Thursday, May 19, 2011

MarketWatch, May 17, 2011, Tuesday

MarketWatch

May 17, 2011, Tuesday

MarketWatch

Companies tie more of workers’ pay to performance
By Ruth Mantell, MarketWatch

WASHINGTON (MarketWatch) — Companies increasingly are connecting pay to employees’ performance, in part as a strategy for growing their business in uncertain economic times

Labor costs generally are a large portion of a company’s spending. Continued emphasis on pay gains that vary based on employees’ performance reflects companies’ efforts to control costs and focus on spending for results, according to human resources consultancy Aon Hewitt.

“If you give a salary increase, it’s a fixed cost for life, whereas if you give someone a bonus it’s a cash payment for 12 months,” said Ken Abosch, compensation practice leader at Aon Hewitt. Performance-based payments “are very effective at getting employes to shape and change their behavior.”

Budgeting for performance-based pay has little risk for employers, he said. “It doesn’t mean they are going to spent it. Because it’s a bonus, it will only be spent if performance warrants it,” Abosch said.

Abosch said he expects employers’ spending on variable pay for certain workers in 2012 to be 11.8% or 11.9% of total salaries, compared with 11.8% this year. The record high of 12% was reached in 2009, and 11.8% is the second highest rate since data tracking began in 1976. He noted that gains in variable pay do not mean that base pay will be cut.

Some workers prefer riskier pay models

While an employer might see variable or performance-based pay as a flexible and fair arrangement, workers may view it instead as less-than-reliable. But that’s not a problem for everyone.

While shifting pay models may worry some employees, others appear eager to accept the risk, said Kevin Hallock, director of the Institute for Compensation Studies at Cornell University. In a study he co-authored in 2009, some workers chose almost all base pay, while others wanted almost all stock options.

“Younger employees, more experienced employees, higher paid employees, and male employees are more likely to allocate a larger fraction of their total compensation to at-risk alternatives,” according to the paper.

Adopting more variability into the compensation structure, such as increasing the proportion of a worker’s overall compensation that is bonuses and stock option, can help companies control costs during uncertain economic times, Hallock said.

When times are tougher, companies can cut the variable component of a worker’s compensation. “It’s a buffer for firms,” Hallock said.

But moving towards greater compensation variability is more attractive to firms than some workers. “In many circumstances,” Hallock said, “it’s easier for firms to deal with [financial] fluctuations than individuals. Workers don’t want fluctuations in their income. But then again, neither do firms.”

Some want stability

Unfortunately for workers, the employment environment currently doesn’t give workers much leverage to ask for a raise that, say, handily outpaces inflation. In the meantime, many workers prize stability.

With the tough economic times, workers have become more risk-averse, Hallock said.

“Workers are interested in a more stable job with lower total compensation than a riskier job with higher compensation,” Hallock said. “Everybody is a little more worried about risk than they were in the summer of 2008.”

Economist Larry Katz of Harvard University said that while there will be more worker demand for security, workers will have less trust that a single firm can offer a secure traditional pension and future benefits.

“Even public-sector workers now fear for their pensions and job security,” Katz said.

But not all workers feel that way, Katz said.

“Many young workers remain highly confident about their own talents and abilities to help a firm,” Katz said. “Such workers are more willing to trade off some base pay for performance pay and stock options that depend on their own or their firm’s performance.”

What keeps workers happy

Workers differ on other aspects of job satisfaction, too, according to data from 2010 from the Society for Human Resource Management.

For example, a higher percentage of employees between 31- and 45-years old than those between 46 and 64 said career advancement opportunities were very important aspects of job satisfaction. And a greater proportion of women than men said both career development opportunities and benefits are very important.

Overall, job security and benefits were the top aspects of employee job satisfaction from 2008 through 2010. In 2010, while 63% of employees cited job security as very important, 53% cited compensation/pay, according to SHRM.

A compensation-related issue of particular importance to women is workplace flexibility — the ability of workers to set their own hours and location of work. According to SHRM, flexibility to balance life and work issues is “very important” to 55% of women, compared with 38% of men. Overall, flexibility was very important to 46% of employees in 2010.

However, less than one-third of full-time workers said they have flexible hours, compared with 39% of part-time workers, according to a 2010 report from the Council of Economic Advisers. Also, less-skilled workers have less scheduling flexibility than highly-skilled workers. Read CEA report.

A study in April by the Business and Professional Women’s Foundation finds that Gen Y women — those born between 1978 and 1994 — want to be evaluated based on their production rather than the hours they’re at their desk.

“These sentiments are not unique to Gen Y. More and more workers are questioning the traditional 9-5 workplace ritual,” according to the report.

“Gen Y women want to be evaluated based on their results,” said Kara Nichols Barrett, who worked on the report. “There’s this larger question of if there is another way that work can be done.”

AOL Jobs, May 16, 2011, Monday

AOL Jobs

May 16, 2011, Monday

AOL Jobs

Canada's Economic Miracle: How Our Northern Neighbor Avoided Economic Calamity

Whether it's the depressed housing market, high employment or breathtakingly high national debt, the U.S. economy has its share of woes these days. Look north, however, and you'll see a very different scenario.

Though Canada and the United States are often viewed as very similar, our bigger, chillier neighbor has better weathered the recent economic storm, which brought banks, auto companies and other American businesses to their knees when the financial crisis struck nearly three years ago.

Not only has it outshined the U.S., says Alex Colvin, professor of labor relations and conflict resolution at Cornell University's ILR School, but Canada has come through the recession better overall than most other Western economies.

That's been a boon for Canadian workers. Whereas the U.S. unemployment rate rose two ticks to 9 percent in April, Canada's fell to 7.6 percent. Moreover, Canadians enjoy less income inequality, meaning there's less disparity between rich and poor.

Canada also has stronger employment and union regulations, and a greater percentage of Canadians are represented by collective bargaining agreements, offering them greater job protection and benefits. Unionization in Canada is about 30 percent compared to 12 percent for Americans.

Canada's quick rebound is the result of a combination of factors, Colvin says. First, Canada's economy differs from the U.S. in that Canada's economy is much more "resource driven," he says, noting, for example, that oil is a major export -- unlike the U.S., which imports far more oil than it produces.

Also, government regulation has helped to smooth out many bumps in the Canadian economy, Colvin says. Stricter banking rules, compared to the U.S., for the example, meant there was no mortgage crisis in Canada. "It's a much more concentrated and regulated banking industry," he says, which makes it "much more stable."

Further, Canada hasn't in any sense experienced a housing decline -- unlike the U.S., where housing markets across the country still reel from the bursting of the mortgage bubble nearly three years ago.

"There's been no housing crisis [in Canada]," says Jeffrey Ayres, professor of political science at Saint Michael's College in Colchester, Vt. Though the market has slowed, he says, there has been no market collapse.

By contrast, home prices in some U.S. cities, such as Atlanta, Cleveland and Las Vegas, have fallen below 2000 levels, according the S&P/Case-Shiller Home Price Index for February, the most recent available.

Though current Prime Minister Stephen Harper and his Conservative government have benefited from Canada's stellar economic performance (elections last week handed Conservatives a majority in Canada's parliament), the country's ability to recover quickly was largely the product of policies put in place by Liberal Party rule.

Ayres gives much credit to the government of former Prime Minister Jean Chrétien. During his term, the Liberal leader strongly opposed deregulating Canada's banking system. That has meant that Canadian consumers have had scant access to unregulated financial products, putting them at far less risk to predatory lenders.

What's more, Canada's strict bank regulations, and lack of both 30-year mortgages and mortgage-interest tax deductions, also benefit consumers, since Canadians are less likely to borrow and take on more debt.

Canada also has experienced much more modest deficits. Unlike the U.S., where the national debt equals 10 to 11 percent of its Gross Domestic Product, Canada's share is much smaller -- about 2 to 3 percent. And, unlike many U.S. states, Canada's provinces have run relatively small deficits, putting less pressure on provincial coffers and the need to lay off state workers.

According to the U.S. Department of Labor, the number of workers employed by state governments fell 8 percent in April, compared to March, while local governments cut payrolls by 14 percent.

Canada's economic prowess wasn't always evident, however. Twenty-two years ago, an editorial titled "North, to Argentina," appeared in The Wall Street Journal, warning that Canada's debt, along with other failed policies, threatened its economic prosperity.

Since that time, however, Canada, under the leadership of Liberal leaders such as Chrétien and, more recently, Paul Martin, have put the country on a path to prosperity.

Further differentiating Canadians from their southern neighbors is their view on taxes. Canadians may complain about being taxed, but they also realize that those tax dollars help pay for a universal health-care system that most are proud of and helps them to have one of the longest life-expectancy rates on the planet.

