and have been forced to find part time positions with no benefits, so I can work from home. I have no pension and plan to be working until I die, since I have always worked in non-union education jobs for low pay, have no equity or savings and I will never able to afford to retire.
I have struggled to make ends meet and, due to the requirements of Obama Care, my employers cut back on the hours of all part time employees. This occurred just when my rent increased by $400 per month –and I had no money to move to a cheaper apartment.
So, I have been looking for another part time job, just to help me survive, but I can’t even find that! I am a veteran career educator, with three college degrees and decades of experience, who is a quick learner and am available to do all kinds of work online. I am rather desperate, so if anyone is in need of an online worker or knows of a legitimate work from home job, could you please contact me, ASAP?
Thank you–
Other Spaces
other_spaces@yahoo.com
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This is just part of the story. The jobs report released on Friday indicates that only 47% of American adults have full time jobs right now.
I know this hardship only too well, because I’ve been looking for a full time job for FIVE YEARS, to no avail.
Meanwhile, I am in my 60s and I’ve developed health problems, further limiting my options, and have been forced to find part time positions with no benefits, so I can work from home. I have no pension and plan to be working until I die, since I have always worked in non-union education jobs for low pay, have no equity or savings and I will never able to afford to retire.
I have struggled to make ends meet and, due to the requirements of Obama Care, my employers cut back on the hours of all part time employees. This occurred just when my rent increased by $400 per month –and I had no money to move to a cheaper apartment.
I’m single and have never had any other source of income but my own wages, so I have been looking for another part time job, just to help me survive, but I can’t even find that!
Can you please help? I am a veteran career educator, with three college degrees and decades of experience, who is a quick learner and am available to do all kinds of work online. I am rather desperate, so if anyone is in need of an online worker or knows of a legitimate work-from-home job, could you please contact me, ASAP?
Thank you–
Other Spaces
other_spaces@yahoo.com
(Sorry if this is a duplicate but my first post didn’t go through so I revised it and am trying again.)
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I’m so sorry for you. This is why Social Security should be not just saved, but strengthened and expanded.
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In addition, this is why we need Medicare, not Ryan’s crappy voucherized Medicare, and this is why the retirement age must NOT be raised. My neighbor, who could not afford health insurance for the past few years recently turned 65 and is very thankful for Medicare. Now she can get the care that she does need. She was just lucky that she did not incur a major illness before age 65; she could have gone totally bankrupt and destitute or she could have become disabled or worse yet she could have died from lack of health insurance, the plight of millions of Americans. Sadly, this country is dominated by wealthy elites who hate paying taxes that help the great mass of people through such essential programs as Social Security, Medicare and Medicaid. We should have Medicare for all or single payer but we all know that makes too much sense.
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I agree about Social Security, but that’s not where our country is headed. I don’t receive it yet, but I hope to next year, even though, due to the perpetually low wages throughout my career, it will only be enough pay about half my rent. And don’t even get me started on the chained CPI…
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Since you duplicated your post, I’ll duplicate my response. I wish I could help in some way. Hopefully someone here can. It is my impression that America is a place where most working people over the age of 40 live with a growing sense of terror about what will happen when they get fired for the last time. It’s awful.
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Thank you, Flerp. Yes, it really is awful.
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Government policies enabled outsourcing. US consumer demand validated it, plain and simple. Jobs follow purchases. If a business has NO demand, it’s gone,
Jobs are an outgrowth of sales, which are a function of aggregate demand.
What you buy and from whom, IS related to funding (taxes collected).
CEO compensation is at the expense of the GP (general public) buying power. TAXES of the GP, are at the expense of their buying power.
The GP has always footed the entire bill, as business overhead is folded into the
product/service price.
Define a sustainable balance between private sector and public sector.
Has the private sector failed to earn and deserve compensation?
No scapegoating or class warfare here. Is the public sector immune to the power of
CAPITAL?
(private sector workers who have been stripped of their benefits and pensions and whose wages have remained stagnant for a long time )
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What about the concept of the rich and the corporations paying their fair share in taxes or, in the case of too many corporations, paying any corporate income taxes at all? Some giant corporations have not paid any income taxes for years on end and yet still manage to get gigantic tax refunds. It’s all legal. The rich are getting filthy rich because they have kept wages low and/or stagnant, they have reduced a huge chunk of the work force to part time workers so they don’t have to pay workers any benefits. Or they turn workers, ordinary workers into “independent contractors” so they don’t have to pay any benefits and do not have to make any contributions to Social Security or Medicare. It’s a win win for the corporations and a lose lose for the workers. If people are all jiggy with this kind of set up and think that it’s just a cost of business that millions of Americans have to be reduced to fearful, trembling buckets of jello because they have inadequate income, no benefits, no pension, no vacation, no sick leave and no job security, then where is the bottom to this pit? Indentured servitude or full blown slavery? Any time someone even whispers the words minimum wage, living wage or paid sick live, the howling, the wailing, the stamping of feet from the business community (CNBC, Larry Kudlow, all the chambers of commerce across the nation, all the right wing think tanks, libertarians, right wing nuts, etc.) is loud, ear drum bursting and non stop.
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One problem is that huge numbers of non-filthy rich workers are deeply invested in this system. Corporations exist to maximize profits, and shareholders demand it. And shareholders don’t just demand profits, they that profits grow continuously, forever. And they don’t just demand that profits grow continuously, they demand that profits grow higher than everyone currently expects them to grow. If profits don’t do that, stocks don’t rise. If stocks don’t rise, everybody’s 401K or pension fund will implode. And if stocks don’t rise enough, the same thing happens, just not quite as quickly.
