Teachers Pay High Fees for Retirement Funds | Hacker News Reader

Teachers Pay High Fees for Retirement Funds

wsj.com

67 pointsJumpCrisscross108 comments

I don't see any reason an employer or union wouldn't offer Vanguard/Fidelity/Schwab for 401k/HSA with access to the < 0.05 ER index funds if they really were putting their employee or union members' interests first.

I assume they're probably getting some kickback or something from the arrangement of restricting the 401k/HSA member's funds to high fee investments.

Edit: At least for an HSA, one can transfer the funds out into a Fidelity HSA account immediately. With a 401k, you have to wait until you leave your employer, but with an HSA, just request a transfer of funds to your Fidelity HSA, which is free and you can invest in anything you like.

I don’t understand why 401k even exists. The money should go into an IRA controlled by the owner. The employer should have no say in this. The same should go for health insurance....

It exists to give large employers who can afford to pay for administering those benefits an advantage over smaller employers. Same for health insurance.

It's not so much an "advantage over smaller employers" as it is a "subsidy for large employers" or a "way to spend less money to offer the same benefits so profits are higher".

That is one and the same. The subsidy for large employers is not available to small employers, hence an advantage for large employers.

True, but you're implying it has something to do with competing. It's not that, it's just about spending less money so they get to keep more.

In addition probably also a subsidy for the financial industry.

Maybe this made sense in 1978. But we are now in an era of zero fee trades, index funds, and microscopic management fees.

I am alluding to the 401k contribution limit being $20k+ versus the IRA contribution limit being $6k. There is absolutely no reason why one should differ from the other, other than one benefits those who have employers that offer 401k.

In fact, couples where one spouse who works for an employer with a 401k and one who doesn't are actually punished by lowering the contribution limit for IRA to zero. Someone explain to me why that was put into law.

https://www.investopedia.com/401-k-vs-ira-contribution-limit...

It’s pretty crazy that employers have any power over things like health insurance or retirement savings and play by different rules. These should be completely disconnected from employment. The only thing employers should compete on is things like 401k matching.

My employer subsidizes my health insurance and contributes to my 401k and a pension. It's a nice perk and part of the reason why i work for them. It's a win-win

They can subsidize as much as they want. But they receive tax benefits that are not available to people whose employer doesn’t do this. In addition they choose health insurance and 401k providers for you. I am pretty sure their incentives and yours aren’t aligned so you may actually get a bad deal. It simply makes no sense.

I'm not trying to be dense, I don't understand why this doesn't make sense. My employer offers salary, insurance, bonus, perks etc. and others do the same. I look at my options and take the offer I value the most. What part of the contract doesn't make sense? Most contracts have two parties with different incentives

The part where because company A employs 5,000 people, and can segregate their employees into a healthier than average pool (since they're working, they usually are), they get access to lower cost health insurance to pay their employees with, and company B, a new startup trying to compete, has to pay higher insurance premiums on healthcare.gov because they don't have the established group of lives to create a separate insurance pool, and because they can't afford the overhead of administrative work involved with providing health insurance benefits.

It’s all good. But it doesn’t make sense that the employer can choose to get a tax benefit. Every employee/person should have this tax benefit available no matter what the employer does. Your employer still can subsidize this, no problem.

It makes the contract more confusing, and often you don't even have complete information. You get two offers for different amounts, both with insurance - which is the better offer? If the higher offer includes worse insurance it may be the worse offer, but it is really hard to figure this out. In fact in many cases they won't even tell you enough about their insurance plan until after you accept so you didn't compare well.