PR-USA.net, May 13, 2011, Friday

PR-USA.net

May 13, 2011, Friday

PR-USA.net

Friedman Schuman Augments Litigation Practice

Friedman Schuman, PC is strengthening its litigation practice with the addition of shareholder Michael Yanoff and associate Andrew Brown.

"We are extremely pleased to welcome Michael and Andrew to the firm," said Robert H. Nemeroff, chairperson of the firm's Litigation Practice. "Their experience and expertise is a great addition to our thriving litigation practice."

"Friedman Schuman has some of Delaware Valley's leading attorneys in the areas of personal injury and commercial litigation, corporate, real estate, tax, estate planning, bankruptcy, and municipal law. The addition of such high-quality lawyers further enhances our reputation for litigation excellence," added Nemeroff.

Yanoff is an accomplished and sophisticated litigator with over 37 years of experience representing clients in a variety of commercial and criminal litigation matters. He has significant federal and state courtroom experience, and has tried a myriad of jury and bench trials, and appeals throughout Pennsylvania, including Montgomery, Philadelphia, Bucks, Chester, Delaware and Lehigh Counties.

Yanoff also has extensive expertise handling products liability, personal injury and medical malpractice litigation, having secured a number of multi-million dollar verdicts and arbitration awards on behalf of injured clients. Yanoff also successfully represents developers of residential and commercial properties, including multi-unit home developments, shopping centers and office complexes, in land development and zoning matters.

"Attorneys at Friedman Schuman share my commitment to professional excellence and client service," said Yanoff. "I am excited about the opportunity to work with such a well-respected and collegial firm."

Brown has experience representing public and private companies as well as municipalities in a variety of litigation and employment matters. By joining Friedman Schuman, Brown will further diversify his litigation experience. Brown earned his law degree from Columbia Law School, and holds a B.S. from Cornell University in Industrial and Labor Relations.

About Friedman Schuman

Friedman Schuman is a full-service regional firm, headquartered in Jenkintown, PA. We have been proudly servicing clients for more than 20 years. For additional information, please visit Friedman Schuman's website at www.fsalaw.com.

Inside Higher Ed, May 11, 2011, Wednesday

Inside Higher Ed

May 11, 2011, Wednesday

Inside Higher Ed

Examining the AAU Gatekeepers

When the Association of American Universities voted in April to strip the University of Nebraska at Lincoln of its membership, it was the first time in the organization’s 111-year history that members had so blatantly turned on one of their own, an event widely described as “unprecedented.” The question now is whether it will be repeated.

The vote to kick out Nebraska, and to nudge out Syracuse University, which chose to leave the AAU, followed a quiet rethinking of the organization’s membership: it no longer comes with a lifetime guarantee.

For the 61 remaining members, especially those who superficially resemble Nebraska or Syracuse, this might be a reason to look over their shoulders. Officials at many such universities say they are confident that they perform well in the metrics AAU uses to assess candidates as well as evaluate members and, increasingly, determine whether they will retain their place in the group. Still, most are also taking steps to shore up their research performance, often through strategic plans that were already in place before the membership vote last month.(Note: This paragraph has been changed to correctly reflect the number of universities in the AAU.)

At the same time, the departures have rekindled debate about the AAU’s ranking methodology and whether membership in the elite group has been given too much weight.

“Universities are prestige-maximizing entities,” said Ronald Ehrenberg, a professor of labor relations and economics at Cornell University who has written extensively on the role of higher education. “But I think you sort of have to ask: At what price prestige?”

The AAU evaluates its members based on five major criteria: research expenditures normalized by number of faculty, National Academy members, the National Research Council faculty quality indicators, a selection of faculty honors, and scholarly citations.

By those markings, Nebraska had been on shaky ground within the AAU for more than a decade. The medical school for the University of Nebraska system is not affiliated with the flagship campus in Lincoln, meaning that research dollars from the National Institutes of Health do not count in its overall expenditures. The university’s land-grant mission means it conducts a significant amount of agricultural research -- federal funding for which is given much less weight in the association's rankings.

Should the AAU continue to cull its members, universities with similar profiles might be considered the most vulnerable, but the shock waves from Nebraska’s ouster and Syracuse’s decision to leave extend beyond the few members that look like them. “For all of the universities in AAU that are not at the very top, it raises the question of what will eventually be their vulnerability,” University of Kansas Chancellor Bernadette Gray-Little said.

Too Big to Succeed?

In the days following Nebraska’s ouster, Chancellor Harvey Perlman argued that the vote was part of a larger push within AAU to make the organization smaller and more elite. Though the association’s membership remains diverse, including both public institutions and wealthy private universities of varying sizes, it is unclear whether the association will reach out to replace the two departing members.

A bigger membership means more clout on Capitol Hill, presuming that institutions come from a wide range of states. (More than one observer noted that in dumping Nebraska, the AAU might have lost the support of 2 of 100 U.S. senators.) But it could also get unwieldy. Of the national higher education organizations, AAU is among the smallest, which some members say is one of its strengths.

As the number of universities focusing on research has expanded since the 1970s, with research paid for by the National Institutes of Health increasing especially, more institutions have been able to argue that they deserve membership, said Irwin Feller, a professor emeritus of economics at Pennsylvania State University who studies science and technology policy and the economics of higher education. “There will always be some institutions whose credentials are at least as good as the last member” of the association, he said.

For Rice University, one of the smallest institutions in the AAU, the diversity of membership -- including both huge public universities and private institutions known for work outside the sciences -- is important, President David Leebron said. But so is the group’s small size, he said, describing the association as an “intimate environment” in which members can easily reach out to each other and the group's leaders. “It works a certain way because of its size,” he said. “If it were much larger than it is now, it would probably function in a substantially different way.”

Counting and Dividing

One factor that keeps the AAU membership more diverse than it otherwise might be is the normalization process, which measures research funding per faculty member (rather than in raw dollars over all for the institution). Some universities that appear to be outliers, with relatively small levels of federal spending, might in fact be secure in their membership after the numbers are normalized.

Rice, which received $55 million in federal research money in 2008, ranks far below most of its fellow members in that figure alone. But the university’s small size, with 650 total full-time faculty, plays in its favor, Leebron said. “We feel pretty comfortable on the criteria that says it’s something about the quality and intensity of research in the university, not the total research dollars,” he said.

Another beneficiary is Brandeis University, which with only $38 million in federal spending in 2008 might appear among the most vulnerable institutions. “I think we certainly belong in the AAU," President Frederick Lawrence said. “The norming to the size of the school is so important. That, to me, is the best answer to the argument that the AAU is monolithic.”

For institutions like Nebraska, though, normalization has drawbacks. Administrators there argued that counting agriculture faculty for normalization purposes but discounting research money awarded through the Agriculture Department in the initial criteria was a one-two punch that put the university at a disadvantage.

A former president of a public AAU institution who requested anonymity in discussing the association said that normalization could discourage universities from adding faculty who focus on teaching rather than research, and stem expansion at a time when there is a growing emphasis on increasing the country's graduation rates.

The same could be said for faculty members who work in fields less likely to attract research money. “If you’re trying to get in to the AAU and you have a choice between a faculty member that produces outside dollars, versus a humanities professor that almost certainly would not, you shouldn’t hire the humanities professor,” the former president said. “Now you know what the criteria [are] generally, will you grow in students for areas in which you’re unlikely to get outside research dollars?”

Others said that scenario was far-fetched. While universities are not above making moves to benefit their standing in various rankings, whether the AAU’s or those in U.S. News and World Report, focusing on a medical school at the expense of an engineering school or the liberal arts is “such a large change,” Feller said. “Maybe there are universities that do this over time, but it has to be tied into a larger vision.”

The Value of Agriculture

In compiling its rankings, the AAU gives more weight to competitively awarded federal grants, such as those through the NIH or National Science Foundation, than to funding from the USDA, which is awarded by formula. Nebraska’s ejection has revived a long-simmering debate over whether that is the correct approach.

Recipients of Agriculture Department funding aren’t hayseeds or inferior scientists, administrators of land-grant universities argue. They are academic researchers whose work helps combat hunger and contributes to scientific advances across a broad range of disciplines. Some are pushing for the association to reconsider the weight it gives to agricultural research spending.

“Have we effectively recognized the power of the research that has been undertaken by first-rate scientists that come from that strong agricultural research base?” asked Brady Deaton, chancellor of the University of Missouri at Columbia. “We have to make sure that we’re properly evaluating. From an AAU perspective, we’ve got some work to do there so that it properly reflects the strength of American higher education.”

