By John Sullivan

Most managers would say that responsibility for their employees causes them a great deal of stress. Most have had to lay off one of their people, given them unfavorable job review, had to fire them, seen them hurt on the job, suffered with them when they lost a loved one, lost their retirement money or pension, or harmed in any of the ways that a person can be harmed, particularly if it is in an area that is the manager's responsibility. Teachers have no employees.

We can take it for granted that everyone likes to make more money, especially in the face of inflation. As a rule, people need a 3% raise every year just to break even. Over the past twenty years, real wages have been flat so, on average, the private sector has received this. However, with the severe concentration of income in the top 2% of the population, it should be safe to say that the "average person" has seen his real wages decline.

Further, increases are often determined by factors outside of his control. If his company does poorly, if the economy does poorly, if health insurance costs rise, if his performance suffers from causes that he can't control, etc, his salary may actually decrease.

This would not be a stressor for teachers. They get automatic raises in excess of inflation that are unaffected by any economic factors. They can also get fixed raises if they get additional education. For example, a master's degree might get them a 15% raise and a corresponding raise in their pension. I have never heard of anyone in the private sector receiving a raise just for getting their master's degree.

Retirement concerns are a huge stressor in the private sector. Defined contribution plans are subject to market forces and the contributions made by their employers are optional. The company may make a matching contribution to some extent when times are good and stop contributions when they are in difficulty. Contributions in the private sector are minimal as compared to the contributions made to teacher's retirement plans by the taxpayers. Pensions in the private sector are becoming rare but are in force for all teachers.

Private pensions are somewhat determined by market returns and may be reduced or terminated at any time. Pensions, even in retirement, may be reduced if the company goes bankrupt. For example, consider a pilot who negotiated increased pension benefits in lieu of pay and retired with a $100,000 per year pension. His company goes bankrupt and he only receives the portion of his pension that is insured by the PBGC. His pension is reduced to $35,000 per year even though he is retired. Teacher's pensions are guaranteed by the Illinois Constitution and they must be paid before the state can spend a cent on anything else. Teacher's pensions are based on a high guaranteed investment return. Any shortfall is paid by the taxpayers.

Private pensions are subject to inflation risk. A $3000/month pension will only have $1000/month in buying power in 30 years at only 3%/year inflation. Teacher's pensions have an automatic 3% increase every year.

Teachers receive about 80% of their pay in pension at age 60 if they have sufficient years of service. This works out to about a 50% pension and a 30% substitute for Social Security. However, Social Security is paid for by its participants. The 30% substitute is not. No, I don't think that retirement concerns are a stressor at all for teachers.

As stated, teachers can retire at age 60 with a full pension. This should not cause stress.

Job relocation is a stressor for those in the private sector. The work location may move or the work location may be closed and the employee may either move or lose his job. This is often a tough choice because the spouse may have a job they would have to quit if they relocate. Children are uprooted from their school. Children do not like to lose their friends. The family often would be moving away from their extended family. They may lose money on their house. Schools don't relocate, so this would not be a stressor for teachers.

Increased regulatory matters and paperwork is a stressor for teachers, as it is with virtually everyone else.

Up next: Part 3.

John Sullivan has an MBA from NIU and has 20 years of management experience supervising both union and non-union labor. He currently resides in Palatine, Illinois.