Even if we ignore the above, is the plan they offer right for you? If you don't have a doctor you can save a lot of money just taking an in-network doctor they assign to you - so long as they have enough doctors in network, and doctors are qualified it doesn't matter how many other doctors could see you. Or maybe you have one you like and are willing to pay extra for that. Both are reasonable choices for different people - but you don't get to choose. I'd personally take an extra $5/month in my pocket in exchange for a small in-network list of doctors (so long as it is large enough that I can get help when I need it), my wife is pickier and would pay an extra $10 to choose whatever doctors seems good at the moment - both are valid choices (I'm not sure what we would do if we actually had any choice in the matter: the conversation is only hypothetical now)

Employer based health insurance and what not makes it harder to compare job offers and increases your costs to switch employers.

If instead, your employer simply paid you the money they would have paid to subsidize these things, and you paid for the services you wanted, you could actually keep your services in case you changed jobs or lost your job or took time off or whatever. It would be pretty hard to setup an individual pension that behaved like an employer pension, but pensions are already on their way out.

Unfortunately the federal government subsidizes this behavior so I would need to spend more than what my employer does.

Yes, and the question is why should the federal government subsidize distorting the employment market in this fashion? Or at least, why should they continue to do so.

And even if it does. I don't really see the reason that I should be locked into the employers 401k and not be able to choose my own.

401ks should not exist. IRAs should support the same contribution limits, with funds deposited in the same way payroll is done. This would be extremely beneficial to everyone saving for retirement, as fees would be driven down due to the ability to shop your account around, and there is zero friction in opening an IRA compared to your employer needing to sponsor and support a 401k plan.

Support retiring 401k legislation. Call your representatives.

Edit: See jlmorton's correction below. Creation was indeed accidental. Leaving my comment unchanged.

When 401k-s originally started, it was considered ground-breaking in that it was a way for employers to use their purchasing power (or choosing power) to get lower cost management of funds. It was envisioned as a great thing for employees and employers.

But we all know that is now how new laws are created. A bunch of lobbyists from financial sector lobbied to create this new instrument, which in turn directs more money to them.

Any instrument where the employee doesn't get to control the management of the money is bad for the employee.

There is a similar situation with FSA (Flexible Spending Account). That is day light robbery. Employee has to guestimate how much medical expenses they have in the year. Estimate too little and you lose the tax savings. Estimate too much and the FSA management organization keeps the unspent money. What was originally deducted from your paycheck doesn't come back to you with a 10% additional penalty. No, the person loses 100%. FSA says the money goes to the employer to offset the management costs. This is like the real-estate sales person claiming the seller is paying them.

I agree about FSA. It’s stupid in every conceivable way. But don’t they roll over now? At least to some degree.

They added 2.5 months to be able to use it, if the employer wants employees to be able to. Still useless for the same reasons though.

https://www.irs.gov/newsroom/irs-plan-now-to-use-health-flex...

As far as I know it's Health Savings Account (HSA) in a high-deductible health insurance plan that rolls over, not a FSA.

No, your probably thinking of HSA's or the fact that you have something like 30 or 60 days into the new year to use the old one.

FSA is great if you plan to change employers, there is no clawback if you empty the account in January and change employers in February. I'm not sure why this was never considered, but it's one of the few places an employee can benefit.

There is absolutely no benefit of an FSA over an HSA, other than to pad the coffers of whoever gets the leftover FSA funds if the participant can't accurately forecast their spending. FSA's simply should not exist.

True, but they are either or and a High deductible plan is a disaster for many people.

Yes, I forgot about that. But generally, since the expected cost of one's healthcare remains the same regardless of what kind of insurance plan they choose, the difference in premiums for a high deductible and low deductible plan is just the present value of the expected additional costs the insurance company has to pay because of the low deductible.

In other words, you can pay more via a higher monthly premium now, and pay less when you pay for the healthcare. Or pay less for the premium now, and pay more when you pay for the healthcare. Otherwise, the insurance company wouldn't be in business for long.

The difference is who gets to keep the investment earnings from the savings kept until you need healthcare.

FSA gives you the entire year's contribution up front, HSA does not.

FSA’s blow my mind. They’re pushed on young people who don’t need it. The loss is NOT MADE CLEAR.

