“Underpaid Teachers” Richly Rewarded

Everybody knows that teachers are underpaid, right? Actually, we don’t know what teachers should be paid because individual teachers aren’t allowed to negotiate their pay with the people using their services–unions and politicians do the bargaining. Still, a few stats in a Washington Post article about a proposed contract for Washington D.C. public school teachers suggest that, if anything, many D.C. teachers are overpaid.

Using salary information in the article, we see that under their current contract D.C. teachers must work 7 hours a day for 192 days, and their starting salary is $39,000. Per-hour, that comes to $29.01, which beats the mean hourly pay for all D.C. residents by 59 cents.

Under the proposed contract, the starting salary would become $42,500 to work 7 ½ hours for 196 days, actually dropping the hourly rate by 10 cents. Importantly, though, the four extra days would be dedicated to “training,” and the extra half-hour to “planning,” so there really wouldn’t be much work added to the teachers’ load.

As impressive as these starting salary numbers are, though, the real eye-opener is at the top of the teachers’ salary ladder.  Currently, the highest rung on the ladder is $75,000, or a hefty $55.80 an hour. Adjusting that to 40 hours per week for 50 weeks a year (roughly what most people work) the highest paid teacher would get an annual salary of $111,600 – not bad! Under the new contract that would become even more generous, with the unadjusted salary rising to $87,000, the new hourly rate hitting $59.18, and the “normal” annual salary reaching $118,360!  And, of course, none of this includes teachers’ benefits, which are generally considered to be more generous than what’s available in the private sector.

Now, before anyone starts calling for my head, as happened the last time I wrote on this topic, let me say I don’t doubt that that many teachers work beyond their contracted hours. Of course, there’s also no question that lots of people work in excess of their time “on the clock.” With that in mind, the hours in the teachers’ contract are what teachers have agreed to, so it is the only fair basis on which to calculate their remuneration.

So let’s put this in perspective. As mentioned, a starting D.C. teacher makes more per hour than the average wage for all D.C. residents. Even more surprising, under the proposed contract a teacher making the top wage would get $12.16 more per-hour than the average D.C. citizen in a management position, including sales managers, marketing managers, and IT managers. Indeed, the only managerial group that would make more than teachers on an hourly basis would be the absolute head honchos – chief executives.

And here’s the kicker: What have D.C. teachers produced to deserve all this money? According to the Post article’s main point, a school system so decrepit that parents are leaving it in droves.

More Socially Responsible Consumption

Joanna of Fey Accompli reminds us of two outstanding recent articles on virtuous consumption. From the March issue of Reason, there is Kerry Howley’s abundantly informative Absolution in Your Cup: The Real Meaning of Fair Trade Coffee. And in the handsomely redesigned new Doublethink, you can find Katherine Mangu-Ward’s amusing The Virtuous Eater: Self-Improvement Through Conscientious Consumption. You won’t regret consuming either of these.

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Unnecessary Restrictions Are Holding HSAs Back

Federal law requires consumers to have a “qualified high-deductible health plan” before they can open a tax-free health savings account (HSA).  Today, Sarah Rubenstein of the Wall Street Journal reports that those rules make HSA-compatible coverage more expensive than necessary. 

In a recent paper, I argued that Congress actually requires HSA holders to have a “high-but-not-too-high-deductible health plan,” and that Congress should let consumers choose their own health insurance.

Calling All Parents

For months, a battle has raged in New York City over whether students should be allowed to have cell phones in public schools. In fact, in April the city ran something of a dragnet operation in schools looking for weapons and instead ended up confiscating 129 phones at one school alone.

Parents say their children need the phones to keep in touch with them on the kids’ way to or from school. The Bloomberg administration counters that having the phones in schools can be disruptive, that they are sometimes used for cheating on tests, and are even employed in gang activities. And now the dispute has reached the point where the City Council is getting involved, promising to pass legislation permitting children to carry phones.

All of this, of course, is ridiculous. Gangs operated in school for decades without cell phones, and for years NYC schools have successfully practiced a sort of “don’t ask, don’t tell” policy that let kids carry phones as long as they didn’t go off in class or get used for nefarious purposes. But this is what happens when you force everyone to support a single, government-run, school system: People fight over everything because only one group’s values and opinions can ultimately become policy. The result: All kinds of stupid arguments, and schools that are constantly paralyzed by politics.

Sweatshops and Socially Responsible Consumption

Nicolas Kristof has a wonderful column, “In Praise of the Maligned Sweatshop,” in today’s New York Times. Regrettably, it is behind the paywall. Luckily, Greg Mankiw has excerpted a good bit. Important nugget:

[C]ompanies like Nike, itself once a target of sweatshop critics, tend not to have highly labor-intensive factories in the very poorest countries, but rather more capital-intensive factories (in which machines do more of the work) in better-off nations like Malaysia or Indonesia. And the real losers are the world’s poorest people.

Here is a great example of the way so-called “socially responsible” consumption can be self-undermining. Not that there’s necessarily anything wrong with wanting justice with your Corn Flakes. Acts of consumption are causes of effects, and we have every right to worry about what those effects will be. But if the effect you’re intending goes beyond the satisfaction you get from a bowl of Corn Flakes, then you need to actually know how cause and effect are related in order to be sure that you’re not causing exactly what you’re trying to prevent, which wouldn’t be very responsible, would it?

In wealthy societies, where people are more in need of meaning than further material comfort, it is inevitable that consumers will want more than just coffee beans and sneakers. Many of us want coffee beans and sneakers the consumption of which will affirm our identity and provide a small injection of meaning into our lives. The difficulty is, consumers are just terrific at identifying good coffee qua coffee, or good shoes qua shoes, but are simply lousy at identifying good coffee or shoes qua output of a fair process of production that really helps the poor. You can’t taste bad economics in your Costa Rican shade-grown and unseen suffering doesn’t chafe when you run.

Maybe we need a new campaign for socially responsible consumption: “Look for the sweatshop label.” Or, alternatively, just try buying products that are the best value for the money. The “being cheap never felt so good” campaign?

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No, Really — You Have a Point

Matthew Holt of TheHealthCareBlog.com devotes a lengthy post to criticizing my (much lengthier) paper, “Health Savings Accounts: Do the Critics Have a Point?

Holt – who has an HSA himself, as I understand it – is not entirely critical. For example, he calls Cato “the sensible libertarian’s think-tank.” As for the uncomplimentary parts, I found them odd.

For example, Holt accuses me of concluding that no, critics of HSAs do not have a point. Yet the paper has an entire section titled “Criticisms That Raise Serious Issues” (pp. 11-22) where I validate many criticisms of HSAs. In particular, I agree that in some instances people with high-deductible insurance might skimp on care in ways that harm their health (though there is scant data to demonstrate that this actually happens). Thus, I agree with the Commonwealth Fund that HSAs should be liberalized to allow people to choose insurance with coverage below the deductible.

Also, Holt accuses me of ignoring the fact that risk segmentation results in reduced subsidies to the sickest insureds. Yet that is a central theme of the “students & professors” hypothetical (pp. 6-8). And on page eight I write:

Though HSAs may reduce hidden subsidies to sicker workers, they do not preclude subsidizing those workers in other ways.

I could go on. From his criticism of it, it doesn’t appear Holt read the paper very closely.