Jay Greene’s article called the collective agreement between the Chicago teachers union and the city a ‘financial suicide pack’.  Why would they do something so stupid?  Premier Kathleen Wynne and the public sector unions of Ontario are doing exactly the same thing, along with city unions and councillors.  These unions don’t get it, and will be furious when they’re pensions take a beating.  I have zero sympathy for the whole bunch of them—they’ve demonstrated over and over that they don’t seem to give a tinker’s dam about the taxpayers pocketbooks and businesses in the private sector who are struggling to stay in the black.

The system, if you will, at present will only change when we have a catastrophic event (crash & burn).  There does not appear to be any logical way for the current arrangement to back up to the time when a non unionized public service, accepted security as the principal reward with below-average pay and modest pensions. Presently, the unionized public service group have wage parity if not superiority, except for the construction trade unions and superior pensions which for the most part generally do not exist in the private realm.

There is little evidence that public service management or their labour confreres have grasped the reality that we cannot keep repeating the same old and expect a new outcome. The political hypocrisy of many of labours leaders mirrors the same corruption which has crept into senior management in the private sector.  I would characterize this attitude as one of personal entitlement which becomes the model for membership to follow..

We will likely be waiting for he phoenix to rise from the ashes to find a workable, balanced solution.

The problem in Chicago seems to be that schools are funded by district taxes, and the Chicago district has a stagnant, perhaps even shrinking population.  https://www.google.ca/search?q=chicago+population

Toronto is growing by almost 10% a year.  If that miracle can be sustained forever, then we can afford amazing pensions - much bigger than today’s.  Each retiring teacher who started 30 years ago would be supported by a workforce that grew five times larger over his or her career.

But the rest of Ontario isn’t growing that fast, Toronto is also being drained for equalization payments to provinces that aren’t growing at all, and eventually the growth in Toronto will taper too. 

POSTED ON BEHALF OF DOUG

Detroit started decline 60 years ago after WW2 mismanagement of the auto industry. Removal of auto industry. People wanted smaller Japanese cars, more fuel economy, lower prices,

Pensions only become a problem when they have an unfunded liability. How does this happen, the teachers always pay their share through payroll deduction. but governments fill their share with IOUs they plan to pay later but often don’t.

The bankrupsy is primarily to open union contracts and pensions. If the city/state are successful nobody on Earth will want to be a firefighter, cop, nurse or teacher in Michigan or Detroit again.ever again. Result further decline.

Why do they get terrible teachers in Mississippi? Because they pay terrible wages.

Doug, you seem to be suggesting that filing for bankruptcy is a ploy to renegotiate lower pensions for psu’s.  One can’t file for bankruptcy under those circumstances.  Bankruptcy = no more money.  The burden of gold-plated pensions has largely driven cities (and soon Ontario) into bankruptcy.  Detroit has borrowed from Belgian, Swiss, and Irish banks.  These loans took place after Detroit began hemorrhaging residents (part of their tax base).  The banks were looking to make big bucks; the unions were looking for gold-plated salaries, benefits, and pensions; and councillors wanted to stay in office or get elected.  Greed all the way around.  Now the bottom’s fallen out.  As if Europe can shoulder any more debt.  I thought that bankers were a little more prudent, but I suppose, bottom line, greed blinds everyone the same way regardless of political stripe, and education/expertise.
My question, Doug:  if psu pensions, salaries and benefits are gutted, where are these employees going to go to find work?  I think they’ll stay right where they are, and who can blame them?  I just hope that because cities and provinces/states are broke, that accountability is restored as well.  For example, teachers who after taking the summer off plus five weeks during the school year (not counting statutory holidays) are in the classroom for 8.3 months.  Of this time they’re working they are taking a record 15/annum.  In eight months?!?  It’s costing hard-working taxpayers and business $2 billion a year in Ontario.  How out of touch are teachers with what the working world is really all about, and why are they thinking only of themselves?

Tom and others - Toronto is indeed experiencing a population spurt, but its the kind that is composed of adults, and adults with children.
http://theeconomicanalyst.com/content/slowing-population-growth-toronto-hits-headlines-implications-housing-demand

Chicago and Toronto are both experiencing slowing population growths. In a report, “LEARNING
What should be done with all the “extra” space in Toronto’s schools?
70,000 spaces in Toronto’s elementary schools are empty:
• The average utilization rate is 76% for elementary schools and 78% for high schools, which means that at least 1 in 5 school spaces is unfilled. In the 905 region, some boards are above 100% capacity.
Less than half of Toronto elementary school children are getting 20 minutes/day of physical activity during the school day (the provincial guideline):
• In recent research, not one student sustained moderate to vigorous physical activity for 20 minutes.
In 99% of Toronto elementary schools, newcomer students need support learning English…......”
http://www.thestar.com/news/gta/vitalsigns/2012/10/02/torontos_vital_signs_report_2012.html

A 2009 report on - DECLINING ENROLMENT WORKING GROUP
http://www.edu.gov.on.ca/eng/policyfunding/dewg.pdf

A 2012 P4E report on - Declining Enrolment/
School closings
http://www.peopleforeducation.ca/wp-content/uploads/2012/05/declining-enrolment-early-release-2012.pdf

Some do lived in the alternative realities, and the Toronto School Board District does as well. “Mr. Bolton’s comments come in the wake of a report, released last Thursday, by a provincial government-appointed team that said the TDSB still has work to do to bring down its costs and eliminate a $50-million structural deficit. The TDSB has perennially faced budget shortfalls, complicated by the fact it has faced steadily declining enrolment for more than a decade as most school boards have, due to a declining birth rate. Since 2001 the TDSB has lost 40,000 students, although it expects to see a small uptick in its elementary grades in the coming year. The TDSB made $27-million in budget cuts in June, following another $28-million in staffing cuts approved during the winter.”
http://news.nationalpost.com/2013/07/17/toronto-school-board-opens-beijing-office-in-attempt-to-lure-more-foreign-students/

Of course I could add more links to the parents forums and blogs, that has discussions in some lengths on the alternative realities that the public education system chooses to live in and often at the expense of the students and the taxpayers’ purse - the fortune cookies are predicting a crash and burn, before the inevitable phoenix arises from the ashes.

Correction: - Toronto is indeed experiencing a population spurt, but its the kind that is composed of adults, and adults with children.

Should read - - Toronto is indeed experiencing a population spurt, but its the kind that is composed of adults, and adults WITHOUT children.

It looks as if Chicago simply took a contribution holiday and let the pension plan develop a huge unfunded liability.  There is some discussion that the union didn’t object since the alternative was addressing how to make pensions more affordable. 

A contribution holiday is a double-whammy - storing up both deferred payments and the investment return that the pension fund generates.  That quickly becomes a death-spiral.

In Ontario, it could be said that we borrow money to make pension contributions; the teachers’ plan is almost fully funded, but the province has a huge debt.  It’s a smarter way to manage money, especially since the teachers fund earned almost 10% last year.

But we haven’t had that honest discussion about pension affordability either.  We just keep borrowing and kicking the can down the road.