New York City Mayor Bill de Blasio has reached an agreement with the city's teacher's union on a new contract granting $3.4 billion in back pay. Here are three quick things to remember as the details continue to emerge:
1. As I noted on Twitter, the $3.4 billion in back pay is equivalent to about 1/8th of the teacher pension plan's $24.9 billion unfunded liability. All public policy decisions reflect a set of choices, and Mayor de Blasio and teachers union head Michael Mulgrew have just decided they value retroactive pay over the security of the city's pension plan. This doesn't even include the fact that higher salaries today will lead to higher pension payments every year going forward. Teachers nearing retirement will get an especially sweet deal because they'll have fewer years to pay into the pension system based on their new, higher salaries but many years to collect their enlarged pensions.
2. As a side note, I've seen numerous media accounts include a statement similar to one the Times ran, saying New York City teachers have "worked for nearly five years without a contract." That's not an accurate characterization. New York City teachers and schools were still bound by the rules in the old contract, and teachers were still paid according to the salary schedule ratified under the old contrct. There was no new contract, but that doesn't mean they didn't have a contract in place.
3. Even under the old, expired contract, indiviual teachers still earned raises. Teachers still progressed along the step-and-lane salary schedule. See the bottom of this post for an explanation from Chicago of how this plays out for individual teachers. In New York, a beginning teacher with only a bachelor's degree in 2008-9, the last year of the old contract, earned $45,530 in her first year. She would have earned $64,006 this year, an increase of 40.5 percent. A mid-career teacher with a Master's degree and 15 years of exerience would have earned $79,531 in 2008-9. This year, as a 20-year veteran, she would have earned $89,307, an increase of 12.3 percent.