How the NEA and AFT play Monopoly with your kids.
Student achievement at the end of high school has stagnated or declined, depending on the subject, since we started keeping track around 1970. Over that period, the cost of sending a child through the K-12 public system tripled, even after adjusting for inflation. Public school employee unions, the National Education Association and American Federation of Teachers, are partly to blame for this, but the attention focused on collective bargaining in particular has been misplaced. The unions’ success in driving up costs and protecting even low-performing teachers stems less from their power at the bargaining table than from the monopoly status of their employer. Taxpayers, and most families, have no place else to go.
In his post-apocalyptic film Sleeper, Woody Allen explained the apocalypse with the line: “a man named Albert Shanker got hold of a nuclear warhead.” This was in 1973, when Shanker headed New York City’s muscle-flexing teachers’ union. In those days, the goals of school employee unions were widely understood: uniformly better compensation, greater job security, and reduced workloads for their members. That’s what labor unions are for. If NEA and AFT leadership failed to pursue those goals, their members would replace them with people who would.
But for a while, during the sustained economic growth of the '80s, '90s, and early '00s, the public ceased to think very much about these unions as unions. The NEA and AFT have often portrayed themselves as selfless champions of children, who sought only to improve the quality of American education. It’s hard to say how widely their PR puffery was believed, but certainly it was the dominant framing in the media and was seldom challenged by more realistic appraisals. (Except, ironically, by Shanker himself, who once declared that he would “start representing schoolchildren” when they “start paying union dues.”)
Since the late fiscal unpleasantness began in 2008, all that has changed. It has changed because the money has run out. Think of public schooling as a game of Monopoly in which one of the players, the unions, owns 90 percent of the properties (9 out of 10 American students attend public schools). The other players, taxpayers, have some cash and a few properties of their own, but they can’t make it around the board without paying ever-increasing union rents-just as, in real life, taxpayers must continue funding public schools no matter how much they cost. They can survive for a while, of course, and while they do the unions reap handsome rewards. Eventually, though, the taxpayers run out of money. Game over.
In the board game, we’d call the unions the “winners.” In reality, their victory is Pyrrhic. They’ve been so successful in protecting their members’ jobs (including those of the mediocre and inept), raising salaries and benefits, and reducing workloads (by inducing more hiring to lower the student/teacher ratio), that they have precipitated budget crises all over the country, derailing their own gravy train.
Where has all that extra money gone, if not toward improving quality? Some has fueled higher salaries and benefits for teachers, who enjoy total compensation 42 percent higher than their private-sector colleagues. More has gone into expanding the public school workforce. Astonishingly, employment in public schools has grown 10 times faster than enrollment over the past four decades (Figure 2).
So while every other service or product has gotten better, more affordable, or both, public school productivity has collapsed. It is now costing us more to teach kids less. If our schools had merely maintained the level of productivity they enjoyed in 1970-not improved as other fields have, just held their ground-American taxpayers would be saving roughly $300 billion a year. In California alone, the $26 billion budget deficit would be instantly wiped out and replaced with a $10 billion surplus.
HOW DID THIS HAPPEN? How did unions grow the public school workforce so much faster than enrollment? For those familiar with the overall trend in unionization, their feat at first seems miraculous. Because while the teachers unions were growing extravagantly, unions nationwide were shriveling up. In the private sector, union membership declined from 31 percent to less than 7 percent of the workforce since 1960. Among public school employees, it doubled from 35 percent to 70 percent over the same period.
Upon reflection, it isn’t hard to explain this divergence. In the private sector, unionization is self-regulating. In the public sector, it is not. When a business makes excessive concessions to a union and is thereby forced to raise prices above those of its competitors, it loses customers. As it loses customers, it lays off workers, eroding the union’s power. If this situation continues, the business fails and the union members who sought above-market compensation lose their jobs. Overly aggressive unions thus price their own workers out of the workforce. Conversely, less aggressive unions have little appeal to workers because they offer costs (in the form of dues) without value (in the form of above-market wages or benefits).
The easier it is for consumers to shop around, the less value unions can add, because consumers can more easily place their orders with competitors. And thanks to advances in technology comparison-shopping has been getting progressively easier for decades. That’s made it increasingly difficult for private sector unions to win above-market wages or benefits.
More than that, the heightened competitiveness of modern markets has meant that the interests of workers and management are more closely aligned than ever. A business that tried to raise profits by paying below-market wages would risk losing its best employees to its competitors or to businesses in related fields, injuring its productivity and ultimately its profitability.
None of this has been lost on the workers themselves. As the usefulness of private sector unions has declined, so has their membership.
But what happens in an industry in which one producer is able to give its product away for “free,” draws its revenues from compulsory taxation, is able to hide the full cost of its operations from the public, and is legally required to remain in business? Obviously the unions representing workers in that industry can win substantially above-market compensation and pad their membership dramatically without fear of putting themselves out of business in the short or even the medium term. That, of course, is what has happened in our nation’s state-run school systems. The self-regulating aspects of union action in competitive markets do not exist in the public sector.
BUT AFTER NEARLY HALF A CENTURY, public school employee unions have finally begun to suffer from their own success. State-run schooling has become so profligate under their ministrations that America can no longer afford it. In an effort to moderate the teachers unions’ voracious consumption of tax dollars, governors and legislators in several states have sought to curtail their collective bargaining powers. So it’s useful to ask: what role have these powers actually played in the unions’ ability to drive up spending?
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