Saturday, May 12, 2007

Teacher' Union Redux

The final installment of Ron French's series on the impending fiscal problems of the Michigan Teacher's Pension plan is in today's Detroit News. Once again, we see how Teacher's unions are featherbedding their positions as the expense of taxpayers and the children the purportedly support.

The lessons that can be imparted are several from this series:

  1. Actuaries are smart people. However, they have been lousy in terms of estimating life expectancies of retires and retirement costs of a group of people thirty years in the future. This not a criticism of their work (I took a lot of actuarial science courses in school - it is not easy stuff) but more so a reflection of the reality that we know crap about what will happen thirty years from now. The point is - defined benefit plans should be really called defined bankruptcy plans as they become unfundable due to unpredictable increases in life expectancies and new health care technologies.
  2. Anything involving the government will not be solved until it is too late. Because things like public employee pensions are an "inside baseball" issue - politicians don't really deal with it - rather they just capitulate to the feather bedders in the public sector unions and give them what they want. This is another example of why public sector employees should never have the right to join a union. In fact, if this is not another example of why government should not run a lot things that they could contract out to the private sector.
  3. The taxpayers and the kids ultimately get screwed. We already knew that all this increased education spending is not for education. Real education spending per pupil has in real terms increased several fold in the the last forty years with no improvement in student performance (actually student performance in the US has dropped during this period). This just reinforces the argument that all this spending "for the children" really goes to fat cat school administrators, corrupt teacher unions, white elephant "facilities", and now, as Ron French points out - a gold plated pension plan that is soaking up a huge portion of school budgets across the state.

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