Agricultural funding is awarded by formula for reasons that extend beyond the political, he said. Spreading the money out across the nation ensures that every agricultural zone is taken into account; plant research in Oregon would have different outcomes from plant research in Oklahoma.

“These are first-rate scientists in our land-grant universities,” Deaton said. “Those funds are financing the salaries and the time commitments of our first-rate researchers.”

He suggested that the association might take the output of agricultural research into account, such as articles published in peer-reviewed journals. The discussion is continuing, and while it might not reach a resolution, he predicted that the landscape would look different in 10 years.

“We’ve got to continue to examine alternate measures,” he said. “We’ve got to ensure we have adequate time to discuss what counts and what doesn’t, and whether or not we’re really addressing the issues.”

Measuring Excellence

In leaving the AAU, Syracuse might have jumped because it was about to be pushed. But it drew praise from Feller and Ehrenberg, the experts on the economics of higher education, for choosing to focus on what it does well rather than what the AAU thinks it should do.

“It is sort of amusing that these institutions are becoming more homogeneous, becoming more uniform, as opposed to sort of creating unique, new niches,” Ehrenberg said of research universities. “We can’t all be everything to everyone. We have to sort of appreciate the special strengths.”

An increasing number of universities are qualified, and not all of them will ever make the cut. “It’s just not possible to have 50 universities make it into the top 10,” Feller said. The question, he added, is whether institutions will find other ways to judge quality on their own terms.

Leebron, the Rice president who would like to see the organization remain small, said that while there was no “magic number” for the ideal size, some universities will remain, or become, stellar institutions without the coveted badge of membership.

“We all ought to recognize that the more great research universities there are in the U.S., the better off we are as a country,” he said. “It might not be that all of them are members of the AAU.... That doesn’t diminish the good work that they carry on.”

— Libby A. Nelson

Plain Dealer, May 7, 2011, Saturday

Plain Dealer

May 7, 2011, Saturday

Plain Dealer

Rite Aid workers strike to keep current health coverage

You know where you could find Reatha Tolliver on her days off during the last two months: picketing against her employer, Rite Aid.

Tolliver works at a different Rite Aid store, but she has gladly taken on what she calls a "part-time job" picketing a store in University Heights, one of several unionized stores on strike.

Like many members of United Food and Commercial Workers Union Local 880, Tolliver believes the picket lines are her best hope for retaining her health care benefits. The union has gone without a contract since April 2010 and went on strike against Rite Aid on March 14, largely over medical coverage.

Although the strike involves only six of 61 Rite Aid stores in Northeast Ohio, it illustrates how labor disputes have the potential to turn into public debates amid public concern about job security and economic inequality.

The young Rite Aid strike also has led quickly to a number of court cases and a complaint to federal labor officials.

The union says that, in lieu of higher wages, it negotiated over the years a union-controlled health plan with low annual deductibles and few co-pays. They say Rite Aid officials want to shift these workers to a company plan that would put health coverage out of the reach of most workers, who are low- or moderate wage earners.

Rite Aid officials say the company has a right to control health care costs by offering a different plan.

Picketers at these six stores have encouraged customers to shop elsewhere -- to move their prescriptions from Rite Aid to CVS, Giant Eagle and Dave's Supermarkets.

Dave's and Giant Eagle declined to say whether they have received any Rite Aid prescriptions. CVS did not respond to questions. Regardlesss, union members know that public opinion is their greatest asset. They hope to tap into public sentiment about what they call corporate greed at the expense of workers.

"My annual deductible would go from $250 to $1,200," said Tolliver, a 20-year employee, who is a member of the union's negotiating team. "I can't afford that. I'll have no health care."

Ashley Flower, spokeswoman at Rite Aid headquarters in Harrisburg, Pa., said the compensation package is competitive.

"We're just asking those who use our health plan to pay their fair share toward the costs," Flower said.

So far the union says its approach is working.

Members can point to a statement from a company lawyer early in the strike. The laywer told a Lake County court that sales at a Painesville store had fallen by nearly 35 percent from the same time a year earlier once the picket line went up.

The union also can point to anecdotal evidence: only a few customers in stores that usually see a steady stream of shoppers. The company also has mailed $5 coupons to some customers, accompanied by letters from individual store managers.

"We just can't agree that their members should get free health insurance when many of our other associates and most Americans all have to pay a share of their health insurance costs," read one of the letters.

Rite Aid officials say the strike is having minimal effect.

"Our Cleveland market has been struggling for some time, and the union's decision to strike makes a bad situation even worse," Flower said. "The union is only hurting its members and other associates by telling people to pull their prescriptions and go elsewhere. A loss of business can result in a loss of hours [for employees] and possibly even lost jobs."

Shortly after the strike began, Rite Aid sought injunctions in Cuyahoga, Lake and Lorain counties basically limiting picketers to the sidewalk. The court denied the company in Cuyahoga, sided with Rite Aid in Lorain and granted limited access in Lake on a temporary basis. The union continues to fight that case.

The company said it had to seek court orders after customers complained picketers were blocking doors.

The workers said they doubt that customers saw them in such ominous terms. More importantly, they said they needed that face-to-face access with customers to make their case.

"We're the ones who deal with the customers," Mahoney said. "Many of them know us by name. We're the ones who have offered them products and made this company money."

The union has filed a complaint with the National Labor Relations Board, alleging, among other things, that store managers threatened to fire an employee unless the employee voted in favor of the company's contract proposal. The NLRB will hear the case May 25.

Meanwhile, picketing continues.

On a rainy Wednesday last week, Tolliver and fellow Rite Aid worker Tanya Mahoney stood outside the store at 13470 Cedar Road, in the University Corners shopping plaza in University Heights. Both work at other East Side stores, but they usually join the picket line at this store.

(The other Rite Aid stores on strike are: 5795 State Road, Parma; 2323 Broadview Road, Cleveland; 180 North State St., Painesville; 2709 Broadway Ave., Lorain; and 2853 Grove Ave., Lorain.)

Tolliver wore a hooded yellow rain poncho. Her sign read: "Rite Aid Unfair. On Strike. Don't Shop." Mahoney wore a blue rain jacket. A chorus of passing cars honked in affirmation. The women waved.

Both said they have used their individual stories to win customers over. They said the company has tried to make them appear unreasonable or even irrational for wanting to hold on to the current health care plan.

"We always had the right to choose," Mahoney said. "The health benefit was compensation for the small pay."

When her husband got cancer -- the disease later claimed his life -- it was a relief knowing that the medical bills were paid, she said. A few years ago, during a break in working for Rite Aid, Mahoney had an illness that placed her in a nursing home.

"I can tell you what it means not to have medical coverage," said Mahoney, who has worked for Rite Aid a total of 14 years. "I had to file for bankruptcy."

The women said they are compelled to fight because jobs like theirs are vanishing, even as the retail sector has begun recovering after the recession. Few jobs are full time and offer benefits like health care. They are convinced that if they lose the current health plan, it will be difficult to get coverage again.

The union's approach to getting a contract is often referred to as a "comprehensive campaign." Such labor actions rely on building alliances with other entities that have some link to the employer. They can include customers, suppliers, employees -- even those in other states or countries.

"They are doing multifaceted actions involving both the members and allies," said Kate Bronfenbrenner, director of labor education research at Cornell University. "Ultimately their goal is to get the company to the point where the cost of not settling with the union is greater than the cost of settling."

One of the most effective uses of this approach occurred in Northeast Ohio, said Bronfenbrenner, who studied the Black Flag campaign launched by the unions representing Bridgestone/Firestone workers.

The Black Flag is used to disqualify a driver from an auto race, and the union adopted it as a symbol of its two-year campaign, which eventually spread to more than 40 countries by the time the Steelworkers union settled a contract with the company in 1996.

The alliances the union made ranged from one with GM-Saturn, which offered customers the option of replacing Bridgestone/Firestone tires on new vehicles to union members from Ohio making alliances with locals throughout the United States to pass out black flags at auto races around the country.

The Rite Aid workers in Greater Cleveland have already shown their willingness to build alliances. A few traveled to California to picket with workers at a Rite Aid distribution center in the Mojave Desert, said Craig Merrilees, a spokesman for the union representing the warehouse workers. He said workers had won the right five years ago to negotiate a contract, but that the company had refused until last week. The California union picketed two Rite Aid stores several miles away from the warehouse as part of its effort to win a contract.

Flower, the Rite Aid spokeswoman, said the budding alliance between Cleveland and California didn't lead to a contract.

"They are absolutely unrelated," she said. "We bargain in good faith with each union that represents our associates with the goal of reaching a contract that is fair for all involved."