And it hurts because a lot of people’s level 2 understanding of personal finance is max out your tax advantaged savings accounts.

FSA’s should be illegal. The advantages they bring to some (large!) don’t justify the theft from others.

It exists as a historic accident. It was not originally intended as a retirement savings program, but simply a way to help a small number of rich people avoid tax on deferred income invested in the stock market.

Though the program has become widely popular, it's still very clearly a giveaway to the rich. Not only are the wealthy capable of saving a larger amount, we also allow their employers to contribute up to $56,000. Obviously, most employers are not going to contribute $56,000 to their employees retirement savings plan.

Up to 80% of the tax expenditure of 401k plans is captured by the top quintile of income earners. The plans amount to welfare for the wealthy, and indeed the government loses more revenue from these tax expenditures than it spends on many welfare programs like food stamps.

This is a very strange interpretation. Lost revenue relative to what? Not having it? Is the government losing revenue by not taxing the bottom 50% of income earners, too?

The tax code is structured this way to incentivize saving for retirement. Social security exists for the same reason. The government allows you to defer taxation in these structured vehicles so that you are better able to care for yourself in your old age, so that the government doesn't end up footing the bill.

These accounts are no more a "give away" to the rich than the progressive income tax schedule is a "give away" to the poor.

>These accounts are no more a "give away" to the rich than the progressive income tax schedule is a "give away" to the poor.

Since only the rich are employed by employers who offer the benefits of these accounts, it is effectively a give away to the rich. If it wasn't a give away restricted to a certain populace, then it would be de-linked from employment and available for everyone.

> Since only the rich are employed by employers who offer the benefits of these accounts

So, being an employee of a company that offers a 401k is the new definition of "rich"?

I was referring to the concept of employers being able to contribution $56k to an employee's 401k (which only happens if employee is already highly compensated), as opposed to IRAs being capped at $6k.

Lots of employers offer these. Only if your definition of "the rich" is extremely broad is it restricted to "the rich", first of all. Certainly many people making 60-80k have access to these accounts, and quite often some level of employer matching. I guess you could call that "rich" relative to some people, but it's not what I think of when I hear "the rich".

Secondly, nobody (well, maybe some people, but mostly nobody) describes the progressive tax schedule as a "give away" to the poor, despite it representing a much larger wealth transfer than these retirement accounts.

jlmorton was referring to the employer contribution limits of $56k, which are utilized, obviously, by rich companies.

>Since only the rich are employed by employers who offer the benefits of these accounts

Everyone and their brother has a 401k today. Even many entry level blue collar jobs have 401k plans.

Depending on future tax changes, of course, 401k participation of the wealthy may actually result in higher revenue for the government.

Yes, the current income tax is deferred, and there's the possibility that when it's realized, it will be in a lower tax bracket. For the wealthy, it may not end up being in a lower bracket. However, all of the gains, when distributed, will be taxed as ordinary income; if the money had been invested in an ordinary account, there would have been capital gains, which are taxed at a lower rate.

One important difference is that teachers tend to use 403b vs 401k. One difference the WSJ calls out is that the rules around 403b aren't as strict, and the employer (ie: the school) isn't required to act in the best interest of the teacher when offering the plan.

401k rules aren't strict enough either, otherwise making sure employees have access to the extremely low cost total market index funds would be required. When an employer or union offers access only to funds with expense ratios 20x+ the going rate, that is not in the best interest either.

>I assume they're probably getting some kickback or something from the arrangement of restricting the 401k/HSA member's funds to high fee investments.

"Liz Cannon, who heads the Indian River chapter of the Florida Education Association, urged union members to buy retirement investments from Valic Financial Advisors Inc. through a firm owned by the union. That way “we also make money,” she said in a November 2017 newsletter, through regular dividends."

It's stated clearly in the article that there functionally are.

Tip of the iceberg at that. I'm sure there's a few folks between the investment firm and related parties that have bought themselves a boat based on the massive haircut the teachers are taking.

