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Douglas County teachers discover the Agency Problem

By | June 18th, 2012

One of the three most contentious issues in the Douglas County open teacher negotiations has been that of the union’s full-time employees (FTEs), who work full-time for the union, but who remain on the district payroll. As with the matter of dues collection, on June 8, DCFT President Brenda Smith made the case for FTEs, and later made the same non-concession concession, the one where the union agrees not to include it in the contract, but makes a veiled threat to sue:

“If you take those FTE out of the contract, and no longer allow these employees once they take this job on – because I will probably not be union president forever, there will be someone who will follow after me, someone else who will be elected to this position – and when this happens, what you’re saying is that you’re going to remove these people can no longer be employees of the school district.  That they give up being an employee of the school district.  It will be challenging and tough to get people that are actually teachers in the school district to want to do this job.”

“And when that happens, what you will see is outside individuals that will actually be running our organization. And I can tell you that what I value about AFT, and what I value most about working for, and being a part of this organization, is that it’s very much a bottom-up. It’s very much all about teachers, and what we feel like needs to happen here in Douglas County. It’s not a top-down mandate from any organization anyplace else. It truly is about what we feel is best for teachers. We get to make the decisions here at the bargaining table.”

In other words, the union has discovered the agency problem. Every group who hires someone else to represent their interests runs into this: often the interests of the negotiators don’t align with the interests of the principals. For instance, if the negotiators are being paid by the hour, they may have little interest in reaching a deal. So the union’s discovery of this problem is more than a little ironic, given that separating the electorate from management, in order to separate the electorate from its money, has been teachers’ unions’ bread-and-butter (literally!) for decades now.

In this case, though, there’s both more and less than meets the eye. Union reps are on “special assignment” while they’re employed by the union. (Notice that Smith actually refers to “working for” the union.)  In Smith’s case, that special assignment has lasted five years. Five years of additional accrued PERA eligibility, and, since PERA promises more than it takes in, five years of additional PERA liability picked up by the taxpayers of Colorado. Know also that the union heads’ salaries are determined not by the district, but by the local and state unions that pick up their salaries. This means that the PERA liability is determined not by their value to the district as teachers, but by their value to the union as negotiators.

We understand that absent pension eligibility, working for the union becomes much less appealing.  Which is why, like a regulator who goes to work for an industry she formerly regulated, Smith and those who follow her should have their retirement picked up by the union.

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