As both examples show, Local 880's approach to winning a contract could take months.

"The Rite Aid workers play a critical role in this campaign," said Bronfenbrenner. "They have to keep together. If they ever concede, then there is no fight left."

Responded Tolliver: "We have rights, and we are ready to stand up for what we believe in."

Diversity MBA Magazine, Spring 2011

Diversity MBA Magazine

Spring 2011

Diversity MBA Magazine

Article written by Laura Hertzog: Generational Diversity In Today's Workplace

Friday, May 06, 2011

WorldatWork's workspan magazine, May 2011

WorldatWork's workspan magazine

May 2011

WorldatWork's workspan magazine

Research for the Real World

ICS Director Kevin Hallock examines "Pay Ratio and Inequality".

Pay Ratio and Inequality
Should something be done about CEO pay?

Buffalo News, May 1, 2011, Sunday

Copyright 2011 The Buffalo News



All Rights Reserved



Buffalo News (New York)




May 1, 2011, Sunday




Scary times for workers in lockout

Donna Bandich isn't a professional football player. But she knows what it's like to be one these days.


That's because Bandich works at BlueCross BlueShield of Western New York, and like Ryan Fitzpatrick and his Buffalo Bills teammates, she's now locked out of her job.


Only this lockout stings a lot more for Bandich and her 390 co-workers at BlueCross BlueShield's downtown headquarters than it does for wealthy pro football players.


"I've got a child with a disability, and they're locking us out," said Bandich, a Lackawanna resident who has worked at BlueCross BlueShield since 1986. While the locked out workers soon will be able to start collecting unemployment benefits, that won't replace Bandich's weekly paycheck, or the health insurance benefits that have been cut off.


"We're very scared," Bandich said, as a longtime co-worker and fellow single mother standing next to her outside the health insurer's offices wiped a tear from her eye. "We've got families. We've got mortgages."


Bandich has reason to be scared. This labor fight isn't just about wages and benefits. It's about job security, and BlueCross BlueShield's desire for a free hand to outsource work now done by Bandich and her fellow members of Local 212 of the Office and Professional Employees International Union.


BlueCross BlueShield said all of its competitors have the freedom "to explore any and all options to outsource work," and that it's at a significant competitive disadvantage because it can't do the same.


That's precisely why lockouts, while rare, really put the squeeze on workers, who have become reluctant to strike because they often lack leverage.


"The lockout has become a little more common in recent years," said Lou Jean Fleron, an emeritus professor at Cornell University's Industrial Labor Relations School in Buffalo. "Companies have come to employ it in a strategic way."


BlueCross BlueShield claims the locked out workers earn base wages that are 40 percent higher than the going rate locally for similar jobs. But its "final" contract offer, which union members overwhelmingly rejected last week, still offered pay raises of 1 percent during the next two years and 1.5 percent in the third year of the deal.


The company offered to guarantee that no union workers will lose their jobs due to outsourcing for a year after a new deal takes effect, but would allow for job cuts for other reasons, said Deana Fox, the Local 212 business representative.


Bandich was hoping the lockout would be short, as it was in 1990, when BlueCross workers were let back in after less than an hour. No new talks have been held. The company has lined up other staffers to fill in, and said it also might bring in temporary workers.


Julie R. Snyder, a BlueCrossBlueShield spokeswoman, said the company in 1990 allowed unionized workers to stay on the job for eight months after their contract expired. The union launched a campaign to embarrass management in public, harass it in the office and threaten to reduce the company's profits though the cancellation of subscribers. The company didn't want a repeat this time around.


"There were a lot of negative things that went on. It was a no-win situation," Snyder said. "If employees are allowed to work while talks continue, there is little to no incentive for the union to reach agreement."


These are scary times for all.


"We don't know what our future holds now," said John Lineberger, who has worked at BlueCross BlueShield for 25 years. "We do not want to lose our jobs. We'd rather be in there working."


e-mail: drobinson@buffnews.com




LOAD-DATE: May 4, 2011

The Chronicle of Higher Education, May 1, 2011, Sunday

Copyright 2011 The Chronicle of Higher Education

All Rights Reserved

The Chronicle of Higher Education

May 1, 2011, Sunday


What Good Do Faculty Unions Do?

Research sheds little light on quantifiable benefits of collective bargaining

BYLINE: Peter Schmidt

BODY:

ABSTRACT

Research sheds little light on the quantifiable benefits of professors' collective bargaining, which is under attack in some state legislatures.

FULL TEXT

As unions that represent public-college professors have come under attack in state legislatures, the unions' leaders have fought back without being able to define what, exactly, they stand to lose if their right to collectively bargain goes away.

Many union leaders have declared that right essential if faculty members are to be paid adequately, treated fairly, and given a voice in their institutions' affairs. But the research that tests such assertions offers mixed findings. At most private colleges, as well as at public colleges where faculty members have chosen not to form unions or have been precluded from doing so by state law, many faculty members work without union contracts without feeling particularly exploited.

If anything, the research shows that the gains derived through collective bargaining are difficult to measure. Factors such as regional differences in the cost of living and market-related variations in what colleges are willing to pay their employees have confounded most attempts to determine whether faculty members with union contracts are better off than others. At four-year colleges, the financial payoffs from collective bargaining appear modest at best. At two-year colleges, such financial gains might be bigger, but they remain little studied and poorly defined.

The chief benefits of unionization appear to have less to do with getting faculty members more bread than in giving them some say over how it is sliced. Those who belong to collective-bargaining units have been found by researchers to have more say in the management of their institutions and how the faculty payroll is divvied up.

"At institutions where a substantial number of the faculty are represented in collective bargaining, you are much more likely to have a substantial faculty voice in governance," says Marc Bousquet, an associate professor of English at Santa Clara University, regular blogger for The Chronicle, and co-chairman of an American Association of University Professors committee on the working conditions of adjunct faculty members. "It is not necessarily the case that collective bargaining addresses governance procedures directly," he says, so much as it gives faculty members more power within their institutions than they might otherwise have.

"Across the broad spectrum of institutions of higher education, faculty unions do make a difference," says Philo Hutcheson, who has monitored research on faculty unionization as an associate professor of educational-policy studies at Georgia State University. While unions can bring about improvements in faculty members' pay and working conditions, he says, "they are far stronger, in general, in terms of protecting faculty members" from arbitrary management decisions.

Lingering Threats

It is common for state lawmakers to respond to economic downturns by calling on public employees to sacrifice pay or benefits to help close state budget gaps. This year, however, lawmakers in some states have gone beyond trying to extract financial concessions from unions and mounted all-out assaults on the unions themselves. Although the battles are hardly over, unions representing public-college faculty members are on the brink of being stripped of much of their power in Ohio and Wisconsin, and continue to face threats to their existence in Florida.

In Ohio, public employees' unions are urging voters to repeal a measure, signed into law by Gov. John R. Kasich in March, that would sharply limit the collective-bargaining rights of many state workers and specifically renders most public-college faculty members ineligible for union representation by reclassifying them as managerial employees. The campaign against the law has until late June to gather enough signatures to put a referendum to repeal it on the November ballot. If either the petition-gathering effort or the referendum fails, the new law will take effect.

Although the debate in Ohio has been highly partisan, pitting the state's Republican governor and lawmakers against Democrats and their union allies, the proposed reclassification came not from some conservative think tank, but from the Inter-University Council of Ohio, an association of the state's public universities. A similar provision was recently put forward by top Democratic lawmakers in Connecticut at the behest of the Democratic governor, Dannel P. Malloy, only to be killed by a legislative committee at the urging of groups representing public colleges' faculty members.

Faculty members and academic staff at the University of Wisconsin are denied the right to collectively bargain, under a law signed by Gov. Scott Walker, a Republican. The measure remains tied up in court, however, as a result of lawsuits alleging that a legislative committee violated the state's open-meeting laws in passing it. The Wisconsin chapter of the American Federation of Teachers is going ahead with union elections on the system's campuses, out of a belief-untested by any research-that such unions can be a major voice in their campuses' affairs even without collective-bargaining rights.

A bill pending before Florida's Legislature would revoke the certification of any public-college employee union that represents less than half of the workers eligible for membership unless those workers vote to recertify it by July 1. Union representatives have argued that the measure would stack the deck against them by affording little time for recertification votes and requiring the elections to be held during months when fewer faculty members are around.

Seeking More Say

Much of the research on the effects of such faculty unions was published in the 1970s and early 80s, and focused on the initial wave of unionization efforts made possible by states' adoption of laws letting public employees bargain collectively. In an exhaustive research review published in the journal Higher Education in 2008, Christine M. Wickens, then a graduate student at York University, in Toronto, cautioned that the research on fledgling unions from two or three decades ago might have little application to the current era, when faculty unions are more entrenched on college campuses and, at the same time, face comparatively more opposition from political conservatives.