The kick in the gut though is the WSJ article itself. To the naive reader, it makes it seem as if 1% fees are good. They're not. 1% is wildly un-competitive in today's environment.

> They're not. 1% is wildly un-competitive in today's environment.

Especially now that Fidelity offers zero expense radio funds.

https://www.fidelity.com/mutual-funds/investing-ideas/index-...

Last I checked most of Europe is expecting interest rates in the NEGATIVE. In the US interest rates are being chained to the floor at 2%.

So yes, 1% is beyond massive and the difference between 1% to 2% isn’t 1%.

1% fees not interest rates. They are different things. The 1% fee is they take 1% off the top every years. They might invest in good investments otherwise, but even the best investments cannot makeup for good investments and 0.15% fees where are common these days.

It's minor kickbacks and a lot of information asymmetry.

The big kickbacks come from the "benefits consulting" companies that "help" small to midsize businesses figure out what vehicles to use to offer benefits for their employees. (This sometimes includes health insurance but we're not talking about that) Their main source of income is commissions to their company for funneling their clients' employees money into the funds themselves. Unsurprisingly, the funds with higher fees pay higher commissions.

The kickbacks to the companies themselves take the form of offloading HR functions onto the "broker" aka benefits consultant. They will do things like print all the materials, give lunch and learns to the employees about the plans, fulfill all the regulatory functions, etc. They also tend to take the HR decision makers out to fancy lunches and things of that sort. So mostly the HR departments are being bribed to look the other way in order for their jobs being easier.

I've pointed out suboptimal fund offerings at multiple small companies and been ignored/rebuffed every time. Every large company I've worked for had really good fund offerings.

It's amazing how simple human laziness and willful ignorance leads to literally millions in wealth being siphoned off of hard working employees into the pockets of benefits consultants and mutual fund companies. The HR departments of many of these companies literally don't care.

>It's amazing how simple human laziness and willful ignorance leads to literally millions in wealth being siphoned off of hard working employees into the pockets of benefits consultants and mutual fund companies.

Surely the bosses at these employers, who are smart enough to be bosses in the first place, can recognize that they are getting taken for a ride for their own 401k investments just like the employees are. Therefore, the only reason I can come up with that makes sense is the somehow the bosses themselves are getting incentivized to choose suboptimal investment options for themselves.

The sales people selling the investments can be very charming and convincing that they are much better than other companies. Plus a lot of the low cost options are very hands off so you don't have someone on the low-fee side arguing or driving around doing pitches.

Most good ones do.

Unions are democratic institutions and members have the ability to drive changes to this type of thing. Often in many places local teachers unions affiliate with pools of unions or upstream affiliates to get better buying power. Sometimes issues like this are legacy things -- in the past many public school teachers had to use 403(b) plans, as they weren't eligible for or had issues with using 401k or 457 (more common for government) plans.

When my wife was a teacher, her union negotiated membership a "best of breed" 457 plan as a secondary retirement option (they have pensions) that picked investments from different investment firms based on price and performance, as well as negotiated reimbursements. Typically they would get 10-15% rebates from companies like Vanguard or T Rowe Price.

This was, however in a closed-shop environment, not a "right-to-work" state, and both the union and school districts had much better leverage due to the size of the pool.

The fact that you're reading a story about a union in Florida in WSJ is meaningful context. I'm sure they picked this one for a reason.

ER is important, but general account maintenance fees also count. I was quite surprised at how high Fidelity's are compared to Vanguard.

I was under the impression that there basically were no fees for for Fidelity and the other big brokerages:

https://www.fidelity.com/why-fidelity/pricing-fees

I do see that Fidelity charges $48 per year per account to employers that want to use an HSA though:

https://www.fidelity.com/bin-public/060_www_fidelity_com/doc...

I guess they might have different fees for consumer accounts vs employers, but I have a hard time imagining that they would be more expensive than any other option, given that their whole business seems to be driven by the desire to gain as many AUM as possible by lowering expenses.

