On Thursday, Chicago Public Radio (WBEZ.org) released a short but informative overview of the three primary issues at stake in the CPS/CTU contract negotiations: steps and lanes, healthcare costs, and ending pension compensation.

The WBEZ overview consists primarily of the four graphics dispersed throughout the text below. The pension graphic immediately below is particularly informative.

Photo illustration: Paula Friedrich/WBEZ

The image of the handshake illustrates the 1981 agreement that CPS would directly pay 7% of the 9% employee pension contribution, instead of paying that 7% directly to employees as part of a raise. In essence, CPS agreed it would divert 7% of teacher compensation to pensions rather than pay it directly to teachers. This was a mutually agreed upon way to compensate educators for their work. There has certainly been no decrease in the amount of work required to teach, so should there be a decrease in compensation for that work?

The second graphic illustrates the issue of educators paying more in healthcare costs as CPS pays less. The manner in which both sides present the issue is fairly straightforward. Basically, if you believe CPS has been paying health care costs for decades–not as compensation for teachers’ work–but as a perk completely disconnected from the value of a teacher’s work, then you agree with the CPS assertion that if they stop paying a major portion of teacher healthcare costs, it is not a pay cut. If however, you believe that CPS has been paying health care cost as part of the larger package to compensate educators for their work, then a drastic reduction in CPS healthcare payments is indeed a pay cut. A far simpler way of looking at this issue is that any contract change that leads to teachers getting less take-home pay is, in essence, a cut in pay.

Photo illustration: Paula Friedrich/WBEZ

The last issue–steps and lanes–is in my humble opinion, the least well articulated and explained. So I offer what I hope is an improved analysis following the illustration below.

Photo illustration: Paula Friedrich/WBEZ

There is a much stronger case than the one presented here for why step and lane increases are not full pay raises. In order to understand this we need to realize there are two types of pay raises, and CPS is trying to get rid of one of them.

Type 1: CPS pays teachers for more education and experience. These are called “Lane” and “Step” increases. CPS pays teachers more because they’ve taken some steps to become better teachers: they’ve studied for advanced degrees (lane increase) and gained experience (step increase). You can see this reflected in the salary schedule below: teacher compensation increases as the years of experience (steps) increase. This table also shows the difference between pay for a teacher in “Lane I” (bachelor’s degree) and a teacher in “Lane II” (master’s degree).

Degrees, certifications and experience are supposed to lead to advancement, promotion, and corresponding compensation increases. However, the only way to get promoted in the teaching profession in Chicago is to leave the classroom to become a dean, assistant principal or principal. Lane and step increases attempt to address this by keeping highly trained and experienced teachers in the classroom as a career.

Type 2: Teachers receive a yearly Cost of Living Adjustment (COLA). For example, in FY 2013 a first year teacher with a bachelor’s degree earned $52,094 (including pension contribution). In 2014 a first year teacher with the same bachelor’s degree would have taken home $53,136. This is illustrated below in the difference between 2012-13 and 2013-14 salaries.

Discussion: As part of the contract negotiations CPS is attempting to completely eliminate the COLA, implying that the lane and step increases for an individual teacher from one year to the next constitutes enough of a “raise.” However, there is an important reason that CPS has always paid educators a separate COLA aside from step and lane increases: what CPS’ new argument completely ignores is that without yearly cost of living adjustments, the value of teachers at each level of experience would decrease each year as a result of increases in the cost of living.

The 15-year truncated salary schedule below illustrates this point by following the amount CPS pays to fifth-year teachers with bachelor’s degrees (yellow highlight). While the actual salaries and duration of the contract are still being negotiated, this illustration takes current contract amounts and tracks them over a 15-year period to show the logical conclusion of eliminating the COLA. It also illustrates the impact of CPS reneging on the 1981 agreement to pay part of a teacher’s salary through a 7% pension contribution. This analysis clarifies the impact of CPS’ proposal on the teaching profession.

If taken to its logical conclusion, CPS’ effort to end the COLA means the salary for a fifth-year teacher in the year 2030 will be the same as it is today. However, A dollar in 2030 will be worth less than today’s dollar, and so will that salary. This means that overall teacher pay in 2030 will be effectively cut , since that amount will buy less in 2030 than it does in 2016. The negative impact of CPS’ argument to end yearly pay increases becomes even more apparent when you see that although individuals within the system will see some increases in pay over the course of their careers as they move from step to step, the wages of the entire profession will effectively go down as pay in each step and lane stagnates, while the cost of living rises over the years. Teacher pay gets even lower when the lack of a true salary increase is combined with CPS reneging on its agreed upon pension contribution.

The key question we must ask ourselves is, “Is that the kind of compensation model we think will attract and retain the best teachers for Chicago’s children?”

Clearly, step and lane increases are inadequate. There must also be yearly increases within each step and lane to account for inflation driven increases in basic cost of living. Without this, CPS cannot realistically claim to be offering teachers a pay raise.

Photo illustration: Paula Friedrich/WBEZ

CTU and CPS aren’t just doing different math; they’re basing their arguments on different versions of history. CPS officials’ argument can only stand if we ignore the facts of history. It can only stand if we ignore the fact that CPS itself proposed the pension pick-up as a direct response to teachers’ need for a pay raise. One theory about why CPS proposed the pension contribution option is that it allowed them to hold on to that 7% so it could earn interest on investments until the end of the year when CPS was supposed to transfer the funds to the Chicago Teacher’s Pension Fund. Of course, we know that for over a decade, CPS never made those payments. We know that it squandered the money on things like SUPES, interest on bad loans, penalties on toxic financial deals, custodial and engineering privatization, and building nearly 40% more schools in a district that is losing students.

Instead of owning up to its fiscal mismanagement and recklessness CPS has been engaging in a decade long public relations campaign to convince Chicagoans that teacher pensions themselves–not CPS mismanagement of pension funds–are the problem.

The term “pension crisis” obscures the real problem: we have a crisis of fiscal recklessness and lack of financial competence in our district officials and the city officials they report to. Even today, as they claim poverty, CPS and City officials continue to squander hundreds of millions of dollars on wasteful building projects that enrich their benefactors in the banking industry.

Perhaps teachers should have demanded their raise in 1981 instead of trusting CPS to stay true to its end of the pension bargain. In the end, it appears that it’s not the pension contribution, health care costs, or annual raises that need to change. Even if teachers accepted every loss CPS is asking them to take, the waste and mismanagement of our district and city leadership would keep us operating in financial crisis mode for decades to come.

You might read that last sentence and think that the change I will recommend is a change in city and district leadership. You would be wrong, or perhaps only half-right.

We elected these people. For decades we’ve been electing and re-electing officials who have done everything from selling off our parking rights, to undermining our school system. We elected the people who mismanaged teacher pensions and now City and CPS officials are trying to convince us that teachers should “sacrifice” for our poor choices at the ballot box, including the choice of not participating. How can we look teachers in the eye and ask them to let CPS renege on their pension agreement because of a crisis that we initiated when we elected the city and state officials who created it?

We did that Chicago, and we are the ones who need to change.

@TroyLaRaviere

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