In summing up the research to that point, Ms. Wickens said there was little consensus on the influence of unionization on college governance, and little evidence that unionization promoted academic freedom. She found a fair amount of agreement among researchers that faculty members believe they benefit from unionization when it comes to job security, tenure, promotion procedures, and due process. The research she cited included a 1999 article, in the Journal of Labor Research, which concluded, based on an analysis of data from seven of Ohio's public universities, that belonging to a union appeared to increase a faculty members' chances of earning tenure and rising to full professor.

More recently, however, a study of more than 340 four-year colleges, presented last fall at the annual conference of the Association for the Study of Higher Education, concluded that unionization did not appear to give faculty members significantly more power over tenure-and-promotion decisions, despite the attention given such issues by collective-bargaining agreements.

The paper nonetheless painted a fairly positive picture of unionization's effect on the working conditions of faculty members, finding that unionization "greatly increases faculty influence" over pay scales, the salaries of individual faculty, and the appointments of department heads and of members of institutionwide committees, and shows some signs of giving college faculty members more say over curriculum and faculty teaching loads.

Stephen R. Porter, an associate professor of research and evaluation at Iowa State University, and Clinton M. Stephens, a graduate student there, conducted the study by analyzing the results of a 2001 national survey of faculty-senate leaders and college presidents.

Salary Crunching

Efforts to measure the financial benefits that public colleges' faculty members derive from unionization are complicated by factors that invalidate dollar-for-dollar comparisons of pay packages.

Among the chief obstacles to salary comparisons is the geographic distribution of unionized campuses, which are concentrated in states with relatively high costs of living. About half of unionized faculty members work in California or New York, and most work at colleges in the mid-Atlantic, Midwest, and West, according to data compiled by the National Center for the Study of Collective Bargaining in Higher Education and the Professions.

Where public colleges in such states are found to pay faculty members more, it is hard to tease out whether their doing so stems from collective bargaining or the need to offer more so that faculty members can afford to live there. Further complicating the picture, colleges do not operate in isolation but in labor markets where they compete for talent, so the gains made by unionized faculty members at one college through collective bargaining might then be offered by colleges without unions to keep their faculty members from being lured away.

Also confounding such studies is the chicken-and-egg problem of differentiating unionization's causes and effects. A finding that unionized faculties are paid less than nonunionized faculties, for example, might reflect that collective bargaining does little to improve wages, or it might reflect that frustration over low wages often leads to unionization.

In a paper published in April in Industrial and Labor Relations Review, four economists-David W. Hedrick and Charles S. Wassell Jr., of Central Washington University, and Steven E. Henson and John M. Krieg, of Western Washington University-describe how they fashioned a study of full-time faculty at four-year colleges that sought to account for the effects of unionization alone. They mathematically accounted for cost-of-living differences as well as other factors, such as professional background and institutional classification, that influence how much faculty members are paid, in analyzing data based on about 24,000 faculty members and 1,060 colleges collected from 1988 through 2004 as part of the National Study of Postsecondary Faculty. They concluded that the increase in wages associated with unionization was so small it was statistically insignificant.

The article, "Is There Really a Faculty Union Salary Premium?" cautions that "the weak effect that unions have on salaries does not necessarily indicate that they are ineffective advocates for their members," because it is entirely possible that unions win other gains, such as better benefits and improved working conditions.

Ronald G. Ehrenberg, a professor of industrial and labor relations and economics at Cornell University, says he is not surprised that the faculty members covered by the study did not reap significant financial gains from collective bargaining. Most states that let faculty members at public colleges engage in collective bargaining do not give them the right to go on strike or have salaries set through arbitration, and without either tool, he says, faculty members "have limited bargaining power."

Typically, Mr. Ehrenberg says, labor unions have won major wage gains for their members in industries that can tap into big profits-and state higher-education systems hardly fit such a bill.

Knowledge Gaps

Mr. Hedrick says he and the other authors of the paper on full-time faculty at four-year colleges are conducting similar studies looking at both two-year and four-year colleges and covering other types of faculty members, including adjuncts. They hope to publish results within a year.

Research on unionization's effects on two-year colleges is sparse, and the research on its effect on adjunct faculty is virtually nonexistent.

Full-time faculty members at community colleges in states that allow them to collectively bargain were found to earn substantially more than community-college faculty members elsewhere in a 2006 analysis of data from more than 1,000 institutions. The study was conducted by Jose F. Maldonado, then a doctoral student at the University of North Texas, with the assistance of David E. Hardy, an associate professor of higher education at the University of Alabama at Tuscaloosa, and Stephen G. Katsinas, a professor of higher education there.

The three researchers broke out their results, which they have presented at higher-education conferences but never published, by institution size and by whether colleges were rural, suburban, or urban. They found that the pay advantage for faculty members in collective-bargaining states ranged from 11 percent, or about $4,300, for full-time faculty members at small, rural community colleges to 48 percent, or about $20,200, for those at suburban community colleges that were not part of a system. On average, community-college faculty in states that allowed collective bargaining earned nearly $13,900, or about 32 percent, more than those who were in states that did not. Moreover, the community colleges in states that allowed collective bargaining spent an average of about $4,300, or nearly 50 percent, more per head on benefits for full-time faculty members.

The study only gathered raw numbers dealing with compensation and made no effort to account for cost-of-living differences or other factors that could have skewed its results. In a recent interview, Mr. Katsinas expressed doubt that any such factors could fully account for the pay differences that the study associates with laws allowing collective bargaining, but he acknowledged that such gaps cannot be attributed to collective-bargaining laws alone.

On the question of whether unionization has helped adjunct faculty members, Keith Hoeller, a longtime advocate for adjunct-faculty rights and a co-founder of the Washington Part-Time Faculty Association, is skeptical. Although unions that represent solely adjuncts have cropped up at many colleges, the chief national unions that they are affiliated with represent a mixture of adjuncts and tenured and tenure-track faculty members. Mr. Hoeller, who teaches in Washington State, complains that adjuncts have relatively little say in negotiations involving tenured and tenure-track faculty members, whose interests often are at odds with theirs. "When the dust settles," he says, "there are almost no gains for adjuncts from these bargaining teams."

Speaking From Experience

Public-college faculty members are themselves hardly in agreement on unionization's benefits, as evidenced by the failure of some votes on unionization and the inability of faculty unions to gain much of a foothold among the nation's most prestigious universities.

"The best and the brightest of the faculty don't feel they need a labor union. They feel they are professionals. They feel they are competing in a national market. They don't want to get bogged down by collective bargaining," argues Richard K. Vedder, a Chronicle blogger who is director of the Center for College Affordability and Productivity and a professor of economics at Ohio University, one of three public universities in that state where faculty members never went the unionization route.

But Rudy H. Fichtenbaum, a professor of economics at Wright State University and a member of the board of the Ohio conference of the AAUP, says he is convinced that the state's faculty unions are worth fighting for.

"We can definitely point to a lot of tangible benefits from collective bargaining," he says. At Wright State, he argues, it has led to a fairer distribution of raises, clearer tenure requirements, faculty input on annual evaluation criteria, and better benefits for faculty members. "There is no question that this is a better place to work."

LOAD-DATE: May 3, 2011

Salisbury Post, April 30, 2011, Saturday

Salisbury Post

April 30, 2011, Saturday

Salisbury Post

Gates Foundation exec speaks at Livingstone

An official with the Bill & Melinda Gates Foundation will deliver the keynote address during commencement exercises at Livingstone College on Saturday.

Commencement begins at 10 a.m. in Alumni Memorial Stadium. In the event of bad weather, exercises will be moved to Varick Auditorium.

Since 2005, Joe Scantlebury, senior policy officer in the U.S. Program Advocacy Division for the Bill and Melinda Gates Foundation, has helped the organization diversify its U.S. Program Advocacy partners in key states and currently manages its Civil Rights and Equity Organization portfolio.

Before joining the Bill and Melinda Gates Foundation, Scantlebury was a staff attorney for the Youth Law Center and helped establish the Legal Action Center National H.I.R.E. Network, a national ex-offender employment clearinghouse and employment advocate, and served as its first director.

Scantlebury was also executive director of STRIVE/East Harlem Employment Service, a dynamic international workforce development agency. He has served as a Special United States Attorney for the District of Columbia, an impact litigator for the U.S. Department of Labor and an associate at Eisner, Levy, Pollack & Ratner, a law firm in New York City that focuses on labor and employment law.

