Are teacher unions putting profits before people?

Doug Tuthill

According to the Wall Street Journal, the Securities and Exchange Commission is examining the for-profit business practices of Florida’s teacher unions and their for-profit business partners.

The Journal reported recently that teacher union leaders are pushing teachers to purchase retirement investments from union-owned, for-profit companies that charge unusually high management fees. These higher fees are increasing the unions’ profits at the expense of teachers’ retirement funds.

The Journal writes: “The setup is one of an array of similar deals in which unions and other groups get income from endorsements of investment products and services — often at the expense of teachers … The ties help explain why many local-government workers continue to pay relatively high retirement-plan costs, while fees in corporate-based retirement plans are often lower and have been falling for years.”

I was first informed about the for-profit business ventures of teacher unions when I became a local union president in 1978. I had questions, but I was 22, and my mentors assured me our profits benefited our members and the union. Forty years later I still use a credit card that is managed by a for-profit joint venture involving the National Education Association (NEA), MasterCard, and Bank of America, even though I haven’t been an NEA member since 1997.

Given how critical teacher unions often are of for-profit businesses operating in public education, it’s ironic that these same unions operate a variety of for-profit businesses themselves. But the unions are selective in their criticisms. They only criticize for-profit businesses they perceive as competition, such as the small number of for-profit charter schools that aren’t unionized. For-profit contractors, bus companies, furniture vendors, teacher training providers and hardware and software companies, among others, are fine.

I do not object to teacher unions, or anyone else, operating for-profit businesses in public education. Without profit there would be no credit. Without credit there would be no scalable innovation. And without scalable innovation, we’d all be living in caves.

I also don’t object to teacher unions using their influence with the Democratic Party and the media to maximize their profits, provided it’s done legally and with transparency. All multimillion-dollar corporations, including teacher unions, work the media and lobby government to enact policies that advantage their businesses. I do object to teacher unions promoting their business interests in ways that hurt our most vulnerable and disadvantaged children. While the SEC is investigating the legality of the unions’ business practices, my concern is with the morality of their business practices.

In Florida, teacher unions have used their profits to help fund lobbying and lawsuits to take away education options from our state’s highest-poverty, lowest-performing students. Their goal is to protect their market share and revenue even though these actions hurt disadvantaged children and are inconsistent with the values of most teachers. Instead of attacking our most vulnerable children, teacher unions need a new business model that allows them to find common ground with these children and their families.

The future of public education is customization. Soon every child will have access to a customized education. Teacher unions need a business model that aligns with and supports customization. They will go out of business if they continue insisting that public education can only take place in government-managed schools covered by one-size-fits-all collective bargaining agreements. This 1970s model of public education, and the early 1900s model of industrial unionism that accompanies it, doesn’t work for many children and is going away.

There is a positive role for teacher unions in public education if they will adopt a new unionism that puts people above profits and empowers teachers and families to have more control over how each child is educated.

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