Unions and Merit Pay

Many of the usual suspects are taking a crack at the question of why teachers unions oppose merit pay and what can be done about it. Here, for example, are Megan McArdle, Matt Yglesias, Tyler Cowen, and Bryan Caplan.

To me, they mostly miss the point - though at least one commenter is more astute. Caplan gets my cluelessness award:

I don't doubt that unions tend to oppose merit pay, but the reasons are unclear. Profit-maximizing monopolists still suffer financially if they cut quality; the same should hold for unionized workers. Why not simply jack average wages 15% above the competitive level, and leave relative wages unchanged?

Or to put the puzzle another way: Once you've secured a raise for all the workers in your union, why prevent employers from offering additional compensation for exceptionally good workers?

Megan:

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

And Matt is more focused on the what than the why:

Take, for example, the hot issue of teacher compensation. The traditionalist view is that teachers should get paid more for having more years of experience and also for having more degrees. The reform view is that teachers should get paid more for having demonstrated efficacy in raising student test scores. This is an important debate, but I think it’s really not an ideological debate at all. I think the only reason it’s taken on an ideological air is that unions have a view on the matter and people do have ideological opinions about unions in general. But if we found a place where for decades teachers had been paid based on demonstrated efficacy in raising student test scores, then veteran teachers and union leaders would probably be people who liked that system and didn't want to change to a degree-based system. Because unions are controversial, this would take on a certain left-right ideological atmosphere but it’s all very contingent.

Most of the above misses the point. The most fundamental characteristic of the union is embedded in its name - unity is the whole point. Anything that pits member against member undermines that unity. Unions, consequently, are not about to like merit pay.

That doesn't mean merit pay is a bad idea, or that it can't be implemented in a form that is relatively palatable to teachers. I favor a sort of collective approach, where a whole school gets a merit grade and individual teachers have a say in allocations. In particular, this will give teachers an incentive to improve or get rid of incompetent colleagues and try to imitate the best.