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With contract negotiations in Chicago attracting national attention, this special edition of the Trendline takes a look at how the Windy City compares to the 50 largest districts in the country and other Illinois districts on some of the major points on the table, including teacher compensation and evaluation.

Background on Chicago

In 2012, Chicago teachers went on strike for more than a week over several issues including compensation, evaluation and recall rights. The strike ended when a three-year agreement was reached; that agreement expired on June 30, 2015. The district and the union have been in negotiations for a new contract for over a year.

At the end of January, Chicago Public Schools made a contract offer that the union labeled as "serious." The union leadership put the offer to a vote of their "Big Bargaining Team," a halfway step between the primary bargaining team and putting the tentative agreement to a full union vote. On February 1, the offer was unanimously rejected. That started the clock ticking on a process known as fact finding. If there is still no agreement after the fact finding process, CPS teachers may go on strike at the end of May. In the meantime, the district moved forward with millions in budget cuts and warned teachers that it would no longer pay a portion of their pension contributions starting as soon as March.

While there are many issues important to both sides (e.g., teacher evaluations and professional development), we think that compensation is likely to be the linchpin of any agreement since the district is struggling financially, recently borrowing $725 million to keep its doors open.

The district is looking for concessions, most notably an end to its practice of a pension "pick-up," whereby the district covers most of the contribution teachers are supposed to make to their retirement system. The union's stated priorities primarily focus on non-compensation issues and it cited a lack of trust in the district's ability to deliver on promises in the contract proposal and the failure of the district to address fiscal instability as the primary reasons for rejecting the recent offer.

Salary

The Teacher Contract Database shows that, compared to the other largest districts in the country, Chicago teachers are paid well throughout their careers. 

In 2014-2015, among the 40 largest school districts in the country with traditional salary schedules, teachers in Chicago (the dark green line in the graph above) had the fifth highest salary—adjusted for cost of living—for first-year teachers with a BA, behind four Texas districts (Northside, Cypress-Fairbanks, Fort Bendand Fort Worth). It also had the second highest maximum salary, behind only Gwinnett County (GA).[1]

The graph below highlights teacher salaries in Chicago and the other five largest districts in the country. You can view the interactive version and see salary information for all 40 districts here.

Of course, local context is important. It surely matters less to Chicago's teachers how their pay compares to teachers in New York and Los Angeles than how it compares to districts just a few miles away. We compared Chicago's salaries with those of several of the largest districts in Illinois (Elgin, Rockford, and Indian Prairie) and several Chicago suburbs using salaries as reported in the Illinois Board of Education's annual teacher salary study (get the data here). 

The salary schedule in Chicago (the dark green line) is more generous than the median salary schedule for all districts in the state of Illinois (the gray line) as reported by the Illinois State Board of Education. 

Although Chicago appears to be offering teachers significantly higher salaries than other Illinois districts, the picture changes when you consider how the Windy City compares to its suburbs. Its seemingly high salaries likely reflect the higher cost of living in the greater Chicago area. As you can see in the graph below, Chicago (the dark and light green lines) is competitive with a sample of its surrounding suburbs, with or without the pension pick-up. The district offers one of the top three highest salaries across the schedule at every major point of a teacher's career, except when a teacher reaches the highest scheduled salary, where Chicago falls out of the top five. 

View the interactive version of this graph here.

Pensions

It's worth noting that comparing salaries across districts in Illinois can be challenging due to the practice of pension pick-ups. In most retirement systems, both employees and employers contribute to the pension plan. In Chicago the required teacher contribution to the pension plan is nine percent of a teacher's salary. Currently, teachers contribute two percent of their salary and the district "picks-up" the remaining seven percent, in addition to making the required employer contribution. In the latest proposal which the union rejected, the district wanted to cut this pick-up.

Although not generally a common practice across the country, according to the Illinois Policy Institute, as of 2011, almost two-thirds of districts in Illinois pay some portion of teachers' required contributions. Our analysis of the 2014-2015 teacher salary data collected by the Illinois State Board of Education found that while just over one-third of Illinois districts do not report picking up any portion of teachers' pension contributions, just over one-third of Illinois districts pick up the entire pension contribution. 

Health Insurance

The final piece of compensation is health insurance. Currently, Chicago teachers pay anywhere between 1.3 and 2.8 percent of their base salary towards their health care plan. In 19 of the 50 largest districts in the country, the district pays 100 percent of the health insurance premium while the majority of districts (27 of the top 50) require teachers to pay some portion of the premium. 

Proposed Compensation Changes

The proposal that was rejected at the beginning of this month included changes to the salary scale, pension pick-up and health insurance. The district offered a salary increase of 8.75 percent over the next three school years, the largest increase coming in 2017-2018 at three percent. To add some context to that proposed increase, in 2014-2015, eight districts in the 50 largest across the country gave raises greater than three percent, with eight districts offering no raises and four districts reducing teacher salaries, according to NCTQ calculations. 

It may seem like the district's 8.75 percent phased-in salary increase over the next three years is a lot, but this highlights the importance of considering compensation issues as a whole in order to understand the full context of the proposed changes. The suggested raises would be significantly offset by the district's proposal to eliminate the seven percent pension pick-up and require teachers to contribute more to their health insurance. When the loss of the pension pick-up is considered equivalent to a seven percent salary decrease, the district offered teachers a net increase of 1.75 percent over the next three years.

Evaluation

While compensation issues have been and likely will remain the sticking point of negotiations between Chicago's district and teachers union, teacher evaluation has surfaced as another important topic at the bargaining table.

Currently, 10 percent of the evaluation for Chicago teachers who teach non-tested subjects is based on a school-wide value added score. In the rejected contract proposal, the district offered to eliminate this component entirely. In the 50 largest districts in the country, 10 use some school-wide component in evaluations for teachers in non-tested subjects. In Shelby County (TN), school-wide value added data counts for 35 percent of the evaluation, the largest portion in any of the largest districts. 

Another evaluation issue on the table is the number of times teachers are observed. Currently, Chicago teachers are observed four times per evaluation cycle (four times in one year for teachers with a previous evaluation rating of unsatisfactory or developing and four times over two years for teachers with either proficient or higher ratings). The plurality of the 50 largest districts in the country (44 percent) observes teachers only one or two times per year. The rejected proposal would have reduced the number of required observations per evaluation cycle from four to three. 

We'll be keeping a close eye on Chicago as negotiations continue. Given the apparent lack of trust on both sides of the table and some of the points that appear to be playing a key role such as charter schools and tax issues, agreement on compensation alone may not bring the two sides together.

For more details on Chicago's policies, visit the district's database page. For more information on the proposal and negotiations you can read the district's summary of the rejected proposal here and the union's summary here. 

[1] All salaries have been adjusted for cost of living using the Bureau of Economic Analysis' 2013 Regional Price Parities