Scantlebury has a bachelor’s degree in industrial and labor relations from the New York State School of Industrial and Labor Relations at Cornell University and was one of the first Cornell Tradition Fellows. He has a law degree from New York University School of Law, where he was a Root-Tilden-Snow Fellow.

He is a member of the board of directors of the National Poverty Law Center, a member of the Youth-in-Transition Funders Group Steering Committee and a mentor to a number of students and young professionals.

He is also an active participant in the Neo-Catechumenal Way movement in the Catholic Church.

This year’s graduation will feature 15 members of Livingstone’s groundbreaking Bridge Program, which is for students who have academic deficiencies in high school.

They must successfully complete an intense summer program that includes classes in English, math, history, computers and theater, as well as early morning workouts, before being provisionally admitted as freshmen.

Last year’s graduating class had seven Bridge students.

“The Bridge Program is vital to the success of many of our students at Livingstone College,” said Director Sylvester Kyles. “Last year we had our first-ever Bridge graduates, and it was a really big deal. This year we have more than doubled the number of Bridge graduates, and that’s a testament to the vision and leadership of President Jenkins as well as how hard the Bridge students work. I am confident this program will continue being one of the most successful ones at the college, and I cannot wait to see the faces of the Bridge graduates — as well as all of our graduates — when they walk across the stage and receive their degrees.”

The Progressive, April 29, 2011, Friday

The Progressive

April 29, 2011, Friday

The Progressive

Wis. AFL Wimps Out on Boycotts

Why isn’t the Wisconsin AFL-CIO supporting boycotts of companies whose executives are huge supporters of Governor Walker?

On April 28, Wisconsin AFL-CIO President Phil Neuenfeldt issued a statement denying any involvement in, or apparently any interest in, such boycotts.

“Let's be crystal clear, there are not, nor have there ever been, any boycotts encouraged by our organizations,” said Neuenfeldt. “We have made clear all along that we see small business as a partner and ally in getting Wisconsin back to work. Right now, Wisconsin teachers, students, students, firefighters, small business owners and citizens everywhere are working side-by-side to demand our governor and legislature stop playing politics and start putting Wisconsin first."

Earth to Neuenfeldt: Johnsonville Brats is not your “partner and ally.” Neither is Sargento Cheese, two of the targeted companies.

They are your enemy.

They hate your guts.

They want to destroy you—and all of organized labor.

Now I’m not crazy about the campaign to place anti-Walker stickers on grocery items of such companies because I think this particular tactic is silly. It’s needlessly illegal, and it’s not a good way to convince people not to buy a product. Far better to be picketing outside, like they used to do during the farmworkers’ grape boycott in the late 1960s.

But it’s one thing not to embrace the “Stick it to Walker” effort. And it’s quite another to eschew the boycott tactic entirely, and that’s what the Wisconsin AFL-CIO is foolishly doing.

Some opponents of the boycotts say why punish a company for the private decisions of some of its executives or workers.

But this is a joke of an argument.

Because the people from Johnsonville Brats and Sargento Cheese who’ve contributed to Walker aren’t some guys stuffing sausage into casings or cheese into sticks. They are the head honchos!

Take Johnsonville. Between November 12, 2008, and October 2, 2010, Johnsonville employees gave a total of $40,700 to Walker, according to the Wisconsin Democracy Campaign. Of that, $40,500 came from the Stayer family alone, which owns and runs the company.

Or take Sargento. Between September 16, 2008, and October 13, 2010, Sargento employees gave a total of $30,100 to Walker. Of that, $22,950 was from the Gentine family alone, which owns and runs the company. And $3,000 was from George Hoff, executive vice president and CFO.

Selected boycotts against companies whose bosses are the biggest backers of Walker, like Johnsonville and Sargento, make a lot of sense.

“Unions will only succeed if they use their power to pressure the corporations that are working with Walker to take collective bargaining rights away,” says Kate Bronfenbrenner, director of Labor Education Research at Cornell University. “They need to make the cost of not having collective bargaining greater than the cost of having it.”

The movement for labor rights in Wisconsin can’t work “side by side” with Johnsonville and Sargento.

For one simple reason: They’re not on the same side!

Forbes, April 28, 2011, Thursday

Forbes

April 28, 2011, Thursday

Forbes

Female Doctors Face A $2.3 Million Wage Gap

By JENNA GOUDREAU

A shocking study by medical website Medscape, a division of WebMD, today reveals that the gender wage gap among physicians may be widening—fast. After surveying 15,000 doctors, researchers discovered that across all specialties women earn a median salary of $160,000, compared to men’s $225,000. That’s a difference of $65,000 a year, meaning female doctors earn just 71% as much as male doctors.

In the course of a 35-year career, female physicians will lose a total of $2.3 million on average.

The gap may be explained by several factors, including firm size, specialty type, hours worked and remaining discrimination.

According to the study, orthopedic surgeons and radiologists earn about $350,000 a year, while primary care physicians and pediatricians earn just $150,000 annually. Also on the lower side of the pay spectrum are psychiatry, emergency medicine and gynecology. Women likely take a hit in pay for choosing these lower-paying specialties, said Cornell University labor economics professor Francine Blau in a recent interview.

In Pictures: Top 10 Best-Paying Jobs For Women In 2011

Female physicians may also compromise salary by choosing smaller firms and opting for greater flexibility. Doctors in large firms with over 100 physicians on staff earn $23,000 more per year than those in small private practices, the researchers found. Moreover, women generally spend fewer hours seeing patients than men, and are twice as likely to spend less than 30 hours a week on patient care.

Objective factors may not be the only reason for the pay difference, however. The American Medical Women’s Association (AMWA) takes a strong position that discrimination is at play.

“The problem [of discrimination] hasn’t gone away,” AMWA President Eliza Lo Chin, M.D., told Medscape Medical News in February. “The gender equity gap is not closing. There’s a lot of work to be done.”

Women now earn nearly half of all medical degrees, but the compensation gap has increased in the last decade. A previous study published in Health Affairs, a health policy journal, discovered a widening pay gap even after controlling for variables such as medical specialty, patient care hours, practice type, location, and physician age.

Breaking News: Women Surpass Men In Advanced Degrees

According to the authors, in 2008 male physicians in New York who were straight out of residency programs earned $16,819 more than their female counterparts. In 1999, they out-earned women by only $3,600. The pay difference nearly quintupled in only nine years.


Leaders of AMWA argue that medical organizations believe they can “get women for less” and market their family-friendly work arrangements. AMWA fears that women may be giving too much away in an unfair trade-off, and says that when women do negotiate for higher salaries, they are often viewed as “demanding.” Meanwhile, despite women now comprising one-third of all practicing physicians, just 12% of medical school deans and chairs are female.

The pay gap should not discourage women from entering the field, however. The U.S. Bureau of Labor Statistics (BLS) expects the health-care industry to add three million jobs by 2018. And among the hundreds of occupations tracked by the BLS each year, physicians and surgeons ranked as the No. 1 best-paid professions for women in 2010.

OC Register, April 26, 2011, Tuesday

OC Register

April 26, 2011, Tuesday

OC Register

Reform meets immovable object ... teachers union

"When Oprah starts talking about it, we're almost there," says Julio Fuentes, president of the Hispanic Council for Reform and Educational Options. School choice is "definitely a mainstream topic right now," Fuentes crows at National School Choice Week festivities in Washington, D.C., in January. "Five or six years ago, when I got into this movement, we were viewed as the crazy voucher folks in Florida running around trying to pass legislation. Now Oprah is talking about it, so we're no longer crazy. We're making sense. We're making progress."

Oprah isn't alone in her late-breaking interest in education reform. Documentaries about school choice are popping up like pimples on a middle school boy, first among them the wildly successful, Sundance-winning Waiting for "Superman," by director David Guggenheim of An Inconvenient Truth fame. President Barack Obama spent 1,000 words of his 7,000-word State of the Union address this year on schools, referring to public education as "a system that's not working." Secretary of Education Arne Duncan kicked off the new year by writing in The Washington Post that "few areas are more suited for bipartisan action than education reform." Old Democratic mayors are saying nice things about reform, and new Republican governors are saying mean things about the status quo. And then there's Oprah, who devoted one of her final episodes to school reform. Her guests included Guggenheim, education technology champion Bill Gates, and the controversial former chancellor of the District of Columbia's public schools, Michelle Rhee.

The Elementary and Secondary Education Act—rechristened No Child Left Behind (NCLB) in 2001—is overdue for congressional reauthorization. On the state level, tight budgets and partisan rivalries are driving a reevaluation of how education money is spent. Policy makers are taking a fresh look at the way teachers are compensated, considering drastic reductions in administrative overhead, and reconsidering the role of technology in schooling. Independent charter schools and publicly funded vouchers are on the rise.

