Teachers Vs. Private Sector, The simple Mathematics

Discussion in 'Politics' started by Hello, Mar 31, 2011.

  1. Hello


    So lets say as a teacher I start out making the average pay of 50k/yr, plus my wage grows by 2% per year, which would barely keep up with inflation. (Most teachers are outperforming inflation in terms of pay raises)

    If I start out as a teacher making a base salary of 50k per year (which only includes base salary, and doesn’t even include the ridiculous benefits) that would put me at 82k per year after 25 years. The overwhelming majority of states give out 90% of the final salary after 25 years, and also give free health and dental benefits every single year. Plus the retirement salary adjusts for inflation every single year, which means that 25 years from now a teacher will be locked in at 73,800 dollars per year in terms of inflation adjusted dollars, with all their dental and health covered for life, after they retire.

    Now let us see what a person could get in the private sector if the person was to religiously invest 10k per year over the course of 25 years.

    Let us say we start at the same 50k salary i have listed above, which is above private sector average and this person has to pay 10k every single year into a retirement fund in order to plan to retire 25 years from now. I will give this person the benefit of the doubt and say that he was able to write off the entire 10k, and invest it tax free, but given the fact that IRA’s only allow 5k, the ability to invest 10k per year tax free is highly suspect.

    Now if a person in the private sector was to invest the full 10k/yr into something which yielded 7% compounding interest for life, he would end up with $676,764 after 25 years. If this guy was to take his 676,764 and invest it into risk free investments, and obtain 5% on his money in retirement(again im giving the benefit of the doubt) he will be left with 33,800 dollars per year, and he is also left stuck with the entire bill for medical/dental for himself and his family.

    So the guy in the private sector has to give up 20% of his income for life, in order to get HALF salary and NONEof the benefits the guy in the public sector is going to get. (and that is using numbers which are generous to the public sector.)Is there anyone on the left who can argue that these numbers are not out of whack?

    A teacher works 6 and a half hour days for 9 months of the year, the guy in the private sector works 8 hour days 11 months or more of the year.
    I know this is common knowledge to anyone with a brain but i want to put the argument to rest.

    In short here is a quick breakdown of the numbers i came up with which were more then generous to try to be fair to teachers.

    Teacher makes 20% more for life, and works 25% less, plus teacher gets full benefits for life with twice the retirement income.

    Private sector employee makes 20% less, works 25% more, and gets half the retirement income with no benefits.

    Can anyone possibly justify this sytem????
  2. Hello


    If it was up to me i would chop more than 50% of the military budget as well, so your point is a non sequitur.

  3. What teachers start at 50k?

    In OH the average starting salary is $33k.
    Source: http://teacherportal.com/salary/Ohio-teacher-salary

    And turns out in the entire US, there is not one state that starts their teachers at $50k as you stated.


    "The Starting Salary for a Teacher report above shows that the median starting salary for a teacher is around $34,000. It may take a few years for a teacher to build up enough experience to move very far beyond that starting salary."

    Source: http://www.payscale.com/research/US/All_K-12_Teachers/Salary/by_Years_Experience

    Do you have a source or just decided to start w/ some random number that made your point better? Did your in-depth analysis factor in that it takes a few years just to start to see a decent increase?

    It's funny when people attempt to make a point, but don't bother verifying their numbers first. Your entire post is a sham b/c you didn't even take the time to see if your first premise was correct. Your entire argument is based on something that does not exist.

    For example - when I read this, I thought there's no way that's accurate since my better half is a teacher, but before posting I went ahead and verified my thought/opinion first. Food for thought in your next attempt to make teachers look like these greedy money sucking leaches.

    Step 1 - make sure what your entire argument is based on is in fact correct and not your biased opinion.
  4. Hello


    I used the word "start" instead of "average" you got me there, it was a typo. If you think im cheating on numbers look at avrage teacher pay in places like New Jersey, or Californiua, which are well over my numbers. Tell me something Bil Nye, do you think the starting pay in the private sector is 50k? The numbers will end up with the same average, regardless of private sector or public sector, infact teachers numbers are higher, in terms of public vs. private sector. In fairness i used the same starting pay for the public sector, that i used for the private sector, even though we all know the private sector doesnt start at the same beginning salary, on top of the fact that the people in the private sector have zero job security.

    I gave government the benefit of the doubt throughout my entire piece, so dont give me your bullshit on fake numbers.

  5. By the way, The equivalent for to a teacher's pension is not investing in treasuries, but rather purchasing an annuity. An annuity should have a higher payout because part of what you receive each month is a return of principal. Your overall point, however, still stands. It is exactly why the government will need to continue to under-report inflation.

    The people who run the govt. agencies are not stupid, they rig the system so it will "work."
  6. Hello


    Again.... i used numbers i thought were pretty fair, based on reality..... Another advantage teachers have is that they could have used the same pay that the guy in the private sector is making and put it in special tax sheltered annuities (403b) plans, which are designed specifically for the public sector, in order to write off income and not pay any taxes, while investing money, people in the private sector cant invest in those either. So yes, there is 1 advantage in the private sector, via return on principal, but again i left plenty of room for that saying that the private sector guy could get a risk free 5%...... I would like to see anywhere these days that you could get a risk free 5% on capital, in the U.S. California Muni's are only yielding an average of 5% and thats with big default risk.

    You are right the government has it rigged perfectly, thats what bugged me about this guy before me who got his ass in a crack, and thought that i somehow rigged the numbers to burn the public sector, when infact i havent even opened the can of worms up yet on the dicks in the public sector.... If we wanted to start these numbers fairly i could have started with the private sector making 25% less wage to begin with as well, and made the numbers even more distorted, cause thats the reality today.