Percentage Increases And Inequality, With Seattle Schools Example
September 2, 2018
by William P. Meyers

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Seattle Schools Example of % Increases Multiplying Inequality

In Seattle today parents and teachers are happy. Public School teachers will receive a 10.5% raise for the coming school year. In return they will not strike. Parents do not have to make alternative plans to care for their kids. School starts Wednesday September 5.

I believe this actually is a good example of how not to give pay raises to employees, public or private. It is the traditional way, and so the unconscious consider it fair. But raise all workers the same % and the result is widening inequality. To see that, all you have to do is a little math.

Let's use the Seattle Teachers agreement as an example.

When pleading for public support the teachers emphasize that Seattle has become expensive to live in, and the beginning salary for teachers last year was $50,604. Never mind that many Seattle citizens must live on $15 per hour, or about $30,000 per year if they work full time.

At the top of the scale teachers made $100,763 per year [plus healthcare, pension and other benefits]. [Per Seattle Times Teacher contract ups pay by 10.5%]. With a 10.5% raise they will get $111,343.

At the bottom of the scale teachers made $50,604. With the raise they will get $55,917.

So the highest paid teachers will get a $10,580 raise. The lowest paid will get a $5,313 raise. The gap between the highest paid teachers and the lowest paid will increase by $5,267 per year.

Sometimes a more vivid example shows where a small effect can lead over time. Consider a $1 billion per year CEO, a $1 million per year small business owner, and a $30,000 per year person who gets the same whichever boss she works for. In all fairness, a modest 3% raise is announced for all. Fair, right?

The CEO gets his 3%: $30 million. The small boss gets his share: $30,000. And the bottom workers each get raises of $900 per year. Don't spend it all in one place.

When I was on the school board in Point Arena, California we tried to come up with a fix. The school board had no control over school income, which was set by state law. We had a problem because it was hard to attract good new teachers, our starting teacher rate was so low (I think something like $25,000 per year). Meanwhile the oldest (longest serving) teachers were making $65,000 per year, which was a top wage in our rural community. Our Superintendent, a former teacher and principle, suggested raising the rate for new teachers much more than the rate for the highest page teachers.

The teacher's union opposition to this idea did not surprise me; I was a former union organizer. For way too many union members, solidarity only goes so far. The union opposed the plan, because the union mainly consisted of teachers who were making from mid-range to the top salaries. Eventually we did get decent starting salaries for teachers, without having to raise top salaries the same percentage amount, which was something like 40%. But it did cost the district. Our budget was stressed even more than usual, non-salary needs of the district suffered, and when the 2008 recession came, more teachers had to be laid off than would have been necessary had the teachers been more reasonable.

Because of the complexities of funding schools in Washington state, I suspect that the budget for the 2019 school year is already headed for trouble. But imagine that is not a problem, that there really was money for an across-the-board 10.5% raise. A simple way to raise salaries that sounds fair is to give everyone an equal dollar raise. So take the median salary, $75,684. 10.5% of that is $7947.

$7947 on top of the beginning salary comes to $58,550. Considering how many of the parents of the children you will be teaching make around $30,000 per year, that does not seem like anything to whine about.

Hope you enjoyed your 3 month summer vacations, teachers and children.