Can we just stop the 401k nonsense and have IRA have the same rules as 401k ?

My wife works for the local school district, and when she started I helped her navigate the retirement plan options.

They actually have numerous 403b providers to choose from, including Vanguard, but they basically offer no guidance (probably fear of some sort of liability or fiduciary duty).

But of course they allow their providers to come to facilities and offer "retirement advising" meetings. Naturally, the most predatory providers are the ones that have sales people to send out to make field visits. What's worse is that it is very unclear that this is not a district/HR-sponsored event, but purely a sales meeting from a provider.

My wife, thinking she was doing the responsible and proactive thing, went to one of these meetings with Valic. She very nearly got hooked into their scam of expensive, high-fee, garbage annuity products within her 403b. When she brought the paperwork home I was dumbfounded with how utterly terrible the product is, and how lengthy and opaque the prospectuses are. By the way, "Valic" literally means Variable Annuity Life Insurance Company.

She was massively frustrated by the experience, especially on top of the stresses of being new to a job she nearly got suckered into an awful retirement plan, and the district does basically nothing to oversee that the providers are actually any good.

Fortunately we were able to bail on Valic and sign up with Vanguard, which is a great option. Unfortunately, one has to a) know what they are looking for, and b) go out of their way to find it and sign up.

This is one of those cases where "freedom of choice" devolves into "buyer beware". Having lots of options is not inherently a good thing when many of those options are hot garbage and information and guidance is not transparent.

This Frontline doc (2013) paints a nice picture.

https://www.pbs.org/wgbh/frontline/film/retirement-gamble/

Many pension funds are screwing their members with high fee mutual funds resulting in 2-3%+ haircuts on annual returns. And this does not include all the mystery fees on top of everything else. Imagine what the compounding effects on this is. And these funds are shitty compared to Vanguard index fund over time. It comes down to shady backroom deals, kickbacks and incentive based selling.

edit: added year of the doc.

12b-1 fees[1] are the biggest scam the mutual fund industry has going.

[1] https://www.fool.com/investing/general/2010/10/15/why-we-opp...

Is anything like that in Canada?

My RRSP returns are not impressive despite shooting for low cost options, including popular Vanguard funds...

Yes, I don’t know the regulatory framework that allows it off the top of my head but they’re often called “trailer fees” in Canada. Look in the fund prospectus for disclosures relating “shareholder service fees” and “embedded commissions”. If you work with an advisor ask whether they (the advisor) receive compensation from any of the funds they recommend.

It amazes me how inexpensive the bribes companies pay out are in comparison to the profit they make off of the deals generated by the bribes.

> The Nationwide subsidiary paid $4.58 million to the National Association of Counties in 2017, the latest available data. About 1.6 million county employees and retirees have participated in 457 plans for which Nationwide is the record keeper, said Brian Namey, a spokesman for the county association.

$4.58 million / 1.6 million employees = $3.03/employee

> At the International Association of Fire Fighters, about 100,000 of the 292,000 members are in a Nationwide retirement plan, according to union President Harold Schaitberger. He said the union’s for-profit subsidiary, called the International Association of Fire Fighters Financial Corp., earns $3.4 million a year for various product endorsements—$2.5 million of it from Nationwide—and sends the parent union $2.45 million to support programs that benefit firefighters.

$2.5 million / 100,000 employees = $25/employee

Nickel and dimed to death.

The person that first came into my classroom to offer to help me set up a 403B ends up being one of the most expensive 403Bs options I have per the website https://www.403bcompare.com/

And then on top of it all my school district employer even charges me a monthly fee of $3 just to send money to my 403B.

Edit: It's actually the 403B admin that is charging me the $3 a month.

Unions in CA are also why teachers can't get disability insurance. Have to go out for surgery? You get nothing.

