Monday, October 11, 2010

Why teachers oppose merit pay

The view from America. Nobel Prize-winning economist Gary Becker observes that:
Not surprisingly, teachers unions fight hardest against reforms that change the way teachers are paid, especially when they introduce incentives for teachers to perform more effectively.
In response, Bryan Caplan says:
I don’t doubt that unions tend to oppose merit pay, but the reasons are unclear.  Profit-maximizing monopolists still suffer financially if they cut quality; the same should hold for unionized workers.  Why not simply jack average wages 15% above the competitive level, and leave relative wages unchanged?
Or to put the puzzle another way: Once you've secured a raise for all the workers in your union, why prevent employers from offering additional compensation for exceptionally good workers?
To which Tyler Cowen of Marginal Revolution replies:
One simple model is to invoke the median voter as either ruling the union or constraining it.  The implication is that most union members fear they will lose from greater accountability, even if the total size of the pie goes up.
Here in Cambridge working parents – which is pretty much all of us – are thinking of teachers this week, because on Thursday our children’s primary school closes for the day at 12.30 p.m. so the teachers can have a paid union meeting. I suppose they have their union meeting at that time because, as so many of them are parents themselves, it would be really inconvenient for them to have it after work. 

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