None of these ideas are new, but implementing them has taken on a new urgency. Is 2011 finally the year for serious education reform?

Irresistible Force

There is no denying that U.S. schools are ripe for reform. Per-pupil education spending has doubled in the last three decades, while test scores have remained stubbornly flat. American kids squat solidly in the middle of the pack in international testing, with 15-year-olds ranking about average in math and reading, slightly below average in science. Dropout rates in major cities are approaching 50 percent.

But schools have been this bad for a long time. Why the sudden surge of interest?

While reform remains primarily a Republican hobbyhorse, the conversion of some prominent Democrats has brought energy and life to the pool of exhausted political players. Michelle Rhee, the best-known of the eponymous Supermen in Guggenheim's documentary, identifies as a Democrat and worked for Democratic Mayor Adrian Fenty (who lost the 2010 Democratic primary to a candidate backed by the teachers union). The Obama education team, led by Duncan, has been more open to talking about education reform than any Democratic administration in recent memory. Recently departed New York Schools Chancellor Joel Klein is a Democrat as well; he first made his name prosecuting Microsoft for antitrust violations in the Clinton Justice Department. Democratic campaign strategist Joe Trippi actively supports school choice. Even the rabble-rousing minister and lefty activist Al Sharpton has joined a new, Gates-funded lobbying group called Democrats for Education Reform.

Newark, New Jersey, boasts the reform dream team of zippy young Democratic Mayor Cory Booker plus fat and happy Republican Gov. Chris Christie. The two politicians are planning a massive education overhaul, which may include big cuts in the city's morbidly obese education bureaucracy, more support for charters and vouchers, and performance pay for teachers, all fueled by a $100 million donation from Facebook founder Mark Zuckerberg. The media have been friendly toward their bipartisan effort—Booker, Christie, and Zuckerberg appeared on Oprah together as well—making reformers giddy. "When the most liberal paper [the Newark Star-Ledger] in the state endorses a voucher bill," says Derrell Bradford, executive director of New Jersey's Excellent Education for Everyone, "the only thing stopping you is you."

But if all obstacles had indeed been removed, parents would have widespread education choice, and public schools would be noticeably on the mend. Neither is yet close to being true.

In urban school districts, where schools have been disaster zones for at least a generation, despair is breeding robust cooperation. But areas of bipartisan reform agreement are smaller on Capitol Hill and in statehouses around the country. More radical school choice proposals, such as vouchers for private school tuition, are mostly off the table. Usually when the two parties join hands it's not to change the status quo but to protect it. When Republicans talk about fixing schools, they often mean simply giving kids and parents ways to bail out of the worst of the worst. When Democrats talk about reform, they tend to prefer spending more to patch things up and build on top of the existing system. Both sides wind up voting for increased spending in the short and long run.

The 1965 Elementary and Secondary Education Act, which controls the flow of federal K–12 funds to the states, is typically revisited every five to seven years. Duncan and others are hopeful they can get some form of education reauthorization to the president's desk for a signature this year despite the Republican takeover of the House. As Teach for America vice president (and former husband of Michelle Rhee) Kevin Huffman points out in U.S. News and World Report, "the relevant committee chairs and ranking members (Tom Harkin and Michael Enzi in the Senate, John Kline and George Miller in the House) are experienced pros"—and known moderates, the sort of people more likely to keep the spigot open than push radical reform.

In this regard they are in step with the president, who despite a reformist reputation has a mostly status quo record. Obama's main boast about K–12 education reform in the State of the Union address was that "instead of just pouring money into a system that's not working, we launched a competition called Race to the Top." It would have been more accurate to say, "In addition to pouring money into a system that's not working, we launched a relatively insignificant competition called Race to the Top."

At $4.4 billion, Race to the Top spending accounted for just a small share of the $500 billion spent on education at the federal, state, and local level. That said, by refusing to give states the money until after they implemented reforms such as publicizing information on teacher quality and lifting caps on charter schools, the administration did manage to elicit a decent-sized bang for its buck. As Obama correctly noted, "For less than 1 percent of what we spend on education each year, it has led over 40 states to raise their standards for teaching and learning."

In education policy, Washington has tended to be the worst kind of backseat driver. The real power to set curriculum and allocate resources rests with the states, meaning the federal government can only bribe, cajole, and reprimand from a distance. But the bribes keep getting bigger and bigger, which means state policy is increasingly subject to the whims of the feds; many reformers would like to use that influence to advance school choice. In the case of Race to the Top, the piles of cash were big enough (a couple hundred million dollars per state in most cases) and the rules specific enough that they gave state legislators, governors, and education bureaucracies sufficient incentive to risk ticking off teachers unions a little.

But those same unions still play an influential role in determining how the other 99 percent of education money is spent. The money pouring in to preserve the status quo dwarfs the amount used to encourage reform.

Immovable Object

Obama got one thing right in his State of the Union speech, at least on the federal level: "Race to the Top is the most meaningful reform of our public schools in a generation." That's true: A program that doled out a measly $4 billion in chunks ranging from $75 million to $700 million probably is the biggest step the U.S. government has taken toward school reform in a couple of decades. Which is a sad commentary on recent history.

In 1983 there was "A Nation at Risk," a Reagan-era manifesto on the need to get the feds out of education. In 1994 President Bill Clinton signed the Goals 2000 Act, which focused on increasing graduation rates and test scores by adding tutors and tech to traditional classrooms. And in 2001 there was No Child Left Behind. That legislation incorporated extremely watered-down elements of the school choice agenda, including encouragement for charters, vouchers, and other ways students can escape seriously underperforming schools with a little government cash in their backpacks. That legislation was a solidly bipartisan endeavor—Republican President George W. Bush and Sen. Ted Kennedy (D-Mass.) announced the program in a lovey-dovey press conference—but within a few years NCLB had become widely unpopular. The law's national testing mandate undermined state autonomy, forcing teachers to focus on a high-stakes end-of-year test; meanwhile, state autonomy in selecting and calibrating the tests undermined their usefulness in evaluating academic success. And the law's provisions for school choice proved too easy to work around, eliminating the harshest consequences for failing schools.

The consensus about how Washington can repair America's schools has now shifted yet again, this time away from a test-based choice model and toward a fixation on teacher quality. At best, the teacher quality movement could result in better evaluation procedures, public transparency, merit pay, and a move away from seniority-based hiring and firing. At worst, it will exacerbate the focus on teaching credentials to the exclusion of competence and fund lots of continuing education junkets for senior teachers.

The strongest among the education powers that be, the great immovable object of American education, is teachers unions. In the Wisconsin, Idaho, and Indiana legislatures, bills to limit teachers' collective bargaining to wages and benefits are coming to the floor, with the goal of elbowing union leadership out of education policy decisions. Tennessee Republicans are looking to make the Volunteer State the sixth in the union to prohibit collective bargaining by teachers altogether. (At least some degree of collective bargaining is mandatory in 35 states, according to the National Council on Teacher Quality.)

Some high-profile Democrats have been going after teachers unions too. In December, Los Angeles Mayor Antonio Villaraigosa, a former field organizer with the locally dominant United Teachers Los Angeles, took the education world by surprise when he wrote this in The Huffington Post: "In the past five years, I've partnered with students, parents, non-profits, business groups, higher education, charter organizations, school district leadership, elected board members, and teachers to engage in meaningful change. Along the way, there has been one, unwavering roadblock to reform: teacher union leadership."

In the face of this renewed attack of surprising force (and from surprising quarters), unions are scrambling to figure out ways to hold the line. The reformers' nemesis is Randi Weingarten, the small, fierce president of the American Federation of Teachers (AFT). Bewildered to find herself the villain of Waiting for "Superman," Weingarten has been loudly telling anyone who will listen that she is, in fact, on the cutting edge of school reform. The AFT has a history of being slightly softer on charters than its competitors over at the National Education Association, and Weingarten proclaimed an interest in reaching out to reformers this fall, with "nothing off the table."

Yet when it comes to battles on the ground, unions are sticking with time-tested tactics. "When education reform is done without teachers' input, it is doomed to failure," Weingarten warned The American Prospect's Dana Goldstein in March 2009. After Weingarten helped kill a voucher program and then oust reformist darling Michelle Rhee from Washington, D.C., her words should be taken seriously. Like cartoon supervillains, teachers unions are extraordinarily powerful and likely to reappear in a sequel even after you think they've been defeated.

Money Matters

The Cornell labor historian Richard W. Hurd thinks the recent rise in anti-unionism can be directly attributed to the nationwide need to cut government spending. "It quite clearly is traced to the public-sector budgets and the deep recession—the fact that we still have depressed tax revenue for governments at all levels," Hurd told Education Week in February.

