Chicago teachers strike

The current teachers strike in Chicago is illustrative of the problem that cities and states across the country face and that involves the payment for public employee’s pensions and health care or what are called legacy benefits. It is the same problem that brought down General Motors and is breaking municipalities and counties. They all start with sweetheart deals arranged by people who were put in office to negotiate with those that put them in office. It is why FDR said public unions should not be permitted and they were not until the late 50’s. Since that time the public sector unions figured out that money for increased salaries was hard to come by but getting legacy benefits was easy. When the teachers union figured out that they could use their vote to put into office people who were favorable to their positions, they were on their way. Over the past 30 years legacy benefits were increased, most of the time by sacrificing salary increases and today the payments for these funds are underfunded. Most of the cost of running a school district is not in salaries or buildings but in pension and health care cost. The past couple of years Chicago has exacerbated the problem by covering current expenses by cutting back contributions to the teacher’s pension fund. This merely postpones the debt, similar to the federal governments, kicking the can down the road. It is not just the teacher’s fund that is in trouble as city, state and county employees face the same situation. This is not the fault of the employees since they were legally getting the best deal they could get. It is the fault of the system that allows people to vote into office those with whom they will later negotiate with and this goes back to FDR’s concern about public unions. He knew this would eventually happen.