06/03/2010 04:25 pm ET Updated May 25, 2011

On Budget, Time to Take On the Chicago Teachers Union

New York Mayor Michael Bloomberg announced earlier this week that he would cancel pay hikes for teachers and principals for the next two years. Teachers would still receive their step increases as they ascend the salary ladder, but the entire ladder won't shift up. After all, Bloomberg said, it doesn't make sense to hike the entire schedule -- effectively giving teachers two raises -- when doing so would mean having to layoff 4,500 teachers.

Contrast that to Chicago. Here, the Chicago Public Schools faces the worst budget deficit in anyone's memory. Yet the Chicago Teachers Union is willing to sacrifice 2,700 of its members -- thereby forcing its remaining teachers to lead classes of 35 -- in order to preserve a 4 percent pay hike that comes on top of the standard step increase that teachers will receive anyway.

Chicago Public School teachers are already among the best compensated in the country. Right now, starting Chicago elementary teachers earn $45,450 for teaching a 5 hour and 45 minute instructional day, 174 days per year -- the minimum allowed under Illinois law. First-year New York elementary teachers, by comparison, earn $45,530 for teaching a 6 hour and 30 minute instructional day, 180 days per year.

Chicago's 4 percent pay hikes -- which are locked into contracts negotiated before the onset of the Great Recession -- would bring total starting pay for a CPS teacher to $47,266. Using some back of the envelope math,* the adjusted, hourly wage of a CPS teacher is 69 percent higher than that of a New York teacher who resides in Queens. Without the hike, CPS teachers would be only a paltry 62 percent richer than their Queens, New York counterparts.

Though no Bloomberg-style commonsense has yet penetrated Chicago, the fiscal realities are the same as New York's. This means that Chicago Mayor Richard Daley and CPS chief executive Ron Huberman have three options to deal with rising personnel costs: invoke the union contract's emergency clause to force a renegotiation, implement a doomsday budget that devastates the public schools, or tap previously undiscovered oil reserves underneath the city.

Canceling the pay hike or instituting massive layoffs would save about $175 million, closing about 30 percent of the total deficit. The Chicago Teachers Union's choice? Do neither.

"I want to make it clear that we will not agree to any proposal [that] destroys our contract," CTU chief Marilyn Stewart said in a press release. "Nor will we tolerate the implied threats being made by Mr. Huberman that he may have to cut programs and services for our students or lay off teachers."

Stewart's opinion seems to be widely held throughout the union. The second-place vote getter in the preliminary election, hard-line challenger Karen Lewis, would probably be even less likely to negotiate a new contract, and the one candidate who said he'd be open to negotiations, Ted Hajiharis, finished dead last with just 6 percent of the vote. Without concessions from the union, CPS would have only one recourse: ask Chicagoans for even more money.

Taxpayers -- ether through state income taxes, or local property taxes -- will already have to chip in to cover a significant part of the budget deficit, which would stand at some $425 million even if the 4 percent pay hike were eliminated. If the increase is not deferred, the district would have to find $175 million in revenues on top of the new $425 million that taxpayers will likely have to contribute. That means that to support the pay raises alone, every family of four in Chicago would have to contribute an additional $250.

The CTU can try selling that to Chicagoans hurting from double digit unemployment and frozen private sector wages, but my sense is that they will be a bit averse to shelling out extra cash so that the best compensated teachers in America can receive pay hikes on top of their annual raises. Barring that, the union should explain to its 2,700 most junior members -- and their students' parents -- why their jobs are less important than pay hikes for its more senior teachers.

But rather than grapple with the true magnitude of the problem, the union will likely call for cuts that would amount to little more than a drop in the bucket. Sure, Kaplan's Instructional Delivery Systems should be axed, but this would save just $30 million; administrative staffing, including among Huberman's new, highly paid performance managers, should be reduced, but the number of employees at question numbers in the dozens. Even if CPS fired every administrator, Huberman included, the district wouldn't save nearly enough money to close the deficit.

The unions will also likely call for cuts that are counterproductive, like making deeper cuts to the per pupil spending rate at charter public schools (full disclosure: I teach at one) than at traditional public schools. There's no reason that charter schools deserve any less -- or any more -- money than traditional schools given that they operate in the same neighborhoods and teach the same children. And most charters have also dealt with the budget crunch the right way: giving teachers raises of about 3 percent (compared to a step of 4 percent plus a schedule hike of 4 percent) while making no layoffs and keeping class sizes stable.

Since neither Stewart or Lewis will consider touching the pay hikes, Daley and Huberman will have to face down the union, even if it means risking a quarter century of labor peace. To adopt Rahm Emanuel's philosophy, there's no better time than a crisis for CPS to begin the long, arduous effort to close its structural deficit and bring the growth in its personnel costs under control.


*For New York, $45,530 for a 6 hour and 30 minute instructional day and 180 days per year comes to $38.91 per hour. Because of Chicago's comparatively low cost of living, next year's CPS salary of $47,266 translates to $65,637 in Queens, New York (for Brooklyn, it would be $74,239; Manhattan, $90,690). A salary of $65,637 for a 5 hour and 45 minute instructional day and 174 days per year, comes to $65.60 per hour. Using the same assumptions, this year's CPS salary of $45,450 translates to a Queens wage of $63.08 per hour.