In a nutshell: Why teachers' unions kill merit pay

Megan McArdle* explains:

There is a reason that unions kill merit pay... [they] negotiate ironclad contracts to cover dozens, hundreds, or thousands of workers. Once they take effect, those contracts are rarely renegotiated, and they apply to every single worker no matter what the situation. So unions are always going to be looking for the simplest, least subjective metrics by which to measure their members. Furthermore, they will be looking for metrics which are not under the control of the other side. The school board cannot change how many years you have in service, or whether or not you have a degree. But it can change the curriculum, or the tests.

. . .metrics will not only tend towards simplicity and ease of measurement; they will also tend to reward mediocrity. Again, this is not an accident of history. A collective bargaining unit run by a "majority rules" system is always going to look for a system that rewards the median or modal worker, not the best.

A merit pay system can work in one of two ways. It can benchmark teachers against the average, and reward the people who achieve the most improvement. Or it can set some minimum standard and give a bonus to any teacher who bests that standard. (You could set three tiers, or what have you, but the concept is basically the same).
. . .

But compare either system to what now exists in our nation's schools. Every single teacher can stay on for years unless they do something direly wrong. . . They have a system that spreads benefits absolutely evenly among all their members.

. . . And of course, over time, teacher's unions select for the sort of people who prefer this arrangement to competitive merit pay for one reason or another. ...

Unions are set up to minimize frictions and maximize benefits for the bottom 55%. That's how they work everywhere--in schools, and out. That's how they have to work. No amount of cajoling, no number of white papers, is going to change that.

Megan is a pleasure to read and listen to [type "McArdle" in the search box to see a list of her appearances on bloggingheads.tv] . She consistently delivers clear insights on all sorts of real-world economic issues. When challenged, she backs her opinions with facts, examples and solid reasoning.

If she were a mean person, she could skewer most of her discussion/debate partners on Bloggingheads.tv. Instead she listens carefully to others and rebuts with respect and a beaming smile. Her opponents learn a few things, lose the debate, and go away feeling happy about the experience.

Update: More on education from Megan: national curriculum and vouchers.