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Manhattan Institute

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Most Teachers in Chicago Strike Never Benefit from Pensions That Strangle the System — and Taxpayers. There’s a Better Way.

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Most Teachers in Chicago Strike Never Benefit from Pensions That Strangle the System — and Taxpayers. There’s a Better Way.

Chicago Tribune October 22, 2019
EducationPre K-12
Public SectorPension ReformThe Role of Unions

Chicagoans know the immediate cause of the city’s teachers strike: Teachers are dissatisfied with their pay, class sizes and support staff. Meanwhile, taxpayers recognize that Chicago’s teacher salaries, the median of which is more than $78,000, are high compared with other big cities, and the school district is on shaky fiscal ground. So it seems a little rich for the Chicago Teachers Union to demand bigger raises than the district has already promised, along with the hiring of more teachers and staff.

Nonetheless, Mayor Lori Lightfoot and Chicago Public Schools CEO Janice Jackson have bent over backward trying to satisfy the teachers’ demands, while failing to address the fray’s root cause. The problem — one that few in the standoff seem to realize, but which is causing problems for both sides — is the structure of teacher retirement benefits. As the structure currently operates, it exacerbates the astronomical pension debt burden Chicago taxpayers face while benefiting only a small number of teachers. High costs for a few teachers constrain what the district can do to meet all teachers’ (and students’) needs.

On average, to earn a full pension, a teacher must remain in the same state or district for 25 years — a condition that less than half of teachers nationally will meet. In Illinois, where the vesting period for the pension system is 10 years of employment, only half of new teachers will ever vest in the system. And only 1 out of 5 teachers in Illinois will ever break even from their pension plan.

Continue reading the entire piece here at the Chicago Tribune

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Daniel DiSalvo is a senior fellow at the Manhattan Institute and a professor of political science at the City College Of New York (CUNY). Follow him on Twitter here.

Photo by Scott Olson/Getty Images

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