Jeff  Carter

The Chicago Teachers Union decided to flex it’s political muscles and strike. It’s not really a forced strike, as Mayor Rahm Emanuel said, “They chose to strike.”. This strike isn’t about money, it’s about power. Will the Mayor bow down to the teachers union?

A couple of years ago, I wondered about how much a teacher really makes. You can click over and see the math. It’s pretty current, although since posting, the numbers might have gotten bigger. Essentially, teachers make more than you really think. The reason for that is that they have pensions that are guaranteed. They get annual cost of living raises when they are retired, and they have no fear of ever losing money. To account for this lack of risk correctly, all the pension money should be amortized back into their annual salary. Additionally, because school is only in session around 8 months per year, that needs to be amortized in. That’s how much they really make.

Ironically, people read that post and think that I am against paying teachers. That’s not the case. I’d pay them more. However, I’d balance that with a few things. First, I’d get rid of guaranteed pensions. The money ought to go into a 401(k) just like private workers. Secondly, they ought to pay more for medical benefits-but that goes right into reforming our entire medical system to be more market based. If you were able to make that reform, teachers medical insurance costs would be lower than they are today.

Teachers Unions donate exclusively to the Democratic Party. Like most public sector unions, they donate money to Democrats so they can sit across from them at the bargaining table. When a Republican wants to make a change in education, they are assailed and their character assassinated. Hard to do that with Mayor Emanuel, since he is a liberal Democrat.

What teachers are really against is accountability. The movie “Waiting for Superman” lays that fact bare. Teachers get tenure, and once attained, it’s virtually impossible to get rid of poor performing teachers. Some of the best performing private companies routinely cut their poorest performing employees every year. While public school education isn’t exactly like that-we ought to be able to get rid of poor performing teachers.

Jeff Carter

Jeffrey Carter is an independent speculator. He has been trading since 1988. His blog site, Points and Figures was named by Minyanville as one of The 20 Most Influential Blogs in Financial Media.