Let me try to explain the argument regarding the strike with the Chicago Teachers Union using some financial terms. If teachers have a “risk-free” job (i.e. can’t be terminated) then there must be a discounted rate to offset that risk. It’s like investing, higher risk yields higher returns. You can put your money in the stock market, which we all know is volatile, or you could put your money in a Treasury Bond. The difference is peace of mind. For more peace of mind, you have to pay for that. The graph below, from the Washington Post, shows how payrolls have changed since the economic crisis. Construction pay has been hit the hardest while education/health have steadily increased over this time period.
Another question for me has to do with the incentive programs being suggested, are teachers risk-averse or risk-seekers? People often say that it takes a special kind of person to be a salesperson. Sales jobs are synonymous with huge incentives and typically are risk-seekers. These people are driven by challenges to “earn” their living and usually love their job for these exact programs. So the question isn’t do we want our teachers to be like salespeople, but do teachers even want these incentives?