Most pension funds use accounting that relies on annual growth of 7.5% or 8%. If the managers of those funds decide that the securities they hold are hurting their chances of meeting that target, and that some securities they don’t hold would help them meet that target, they’ll sell the one and buy the other. That’s market discipline, and it’s constantly reinforcing the message that profits must be higher, no matter how high profits are right now.
So it is a pickle.
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Flerp, would you say corporations are to the right what unions are to the left? Or is that too black and white?
Furthermore, would you say that corporations are always coming from a position of wealth as opposed to unions always coming from a place of no wealth? (If you don’t mind me asking. NC does not have unions and while I did teach in Missouri for a while, I was young and really did not pay attention. I have had very little formal education in economics).
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“Flerp, would you say corporations are to the right what unions are to the left? Or is that too black and white?”
I would reject the terms and rephrase to say that in the private sector, corporations are to the ownership class what unions are to the working class, with “ownership” and “working” defined literally, with membership in those groups determined by the answer to the question, do you work for a living or do you own for a living? (With public employee unions, it’s more complicated than that, since the relationship between workers and corporations is triangulated and more complex and variable.) Of course I’m not an economist and I’m making these terms up. I’m sure the Marxist economists have come up with more a precise formulation. I recall thinking that the Marxists do the best job at describing capitalism, although I haven’t read that stuff in 20 years. We do have at least one economist (although a mere “teaching economist” — zing! just kidding — and likely not Marxist) who posts here regularly. Maybe he’ll weigh in.
“Furthermore, would you say that corporations are always coming from a position of wealth as opposed to unions always coming from a place of no wealth?”
Certainly not always. Some local unions have very little money, and some corporations are going out of business. Some national unions have a lot of money, and some corporations have a mindblowing amount of money. I would think that Apple alone has more cash and cash equivalents on its balance sheet than every single public employee and private employee union added together. But Apple doesn’t spend more than all the unions spend on the issues unions care about. And money isn’t everything in politics.
But again, if it’s not obvious, I’m an amateur at this kind of analysis.
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If you are interested in who owns Apple stock, you can find out here: http://finance.yahoo.com/q/mh?s=AAPL+Major+Holders
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Nice, Al Gore picking up 60,000 shares of Apple in January at 7 bucks a share.
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I think the Marxist categories are getting less useful. What means of production does Bill Gates own? A really big CD/DVD burner?
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So true, Diane. And now–today–BOTH The Chicago Sun-Times AND The Chicago Tribune printed editorials pointing the finger of blame (for the CPS budget cuts) on–wait for it–the Chicago Teachers Pension Fund!!! (You all must read these!) It was only a matter of time–while they’re attempting to dismantle the Teachers Retirement System & the State University Retirement System (as well as other state pensions, but the teachers’ pensions are the REAL cause of Illinois’ money woes, doncha’ know?)–that the powers that be (aka, the BBC, aka the CCoC) would go after the Chicago teachers. After all, they’re all greedy union members, and they have the audacity to be outspoken in a democracy. Tsk, tsk.
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This series of comments needs a good instrumental:
Copland’s “Appalachian Spring”
I like because its eighth and final section has a moderate tempo with relative repose provided by hints of the opening theme (this after the briskly
paced inner themes–like the turmoil we feel in US public Ed right now).
http://m.youtube.com/#/watch?v=7U7hPHSkNJo&desktop_uri=%2Fwatch%3Fv%3D7U7hPHSkNJo
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Thanks for this, Joanna. I used to play it to my Kindergarten class in a for-profit private school and teach them to sing Tis a Gift to Be Simple. A comforting reminder of the happier low wage days in my career.
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I’ve noted previously that many – if not most – of the current corporate-style education “reformers” worship at the altar of “free” markets. They do so despite the lessons of history (the Great Depression and the Great Recession being two prime examples in the U.S. alone within the last 83 years).
And they do so despite still unfolding market-rigging scandals in the London Interbank Offered Rate (LIBOR) – which affects several hundred trillion dollars of assets and loans – and the ISDAfix, which is “a benchmark number used around the world to calculate the prices of interest-rate swaps.”
The emerging evidence is that some of the world’s biggest banks and trading companies gamed a “market” of some nearly $400 trillion of these trades, and not in favor of the public. And not surprisingly, some of the very same players (corporate and individual “investors”) were engaged in both the LIBOR and ISDAfix scandals.
Even more recent disclosures reveal that traders and bankers have rigged the foreign exchange (FX) market, one that involves daily transactions of nearly $ 5 trillion, which is “the biggest in the financial system.” As one analyst noted, this is “the anchor of our entire economic system. Any rigging of the price mechanism leads to a misallocation of capital and is extremely costly to society.”
See: http://www.bloomberg.com/news/2013-06-11/traders-said-to-rig-currency-rates-to-profit-off-clients.html
The corporate “reformers” say not a word about any of this. They pretend none of it has happened, or is occurring presently. Instead, many of them – and their political allies – point the finger of blame at public sector workers, and public education. And that’s simply unacceptable.
Quite frankly, it is possible to make money AND to treat employees well. In fact, it’s almost a no-brainer. Take a peek:
Part 1: http://www.youtube.com/watch?v=N-ebIGpZIWI
Part 2: http://www.youtube.com/watch?v=9SCxJTmS1Eo
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That sure got everybody going. Fascism rules in Amerika today. It is our job to turn that around. That is what education and intelligence is all about.
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