If a union isn't democratically controlled by the workers it's not a proper union, and if it is, it is possible to make work for the majority of its employees, at the very least. So what's the full story you are missing here?

Union bosses have control over raises, promotions, and hours granted to members. They also have built-in powers of communication and messaging control (both publicly and within the union)

In corrupt unions, the bosses absolutely will use that power to punish employees seen as challenging their authority or a leadership change.

Saying "oh, they can vote them out" sounds great from the outside, but if you have a family, you're not going to start an insurrection if it means losing your job, healthcare, and getting blacklisted from being employed in other (union) shops.

This is a very wrong understanding over how unions work these days.

Union "bosses" don't control raises, promotions, or hours, and haven't for several decades. Union bosses simply don't have the power they used to have (and for some reason, are still portrayed as having in TV or movies). The Irishman, for example, is based on a decades-old perception of union bosses that was only ever true of the NY-based unions...decades ago.

"Superstore" on NBC is actually a pretty accurate portrayal of how unions work in real life: pretty mundane, and not all that different from being non-unionized.

I'm not saying this is universally true. There are a lot of decent unions.

But the longshoreman unions, for example, absolutely still work this way.

This didn't sound correct, so I polled my many teacher friends about it.

And it turns out you're not correct. The districts decide who gets disability insurance, not the unions. If the district doesn't offer disability, the teachers don't get disability unless their union chapter separately provides it or the teacher individually acquires a policy.

Many private companies also have high fee funds in their investment fund options and pensions. A lot of people running these things aren't always aware of all the options they could be taking because they only meet with sales people.

Unions are the reason that teachers have retirement funds in the first place. That doesn't excuse them from the ridiculously high fees, but don't throw out the baby with the bathwater.

I can't believe how much union busting is going on in these comments. People take for granted the little wins labor has gotten over the last century.

The union has done good, but they are taking more credit than they deserve for those wins. Many would have happened anyway because labor is a limited competitive resource (at times, for some jobs) and so if you want to get good people you need to treat them well even when times are bad.

Unions have done good. They have also done bad. Most people will only acknowledge one side of that.

My uncle died in a construction accident that would never have happened on a union site. So while there may be two sides, implying that the sides are similar is classic whataboutism.

> I can't believe how much union busting is going on in these comments.

I'm guessing a mix of: professional shills and marketing firms trying to build consensus by appealing to high earners (plenty of them on HN) + the concentration of knowledge worker types on HN, who, in many cases, went straight into tech and haven't had to deal with truly shitty work experiences.

I'm reminded of my brother's roommate at Carnegie Mellon who went straight into a (scholarship-funded) Master's program, then a FAANG immediately out of school musing about how easy it is to have insurance, a nice car, and "why can't they just figure it out?". Super nice guy, but also living in a different universe.

The title on HN apppears to have been altered to leave out the substantive part. The purported cause is unions.

" Teachers Pay High Fees for Retirement Funds. Unions Are Partly to Blame. "

It was changed because "partly to blame" is disingenuous and creates a bias right off the bat.

"Partly to blame" could be anything -- could be 5%, could be 50% responsible.

Sure, they're partly to blame, but greedy hedge funds could be 90% responsible and the Unions just sort of went along with them.

Unions are not perfect. But they are the only protection individual laborers have left against the unstoppable power of modern corporations. Don't ever fall for the endless slandering laid against them by capitalists.

Employees have the ability to switch jobs, whereas unions make it hard to join a different shop at the same seniority level as before. I would rather be able to switch jobs easily than have to follow union rules.

>Employees have the ability to switch jobs

Skilled employees, sure. But the vast majority of unskilled labor is completely at the whims of their employer without the protections afforded by unions. People fought and died for the right to create these organizations in the past, and we should be reticent to give that up just because the system isn't perfect.

This is FUD. There are seniority based unions, and there are merit based unions. Nothing about a union means you can't negotiate, have merit based promotion, etc.

