Special Report

Teachers’ Union Fat Cats

They're in solidarity with Occupy Wall Street, which actually should be camping out in front of their offices.

By 10.26.11

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There's something about class warfare rhetoric that always seems to attract even the wealthiest limousine left-leaner -- even when they have no interest in handing over any of their own ducats. Consider the two-month-long Occupy Wall Street protests that have spread out from the shadowy canyons of New York City's financial district to areas as distant as St. Louis and Indianapolis. In the last month, the original crowd of underemployed college graduates have attracted such big names as 30 Rock star Alec Baldwin (who is as renowned for his lefty credentials as for his infamously abusive tirade against his own daughter), smarmy British comedian Russell Brand (whose lack of jokes makes him Europe's version of Dane Cook), and hip-hopper Kanye West (who came down to the occasion wearing a sparkly gold chain, a $355 Givenchy shirt, and a $23,000 Rolex).

But it's not just the celebrities who are joining in on the fun. The National Education Association and the American Federation of Teachers have spent the past month ginning up their own public relations machines so they can declare their solidarity for the Occupy Wall Street protesters and for all which they stand.

Earlier this month, AFT President Randi Weingarten (who took a few steps out of the union's plush offices on Broadway to join the protests) proclaimed that "we need to get serious as a nation about working together to create economic opportunities for all Americans." Twenty-four of the union's rank-and-file members in Boston decided to politicize their classrooms by holding what they call a "grade-in" in sympathy of their, umm, comrades. And Leo Casey, the union's mouthpiece for its New York City local who never misses an opportunity to use class warfare rhetoric to criticize school reformers, declared that "public education, teachers and unions have increasingly come under attack from the One Percent," including Big Apple Mayor Michael Bloomberg, who has successfully weakened the union's influence.

Meanwhile the NEA's affiliates in states such as Kentucky and Missouri have joined in the protests. The union's California unit has gone even further by offering its members a "lesson plan" so they can teach their students something other than the three Rs. Declared Dean Vogel, the president of the NEA's Golden State unit: "It's time to put Main Street before Wall Street, and for corporations to pay their fair share of taxes."

As with the celebrities, there's something rather hilarious about the appearance of the nation's two largest teachers' unions at a protest against allegedly pampered fat cats. Few organizations have managed to become so influential -- and build such vast coffers -- at the expense of taxpayers and their children.

The AFT alone collected $211 million a year in dues during its 2010-2011 fiscal year (most of it by force from the very teachers whose interests they proclaim to represent), while the far-larger NEA pulled in $397 million during its 2009-2010 fiscal year period. Each union, on their own, collects more dues than the American Federation of State County and Municipal Employees, Service Employees International Union, or the International Brotherhood of Teamsters. When one adds in the revenues collected by their affiliates, the two unions are billion-dollar organizations with budgets that match their corporate peers.

The leaders of both unions are as well paid as most midsized corporate chief executives and leaders in the nonprofit arena. AFT President Weingarten, for example, collected $493,895 in 2010-2011, a 15 percent increase over the same period last year; Weingarten's NEA counterpart, Dennis Van Roekel, collected $397,221 in the previous year. Their staffs are also well-compensated. Four hundred thirty-three of the NEA's staffers earned at least $100,000 in annual compensation; the 193 AFT staffers collecting six-figure checks include David Dorn, the union's director of international  affairs (who was paid $223,965 last year), and Hartina Flournoy, a longtime Democratic Party operative who earns $231,337 a year as Weingarten's assistant.

When you consider that teachers' union leaders at all levels collect lucrative sums from their unions and and additional salaries from the school districts that are servile to them, the wealth they acquire at the expense of taxpayers is astounding. New York City, for example, will shell out $9 million to 1,500 AFT officials even though they spend almost no time teaching. One of those double-dippers is Tom Dromgoole, an AFT representative who will collect $100,049 from the city (on top of his $50,461 paycheck from the union) even though he will only teach English classes for two days during the school year. And when they retire, they also collect sweet pension checks long after they left the classroom. Former NEA President Reginald Weaver, for example, collects an "annual annuity of $242,657" from Illinois' busted pension system, thanks to a state law that allows union bosses to base their final year's salary off their unionizing work; he's one of 119 union players who get the proverbial fat of the land.