There's nothing like a shortage of cash to make politicians open to new ideas. While a significant $87 billion in education money flowed downhill from Washington last year, the rest of the cash to run public schools—four or five times that amount—comes out of state and local budgets. And after a fat decade, those budgets are suddenly tighter than a pair of Gov. Christie's pants. New Jersey plans to cut $820 million in state education aid—part of $11 billion in trims—to avoid raising taxes. In Texas a $15 billion shortfall, a balanced budget amendment, and an unwillingness to raise taxes have pushed the state legislature toward a proposed $5 billion cut for public schools. Faced with a $25 billion budget gap, California gubernatorial recidivist Jerry Brown is threatening deep cuts in K–12 education. In February another Democratic governor, Andrew Cuomo of New York, proposed reductions in education funding and Medicaid to trim a $10 billion budget shortfall, saying the cuts were a necessity in his "fundamentally bankrupt" state.

In New York City, Mayor Michael Bloomberg is planning $1 billion in cuts to the school budget, including 21,000 teacher layoffs. New York has a "last hired, first fired" rule, which means, as the mayor put in bluntly in a February radio interview, "We'd have to part company with some of the best teachers."

It's the same sob story in at least a dozen other states: We are out of money, and teachers are expensive. Such threats are not unprecedented. Firing teachers ranks just behind firing police and firefighters as a bogeyman tactic for politicians who want to continue extracting money from the bigger, richer levels of government above them. And emergency cash transfusions have been forthcoming in the last couple of years. A federal jobs bill in August dumped $10 billion on states around the nation to preserve 160,000 education jobs, and school bureaucracies were the biggest beneficiaries of stimulus spending as well, picking up about $100 billion nationwide to cover teacher salaries. But Republicans now dominate the House of Representatives, foreshadowing fewer federal giveaways and bailouts to a constituency that overwhelmingly supports Democrats.

That means education budgets may actually lose a pound of flesh this time around, something that hasn't happened in a long, long time in most places. There are exceptions. Louisiana has seen an astonishing flowering of choice and innovation after being forced to re-evaluate the way it does pretty much everything post-Katrina. But most schools and education bureaucracies have become accustomed to living larger and larger every year. Cuts are going to be a big deal.

Which helps explain why teachers unions are spending so much money to preserve their jobs. The National Education Association—the largest teachers union in the country at 3.2 million members—spent $40 million in the 2010 election cycle, giving $2 million directly to Democrats. The American Federation of Teachers, with another 1.4 million members, gave $2.6 million directly to Democratic candidates (compared with a piddling $8,000 to Republicans). The unions expect a return on that money, mostly in the form of consideration when appropriations committees meet.

Is Choice Cheaper?

While the beneficiaries of the status quo panic about budget cuts, some reformers see opportunity. Without knowing it, many students and parents who opt for charter schools or similar options are already saving their school systems cash. Charters generally are expected to do more with less. A February study from Bellwether Education Partners found that California charters receive 36 percent less per-pupil funding than the average California public school. Nationwide, charters receive almost 20 percent less per kid, according to a 2010 Ball State University study. In D.C. the funding gap is an astonishing 41 percent. The difference in state or city per-pupil spending is usually explicit; charters simply get less. But some of the difference comes from the fact that charters have to get up and running on their own—finding, renovating, and renting or buying facilities out of limited budgets while traditional schools rely on publicly built and maintained buildings—meaning more of their expenses are borne by the state, over and above the traditional school spending.

Similarly, vouchers cost less money per pupil than the school would otherwise have spent. As New Jersey's Bradford puts it: "There are these longer-term benefits that you financially cannot ignore. I mean, if you can educate a kid for $11,000, you don't have to spend $25,000 on them. If you can send a kid to a school that's already got a facility, you don't have to build a new one and bond it out for 25 years in a state that's already bankrupt."

Most reformers don't like to explicitly make the argument that choice and innovation will cost states less. One reason is obvious: Saying you need less money is a great way to get your funding slashed. Furthermore, selling yourself as the bargain-basement option may turn off parents and legislators, who would rather be seen as willing to spare no expense in educating the next generation.

There are success stories for cheap education options, most of which rely on technology. Florida Virtual Schools, which have been operating for almost 15 years, provide classes to 100,000 kids statewide for less than the cost of the same credit hours in traditional classrooms. The program has yielded small but significant improvements in bringing kids up to grade level in math and reading at the bottom while yielding slightly greater advanced-placement scores at the top. A 2002 bill limiting class size in Florida took effect last summer. And since the state already has a successful virtual course catalog to draw from, it seems like a no-brainer to move some courses online. More than 7,000 students in Miami-Dade schools are now taking core classes online in labs. For younger kids, combining online learning with caring supervision in cheap, modular spaces allows nonprofit Rocketship Education to keep costs low while significantly improving outcomes for at-risk kids.

Charters often make up some of their funding gap with private money. Increasingly, traditional public school systems are doing the same, seeking private cash to cover shortfalls or finance improvements. Newark is still figuring out what to do with all that Facebook money. D.C.'s Rhee brought $65 million of donations into the system to cover the introduction of merit pay for teachers. Much of that cash was essentially bribe money; it funded bonuses and pay increases for everyone, even the teachers who chose not to forgo tenure protections in exchange for a chance at merit pay. Whether a public-private partnership model is sustainable for most school systems will depend largely on how much control the traditional stakeholders are willing to give. Many institutional donors are buying an opportunity to tinker, and unions and education bureaucrats don't much like that kind of interference.

Even if choice will be cheaper in the long run, the transition may still be expensive. In addition to such obvious costs as new computers, new facilities, and new curricula, there is the cost of buying off the biggest beneficiaries of the status quo, including dealing with the outstanding pensions and benefits of senior teachers who have spent decades expecting those rewards. But as state budgets tighten up further, reformers may want to rethink the powerful persuasive force of offering a better budgetary bottom line.

Looking for Workarounds

Even as reform vaults forward in popularity, a handful of the most successful reformers seem less than confident about the wisdom of trying to make substantive changes from within traditional educational and political institutions. The most prominent among them is Joel Klein.

Klein's eight-year tenure as chancellor of New York City schools saw some remarkable turnarounds in the city's troubled education bureaucracy. He pledged to abolish the notorious "rubber rooms" where inept but unfireable teachers accumulated pay, benefits, and seniority, for years without entering a classroom. (Klein has declared victory on this front, but the problems of seniority and long disciplinary processes remain in hiring and firing, and there are still teachers in the city who are paid for not working.) He pushed to release teacher performance data. He instituted reforms in hiring and firing that would have been unthinkable in previous administrations.

But at the end of 2010, Klein bailed. Instead of fixing schools from the inside, he will be looking to improve education as an executive vice president at Rupert Murdoch's News Corporation. The empire that owns Fox News and The Wall Street Journal isn't the place you'd expect to find one of the nation's most prominent public educators, but Klein is creating a new education division within the company focusing on digital learning content and platforms to help parents work around the dysfunctional system—and eventually to help those systems function better.

Klein's departure may not have been entirely due to a philosophical preference for private vs. public sector. New York City's teachers union contract is up for renegotiation, and Klein had reportedly hit a wall. Labor negotiations took up most of Rhee's D.C. tenure, consumed much of her energy, and ultimately hastened her demise. But Klein says he sees promise outside of education politics, in "using technology, software, distance learning, platforms, individuation, so that we focus on each child, rather than think one teacher can figure out the sweet spot in a class of 26 kids.

"The status quo has enormous defenders," he adds. "People who do well under the existing status quo, whether it's the unions, whether it's the politicians, whether it's the bureaucrats, vendors—those are the groups that will protect a status quo that serves their needs, even if it doesn't serve the needs of the students. We have got to move to a customer-focused school system. When I say ‘customer,' I mean our students."

Klein isn't the only recently departed school executive talking about students as customers. Rhee has formed a new group called StudentsFirst, which she officially announced during that Oprah spot in December. The former D.C. schools chief aims to create the education-reform equivalent of the National Rifle Association or American Association of Retired Persons, in which "vested interests will take a back seat to children's achievement." One of StudentsFirst's functions will be to dole out cash directly to schools that demonstrate a willingness to make changes that bureaucracies and unions oppose, including data-driven hiring and firing.

There may be an emerging bipartisan consensus that education policy needs a massive and urgent overhaul. But if the reformers are becoming an irresistible force, the education establishment remains one of the great immovable objects in American politics. Superman may be visible overhead, but the landscape is littered with Kryptonite.