Also, as someone in tech, I constantly hear people talking about downleveling when they change jobs, I hear people talking about unclear promotion criteria, etc.

This. Some of the highest paid individual contributors in the world are actors and professional athletes. They're represented by unions.

Aren't those industry wide unions whose main purpose is to set wage floors because there are so many people desperately trying to get into the industry that without them, employee conditions would be terrible for those just starting out? I don't think that is a problem for programmers and it is way different than a company specific union.

If you want to start an industry wide programmer union, by all means, start one and then try and get people to join it. I'd love to hear what benefits you think I would get by joining an industry wide programmer union.

Not a problem, yet...

Hollywood unions are not industry-wide. The unions have only negotiated with the major studios and some of the more prolific independent studios.

For example, Netflix hasn't (currently) entered into any agreements with the unions, though rumors are that Netflix will become sometime before the end of 2020.

1) Wage floors (this is a problem in some parts of our industry. Game development, for instance. Maybe in other tech related fields like sysadmins? I'm less familiar.)

2) Healthcare benefits

3) Negotiating better IP control. Side projects, open source, etc. are locked down at various companies. There was a front page story about this today.

4) Better treatment for oncall. I know folks who have had to work for 17 consecutive hours for an incident and got nothing.

5) Better treatment for crunch -- tech workers in games have this particularly bad, but it's not limited to just that industry.

6) More control over how the company outsources/contracts with workers

7) All sorts of other side benefits that could be collectively funded -- union libraries, training, networks, publications, resources for new professionals, discounts on union developed software, etc.

8) Parental leave, sick time, and other basic benefits

9) Ensure and oversee processes to protect people who end up on the public stage. If you believe cancel culture is a thing, maybe having a union rep on hand and an established process for managing firings would be in your best interest.

10) Forced arbitration is another thing I'd consider talking with a union about.

11) Having a union rep on hand for HR proceedings

> Nothing about a union means you can't negotiate, have merit based promotion, etc.

Yes there is. It is the fact that many unions do indeed do this.

For whatever reason, people will often democratically choose to have stupid rules, such as seniority rules.

The problem with a union is that if people democratically choose the dumb decision, then I am screwed. No thank you!

All unions are structurally designed to reward tenure. Current members of the union can vote but future members cannot, and current members have more seniority than future members, so union members will always vote to screw over the people who join the union after them.

This is FUD, and runs counter to what players' unions in professional sports have actually done...every single time they've negotiated in the past decade.

Have you never heard of rookie vs veteran contracts? Player unions are incredibly stacked in favor of senior players.

> All unions are structurally designed to reward tenure.

This is objectively false. I agree that some unions are structured this way. Maybe even most. But all is incorrect.

> There are seniority based unions, and there are merit based unions.

In my observation (going by reports from both my own teachers back in the day and from friends and family members who are teachers), teachers' unions are squarely in the former category. Tenured teachers get raises, competent teachers get pink slips.

So, there are no competent, tenured teachers?

And you aren't addressing what I'm saying. I acknowledge unions that promote/pay based on seniority. Those exist, 100%. They do not necessarily need to be the way a union operates.

While it may be in the best interest for a union to reward people for how long they've been a working member of the union, it isn't the only structure that exists.

> So, there are no competent, tenured teachers?

My middle/high school teachers certainly seemed to have an inverse relationship between tenure and effectiveness, with maybe two exceptions.

> They do not necessarily need to be the way a union operates.

And you aren't addressing what I'm saying: sure, meritocratic unions might exist, but given that this is about teachers' unions specifically, and given that (at least in my observation, as anecdotal and therefore flawed as it may be) teachers' unions seem to very rarely (if ever) be meritocratic, any mention of "oh but unions can be meritocratic" without even so much as providing an example seems off-topic and irrelevant.

Realistically, merit is much harder to measure than tenure. No surprise that tenure is consequently the more common metric by which teachers' unions measure the teachers thereof.

