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Apr 27 2012

Only in Walker’s World…

…Could a “Cost-of-living” Increase Equal a Substantial Pay Cut

Chicken Little wasn’t kidding.  While Governor Walker’s Act 10 stripped public employees of the right to bargain over virtually all wages, benefits and working conditions, the remaining “token” item, which unions theoretically had the continuing right to bargain, was the “total base wages”.  Walker’s Act 10, however, limited said increase to no more than the consumer price index (CPI) over the prior 12 months (a higher amount would be subject to referendum).  Now that the Walker-appointed Wisconsin Employment Relations Commission (WERC) has issued Administrative Rules as to the implementation of Walker’s Act 10 calculation of “base wages, rather than providing a cost-of-living increase for teachers, it COULD ACTUALLY RESULT IN A SUBSTANTIAL DECREASE IN PAY. The following helps explain this apparently ludicrous rule.

For example, a Madison teacher with a Master’s degree is at Track 4, Level 16 (approximately 12 years of experience) of the current salary schedule is paid $54,985 per year.  Assuming a 3% increase in the CPI, this teacher would need a salary increase to $56,635 to maintain the same standard of living.  However, the new WERC rule defines the “base pay” not as the current salary ($54,985), but the salary this teacher would have received without the pay additive recognizing the achievement of additional educational credits (Walker’s Law would calculate this teacher’s CPI increase pay at Track 1 [BA], Level  16, or $51,497).  The WERC’s defined “Base Pay” for this teacher is $3,488 LESS than the teacher’s current pay.  Applying a 3% CPI increase to the Walker’s Law base of $51,497 yields a salary of only $53,042. Therefore, under the WERC’s new rules, this teacher’s “cost-of-living increase” could actually result in a pay cut of $1,943 per year.  Rather than a 3% increase in pay, Walker’s Law could produce a 3.5% decrease in pay. The greater the educational attainment (e.g. PhD at Track 8), the greater the potential cut.  One publicized example from Monticello School District shows a scenario where a teacher there could take a $14,000 pay cut.

The impact of the WERC Administrative Rule is beyond beliefCalculations illustrate that using this means to calculate wage increases for Madison’s teachers will actually produce only about 90% of the revenue to fund the wages now on the salary schedule - that’s right!  Chicken Little wasn’t kidding!  This does not necessarily mean that teachers will receive a pay cut after bargaining Walker’s “cost-of-living” increase.  School districts could, and should, continue to provide salary schedules which encourage teachers’ continued education and reward them for same.  Doing so will be to the advantage of each child enrolled in the district.  But, as with all other wages, hours and working conditions under Walker’s Law, such is entirely at the district’s discretionWalker’s Law even makes it a violation of law for school districts to negotiate over wages, other than the increase in the CPI.  Should the employer utilize such discretion, salaries would not have to be cut and increases could occur.  But, it’s a fallacy to think that Walker’s Law allows Unions to truly bargain cost-of-living increases for all of their members. While that may be true for employee groups without compensation plans connected to educational credits, such as MTI’s EA, SEE, SSA and USO units, under Walker’s WERC rules, it is certainly not the case for teachers.

JUST ONE MORE REASON TO RECALL WALKER!