The two unions also maintain cozy ties to the Wall Street firms they decry. Through one of its affiliates, the NEA works with insurance giant Prudential to peddle term life insurance to members as part of its "benefits" package; the AFT also sells insurance to its members with the help of MetLife. Both unions also manage voluntary employee benefit associations (or VEBAs) which provide healthcare to rank-and-file members (and charge states and school districts for the privilege). This hasn't always worked out for either the unions or its members. Two years ago, the NEA had to take control of its once-powerful Indiana affiliate after the unit (with help of investment advisers that included powerhouses Morgan Stanley and UBS) made a series of bad bets that led to its insolvency.

Few groups match the NEA and AFT in lobbying and campaign spending. The $297 million in campaign donations given by the unions between 2000 and 2011 makes them the biggest players in local, state, and national politics. The AFT alone spent $34 million in 2010-2011 on lobbying and contributions to like-minded nonprofits which, in theory, help the union build a coalition on behalf of its goals. This includes $150,000 to Build a Stronger Ohio, which unsuccessfully worked last year to keep John Kasich from winning the Buckeye State's governorship, and $350,000 to the Economic Policy Institute, a think tank cofounded by former Clinton administration economic honcho Robert Reich, whose studies on education always seemingly dovetail nicely with the union's agenda.

Until recently, such spending has helped the unions maintain its influence over the nation's traditional public education systems. And this, in turn, has helped the NEA and AFT fulfill their goal of making teaching the most-lucrative profession in the public sector. This has especially paid off well for Baby Boomers. Thanks to the array of degree- and seniority-based privileges, near-lifetime employment, free health insurance, and defined-benefit pensions, the average 35-year teacher with a bachelor's degree earns $61,100 a year (or more than the median household income of $51,425), and can retire at age 55 (or 10 years earlier than private-sector counterparts) with a pension of as much as $2 million (depending on when she retires).

The NEA and AFT, along with its allies among the institutions who have long dominated education, have pampered themselves quite nicely -- at the expense of taxpayers and their children. And that should anger the Occupy Wall Streeters. After all, they will bear those burdens once they stop protesting and become gainfully employed in the private sector.

The costs start with $1.4 trillion in defined-benefit pension deficits and unfunded teacher retirement healthcare costs, a legacy of the decades of dealmaking between NEA and AFT affiliates, state governments, and school districts. NEA and AFT bosses have helped exacerbate the insolvency of pensions by sitting on their boards -- and approving an array of inflated growth rates, unrealized losses, overly optimistic methods of valuing assets, and risky hedge fund deals that should have never been made in the first place.

Then there are the even greater costs facing taxpayers in the form of welfare payments for high-school dropouts, who lack the strong literacy, math, and science skills needed for even high-paying blue collar work. In September, 14 percent of American high school dropouts age 25 and older were unemployed on a seasonally adjusted basis, according to the U.S. Bureau of Labor Statistics, a slight decline from the same period last year; one-third of dropouts age 16-to-24 are out of work on a not seasonally adjusted basis.

Thanks in part to the NEA and AFT, the nation's traditional public schools have become a $594 billion drain on taxpayers. The two unions have defended practices that have kept laggard teachers on the payroll. This has perpetuated the low quality of instruction in the nation's schools, an underlying reason why 33 percent of American third-graders read "Below Basic Proficiency" on the National Assessment of Educational Progress, while 27 percent of eighth-graders are mathematically illiterate. The NEA and AFT have also stridently opposed efforts to expand school choice options that allow for families to opt out of failing urban schools and mediocre offering in suburbia -- and fought efforts to let families reform the schools in their neighborhoods. All in all, the two unions have proven to be the very fat cats they decry.

Perhaps the Occupy Wall Street gang would be better off moving their protests down to D.C. in front of the NEA's and AFT's ritzy headquarters. Or do what a group of college grads -- including Teach For America founder Wendy Kopp and her acolyte, Michelle Rhee -- did a decade ago: become school reformers and help weaken teachers' union influence.

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About the Author

RiShawn Biddle the editor of Dropout Nation , is co-author of A Byte at the Apple: Rethinking Education Data for the Post-NCLB EraHe can be followed at Twitter.com/dropoutnation.