> I would rather be able to switch jobs easily than have to follow union rules

What do you think society is? We live in a giant union of citizens.

The point of the union is to protect labor from capital; and protect the rest of us from selfish attitudes.

The thing is that pretense is cheap - everyone and their dog has claimed some sort of grand pretense from the Aztec priests keeping the sun shining to every bandit, warlord, or mobster claiming "protection" when they rob people. Trusting anyone at their face value is being dangerously naive. Look at actual incentives and actions. You may find some organizations or individuals whose actions actually align with or are consistent with professed values in more than a post hoc rationalization but that is very much not the default.

Different unions work differently.

In Hollywood, for example, the unions are not an impediment to job-switching. In fact, they've enabled a sort of frictionless job switching that even tech is decades behind.

I have friends in Hollywood unions that have worked for multiple studios in the past month. No need to interview, or prove their chops. They just showed up for the job, worked, got paid, and moved on to the next shoot. And because of their union membership, they didn't have to worry about health insurance, or whether the checks would clear.

And I'm not even talking about SAG or the other guilds. I'm referring to the actual unions of all the people who work behind the camera, from the camera operators to the makeup artists.

Most teachers work for local/state governments not unstoppable modern corporations.

Unions are often rent-seeking monopolies. Labor organization is important, but that doesn't mean those claiming to organize labor are actually always doing what is in labor's best interests.

>Unions are often rent-seeking monopolies.

And so are corporations. Unions at least have the interest of employees as their central (espoused) tenant. There is and always has been a concerted effort between capital and the media to undermine that fact in the mind of the public. This is a huge contributing factor to the falling bargaining power of labor over the last 50 years. Don't fall for it.

Don't condescend to me. The only bargaining power is the ability to switch jobs easily -- something unions specifically fight against.

A seller gains bargaining power by increasing the number of buyers, and/or decreasing the number of sellers. Therefore, there is an increase in bargaining power by unionizing, since it reduces the number of sellers.

For an educated and specialized workforce, changing employers can result in huge wage gains, I know, I've benefited from this too. However, much of this is due to the present economy and who knows how long it will last.

For an average worker, the path to higher wages is through seniority and institutional knowledge that makes them more valuable. When they change jobs, they are often right back at the bottom, union or no union. They are also competing against young, fresh workers.

This morning I was thinking of Upton Sinclair's "The Jungle". If you've read it (and you should, it's a good novel) you know it's about worker rights and the story follows a guy who happens to work at a meat packing plant for awhile.

If you haven't read it, you've probably been taught it is about the bad practices of food producers in that era. Nevermind that part is ancillary to the central story.

Just pointing out that this warping of views to suit the wealthy has been going on a long time.

Note that the book is fiction. Reality was exaggerated to make is point.

I'm not arguing it is a bad book, but it isn't real.

My comment is related to how the thrust of the social commentary was almost wholly diverted by (speculation on my part) moneyed interests.

> Unions at least have the interest of employees as their central (espoused) tenant.

You know, if they actually lived that out, there would be a lot less union-bashing. It's not just a capitalist conspiracy to slander unions. It's also (and primarily) that, within my lifetime, unions have been better at protecting union bureaucracy than at protecting rank-and-file workers.

They still have a role to play. I just wish they actually did what they're supposed to do. The workers need someone who's trying to help them instead of to exploit them. And unions are trying to help workers not be exploited by companies... while exploiting workers themselves.

Biggest problem with unions in the US is they lack seats at the board, which allows management to treat them in a very adversarial manner with no formal means for pushback.

Unions Have Lost Most of Their Power, and Labor is at the Complete Mercy of Capital. Slander like this is partly to blame.

It's the myth of merit. Tech workers like to think they're highly-paid based on merit (and not simply because demand far exceeds supply), and also that they are the best at negotiating high salaries.

Of course, these same workers were getting completed shafted out of tens of billions in collective salary due to anti-poaching agreements that limited their bargaining power.

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