The think tanks have been studying the growing government employee pensions and benefits scandal for several years now, and even the mainstream media is getting into the fray.
Bill Zettler is a business owner living and working in the Chicago suburbs who, several years ago, discovered that teacher salaries and public employee contract terms and pensions were far beyond anything available in the private sector. Since then he has been investigating the issue and since 2005 he has his work here.
His findings are startling, and the word “scandal” is almost too mild to describe what has been going on when it comes to public government employee compensation. This has been a big problem nationally, but Illinois is particularly alarming.
As Illinois Republican legislators and candidates grope around in the dark looking for a way out of their irrelevance, Bill Zettler has handed them a searchlight. The fact that they don’t make use of this issue compounds both their electoral problem and the public employee pay and benefits problem.
At some point the word “reform” has to mean something when spoken by Illinois Republicans. If they can’t address excessive government employee pay and pensions in a time of skyrocketing taxes, then as we’ve said so often, we’re not sure what their usefulness actually is to the cause of good government.
Bill Zettler hit another homerun this week with another devastating report posted here, with accompanying chart. These are his subheadings:
– Teacher’s Jobs Are Protected By Tenure
– Teachers Work Fewer Days Per Year
– Teachers Retirement Plans Much More Lucrative
– Teacher Compensation At least 40% Higher Than Degreed Engineer
– Teachers Have Non-monetary Quality of Life Advantages
– Teacher Mythology Perpetrated by Unions, Politicians and the Media
Here are a few of his excellent observations (emphasis added):
“Compare [the job guarantee of teacher tenure] with Motorola which has cut 84,000 employees since 2000 including thousands of white collar engineers and executives. Although the value of tenure is difficult to calculate it certainly has a value greater than zero otherwise why won’t teachers give it up? I think if you asked a Motorola employee how much he would be willing to pay to guarantee his employment for the next 30 years (with a raise each and every year) he would say at least 10% of salary so that is the number we will use although a reasonable person could argue for a higher or lower amount.”
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“As of 2007 they say that for each of the next 38 years the teachers’ employers i.e. the taxpayers of Illinois must pay an amount into the pension system equal to 25.22% of each teacher’s salary. That compares with a typical private sector employer paying about 11% (6.2% Social Security and 5% 401K contribution). So let’s say 14% difference although it could be higher than that if the TRS Pension Fund does not average 8.5% return each year for the next 38 years.
For example if the investment return averages 6.5% the taxpayer pension contribution will be more then 36% of the teacher’s salary. The difference between public (11%) and private (25%) employer’s contributions explains why teachers contributing 9% to their retirement have much more valuable retirements than private employees contributing 11% to their retirement.”
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“Although we have mostly discussed monetary issues there are also quality of life issues associated with every job. In the case of teachers there is certainly a large benefit to having 15 weeks a year off (182 days = 36.4 weeks). Also knowing every year you will have 2 weeks at Christmas and other holidays off as well as being home with your children when they are off in the summer would certainly be a plus.”
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Bill Zettler adds a review of what he calls “some of the more egregious myths” about things like teachers being underpaid relative to their peers and the so-called teacher shortage.
In a time when the state of Illinois is facing record levels of red ink and a stagnating economy, Republican legislators continue to ignore the evidence being offered by citizens like Bill Zettler, who has outlined the insanity of burdening taxpayers with ridiculously high public employee compensation packages. Zettler’s conclusion is dead on:
“And they force it on taxpayers because of the undue influence of teacher union contributions to politicians. Only when the connection between politicians and teacher union donations is broken will the teaching profession enter the same economic world the rest of us live and work in.”
©2008 John Francis Biver