QEO Takes Money Out of Your Pocket

What kind of salaries — or retirement benefits — will Wisconsin teachers have in 10 years? Under the state's Qualified Economic Offer law, the scenario is grim.

To get an idea, let's take a look at how the QEO affects long-range salaries and benefits. Under the QEO, the average of the six benchmarks increased just 1.54% in 1995-96. In other words, 1.54% was a common raise.

If we assume the QEO had been in effect over the last 10 years and the typical teacher's raise was 1.54% each year, what would the effect be on today's teacher salaries? In a word, devastating.

Under that scenario, a teacher working at the MA maximum step today would be paid $33,782. That compares to the actual statewide average of $43,871 for that same teacher. That is a difference of $10,089. But that only begins to tell the story.

As illustrated in the linked chart, teachers would have lost considerable money to the QEO every year. The loss compounds from year to year. For example, in 1986-87, a teacher at the MA maximum would have lost $1,320 in salary. The following year, he or she would have lost an additional $2,581, and the year after that, $3,770.

Over the last 10 years, a teacher at the MA maximum would have suffered a cumulative loss in earnings of $61,342. For teachers at the "schedule maximum" step, the loss would have been $69,711.

And even that doesn't tell the whole story.

Since retirement benefits are based on the average of a person's three highest annual salaries, the QEO causes large ongoing losses throughout a teacher's retirement years, as indicated in this linked chart. If the QEO had been in effect for the last 10 years, a teacher at the MA maximum benchmark on the salary schedule would have a final three-year average salary of $33,272. That is $9,860 less than the current three-year average for the MA maximum.

If the QEO had been in effect for the last 10 years, a teacher who has 30 years of service would receive a monthly annuity of $1,331 instead of the current $1,725. That's a loss of $394 per month, or $4,728 per year. Over 20 years, the teacher would lose $94,560 to the QEO, in retirement benefits alone.

"The QEO is undermining the basic ability of Wisconsin teachers to earn a decent living and plan for a comfortable retirement," said WEAC President Terry Craney. "If we allow it to continue, it will devastate the teaching profession."

Posted January 30, 1997