"Joseph Gwinn" wrote in message
...
Oh, To Be a Teacher in Wisconsin -- How can fringe benefits cost nearly
as much as a worker's salary? Answer: collective bargaining.

By ROBERT M. COSTRELL

The showdown in Wisconsin over fringe benefits for public employees
boils down to one number: 74.2. That's how many cents the public pays
Milwaukee public-school teachers and other employees for retirement and
health benefits for every dollar they receive in salary. The
corresponding rate for employees of private firms is 24.3 cents.

Gov. Scott Walker's proposal would bring public-employee benefits closer
in line with those of workers in the private sector. And to prevent
benefits from reaching sky-high levels in the future, he wants to
restrict collective-bargaining rights.

The average Milwaukee public-school teacher salary is $56,500, but with
benefits the total package is $100,005, according to the manager of
financial planning for Milwaukee public schools. When I showed these
figures to a friend, she asked me a simple question: "How can fringe
benefits be nearly as much as salary?" The answers can be found by
unpacking the numbers in the district's budget for this fiscal year:

?Social Security and Medicare. The employer cost is 7.65% of wages, the
same as in the private sector.

[image deleted] Public employee protests spread across the Midwest.

http://si.wsj.net/public/resources/i...D_201102241958
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?State Pension. Teachers belong to the Wisconsin state pension plan.
That plan requires a 6.8% employer contribution and 6.2% from the
employee. However, according to the collective-bargaining agreement in
place since 1996, the district pays the employees' share as well, for a
total of 13%.

?Teachers' Supplemental Pension. In addition to the state pension,
Milwaukee public-school teachers receive an additional pension under a
1982 collective-bargaining agreement. The district contributes an
additional 4.2% of teacher salaries to cover this second pension.
Teachers contribute nothing.

?Classified Pension. Most other school employees belong to the city's
pension system instead of the state plan. The city plan is less
expensive but here, too, according to the collective-bargaining
agreement, the district pays the employees' 5.5% share.

Overall, for teachers and other employees, the district's contributions
for pensions and Social Security total 22.6 cents for each dollar of
salary. The corresponding figure for private industry is 13.4 cents. The
divergence is greater yet for health insurance:

?Health care for current employees. Under the current collective-
bargaining agreements, the school district pays the entire premium for
medical and vision benefits, and over half the cost of dental coverage.
These plans are extremely expensive.

This is partly because of Wisconsin's unique arrangement under which the
teachers union is the sponsor of the group health-insurance plans. Not
surprisingly, benefits are generous. The district's contributions for
health insurance of active employees total 38.8% of wages. For
private-sector workers nationwide, the average is 10.7%.

[Image deleted] Wisconsin Gov. Scott Walker

http://si.wsj.net/public/resources/i...D_201102241526
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?Health insurance for retirees. This benefit is rarely offered any more
in private companies, and it can be quite costly. This is especially the
case for teachers in many states, because the eligibility rules of their
pension plans often induce them to retire in their 50s, and Medicare
does not kick in until age 65. Milwaukee's plan covers the entire
premium in effect at retirement, and retirees cover only the growth in
premiums after they retire.

As is commonly the case, the school district's retiree health plan has
not been prefunded. It has been pay-as-you-go. This has been a disaster
waiting to happen, as retirees grow in number and live longer, and
active employment shrinks in districts such as Milwaukee.

For fiscal year 2011, retiree enrollment in the district health plan is
36.4% of the total. In addition to the costs of these retirees'
benefits, Milwaukee is, to its credit, belatedly starting to prefund the
benefits of future school retirees. In all, retiree health-insurance
contributions are estimated at 12.1% of salaries (of which 1.5% is
prefunded).

Overall, the school district's contributions to health insurance for
employees and retirees total about 50.9 cents on top of every dollar
paid in wages. Together with pension and Social Security contributions,
plus a few small items, one can see how the total cost of fringe
benefits reaches 74.2%.

What these numbers ultimately prove is the excessive power of collective
bargaining. The teachers' main pension plan is set by the state
legislature, but under the pressure of local bargaining, the employees'
contribution is often pushed onto the taxpayers. In addition, collective
bargaining led the Milwaukee public school district to add a
supplemental pension plan the employees' contribution (or lack thereof)
to the cost of health
insurance is also collectively bargained.

As the costs of pensions and insurance escalate, the governor's proposal
to restrict collective bargaining to salaries entirely reasonable.

Mr. Costrell is professor of education reform and economics at the
University of Arkansas.

From The Wall Street Journal, 25 February 2011, page A15.

Calling on all republicans who currently hold union jobs......time to do the
right thing and quit on principle.

Walk away don't ever look back...


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