kitchen table math, the sequel: LIFO in NYC

Monday, February 28, 2011


LIFO = last in, first out (last hired, first fired)

The Post has a story this morning about LIFO effects on teacher lay-offs:
The Bloomberg administration last night released a school-by-school list of where 4,675 planned teacher layoffs would occur under the "last in, first out" law, which requires that pink slips be handed out based on seniority rather than merit.

The breakdown shows the ax would disproportionately affect teachers in some of the city's poorest neighborhoods -- in The Bronx, Harlem and Brooklyn -- that have the greatest number of newer instructors.

One of every five teachers in central Harlem middle schools would disappear, as would one-sixth of elementary school teachers in Mott Haven/South Bronx.

Overall, the mayor's preliminary spending plan recommends eliminating more than 6,000 teaching jobs -- 4,665 through layoffs and the rest through attrition.

The layoffs would trigger a complicated domino effect, shifting teachers who have seniority rights into jobs vacated by those with less experience.


The impact would be felt all across the city, with 155 schools projected to lose at least 20 percent of their current teachers.

Of that number, 21 schools would have to say goodbye to 40 percent of the instructors there now. Nine schools would have to part with half their current teachers.

Even schools in well-to-do neighborhoods do not go unscathed. Nearly one out of seven teachers in Manhattan's District 2 - running from the Battery to the Upper East Side - would lose their jobs.

PS 41 in Greenwich Village would have to let go of nearly a quarter of the teaching staff there now.

And many of the hundreds of new small middle schools and high schools -- created to replace large failing schools -- would be severely disrupted, according to city Department of Education data.

The Columbia Secondary School in Harlem could lose 14 of its 20 teachers - or a whopping 70 percent.

Poor Nabes to bear brunt of LIFO cuts

This level of disruption can't possibly be good for students, and it's certainly not good for the 4,675 teachers who are going to lose their jobs.

My preference would be for everyone to take a wage freeze or, if necessary, a cut in compensation so that no one who's competent has to lose his or her job. Ed once took a 10% salary cut at UCLA when times were bad. We survived, and so did everyone else.

A couple of years ago, NYU instituted a practice of freezing raises for older, better-paid faculty while continuing to give raises to younger faculty.  Everyone seems to be surviving this, too.

I was talking to a retired teacher here in town about why the union consistently chooses lay-offs of young teachers over reduction in compensation for all teachers. She told me unions can't choose wage freezes or cuts because pensions are calculated on final compensation.

But of course that's true for college professors with 401(k)s, too. The amount you and your employer pay into the account is based on current salary.


Catherine Johnson said...

Obviously, I'm leaving out the fact that NYC has quite a few teachers the city would like to lay off or fire.

I'm guessing Bloomberg wouldn't be open to a union offer to save jobs via compensation cuts, but I don't know.

Independent George said...

She told me unions can't choose wage freezes or cuts because pensions are calculated on final compensation.

And that's why we shouldn't have pensions - or, at least, one reason. Laying off a younger worker who will be paying into the pension fund amounts to eating your seed corn; you protect the benefits of existing workers while reducing your ability to pay out those benefits. Unless, of course, taxpayers paying out the shortfall (which, in Illinois, we are constitutionally obligated to do). In that case it works out great for the teachers, even if the rest of us are screwed.

Of course, this sidesteps the fact that any defined-benefit plan is a ponzi scheme at heart, but that's a different argument for a different day.

Catherine Johnson said...

I've got to finally post Mark Roulo's great comment about the 'separation in time' issue of govt pensions.

Working with my friend & BOE member Robyne, who is expert in finance, I'm starting to understand some of the basic elements of accounting.

Pay-as-you-go is bad.

I know that now.

I'm actually attempting to get through an "Accounting for Dummies" book (well, I own the book...)

The idea that liabilities should be booked the minute they're accrued isn't something the general public understands.

I didn't.

Catherine Johnson said...

fyi: we actually have a law here in NY **forbidding** us from fully funding promised benefits!

We couldn't do it even if we wanted to.