Tuesday, May 13, 2014

According To One Math Teacher We Are Not Getting Our Full Retroactive Raises.


















One of the major selling points of the proposed contract is that we are getting the "full retroactive raises" despite the length of years to actually receive it.  In a contract that is giving its members a 1.43% annual raise for the seven years, less than the 2.2% inflation rate for the last three years.  Failure to give us the 11.3% raise in our upcoming September checks (instead its 2.1%).  A " zero raise" for eighteen months with most of these raises and "retroactive raises" deferred and back-loaded to the end of the contract and "throwing the ATRs under the bus".  It now appears we are being shortchanged on our "retroactive pay"


Esteemed high school Math teacher Steve Hiller of the Bronx has taken the time to fully analyze the math involved and believes the City and the UFT used some questionable accounting tricks to claim the teachers will be made whole by October 2020.  Without going into detail here is the email Mr. Hiller sent me.  Decide for yourself.



UFT CONTRACT: Consequences of no interest on deferred payments

The following is a brief examination of the math behind the deferred payments in the proposed contract. The claim made on numerous occasions by Mulgrew that UFT members will receive “100 percent of the money they are entitled to, back to Nov. 1, 2009, by 2020” is at best a reductionist simplification of the true nature of the payments, and at worst a willful attempt at manipulation of the membership. New York City is the financial capital of the world. It is simply impossible to accept that the framers of this contract simply forgot about the role of compound interest when payments are deferred over time.
I must admit up front that I am by no means an accountant, and have little knowledge of the formulas used in that world. I have approached this problem purely mathematically, and it is conceivable that I have neglected some factor. That said, given the elegance of the result, both intuition and experience tell me that this is highly likely to be the correct solution. If anyone has the relevant financial knowledge, I would love to hear from you.
The interest calculations here are complex. On the one hand, the city is apportioning raises in a piecemeal fashion over many years. Each of these individual amounts grow for different lengths of time. On the other, the city is making several discrete payments to us at many different points in time, each decreasing the total amount that will grow with interest. To the extent of my understanding of the contract, the equation below tells the value of the aggregate monies owed to us in 2020 if they were invested at a rate r from the time they were earned (where an interest rate of 4% corresponds to r = 1.04).
       
Below in the table on the left you will find the 2020 value of the retroactive payments at top salary compounded for various interest rates. Note the 0% rate is what the contract proposes. (For the life of me I cannot figure out why the UFT claims the total payments for top salary is $54,000 – even at 0% interest, my current understanding of the contract insists that this should be $56,000.) To find your loss from not getting any interest, pick a percentage rate and subtract $54,000 from the value.
The table on the right is the big takeaway. It shows how many months at your current salary the contract is deficient for various interest rates. This table should be roughly independent of what that salary actually is. This can be viewed as how many months the contract expects you to work for free.





Again, this is a very complex problem and I am not an accountant. But it is clear to me that very pertinent information has been withheld from the discourse, and this is something that both the city and the UFT are almost certainly aware of. I speculate that this was a way to claim we are being given the 4% + 4% as per pattern bargaining, without having to actually pay it to us. To wit, if we were instead given 3% + 3% with five and a half percent interest, we would be receiving almost identical payouts.
As someone who knows the math, I will say that this very much feels like an attempt to manipulate those who do not, and this intellectual dishonesty rankles me considerably. I fear that many UFT members are unaware of the implications of the proposed 0% compounded interest, and my hope is to ensure that you have all relevant information before you cast your vote. If you would like to know the derivation of the equation I have used, feel free to contact me.
tl;dr – contract not as sweet as purported, and wasn’t all that sweet to begin with.

- Hiller

 

Mr Hiller's email address is ixtapalapaquett@gmail.com









14 comments:

Anonymous said...

the city and the uft colluding against teachers,
shocking

Anonymous said...

Well, I'm not an accountant either. So, wouldn't it have been a smart idea to get the relevant data used by the City and the UFT to check their figures before claiming it wasn't right? You already state at the bottom of your piece that you don't like the contract.
Science, or math should not be biased. It should be based on facts. Do you have the facts? Or, do you have a guess? If guess, please don't pass your material off as the former.

I noticed that... said...

In yesterday's Post, the article "Moody's issues warning for de Blasio Budget" states the following:
"They also revealed for the first time that the total cost of the teachers’ contract to city taxpayers will be $8.9 billion through 2021.

Those costs are offset by $2.9 billion in health care savings – for a net cost of $6 billion, they said."

Can someone PLEASE explain the so-called offset of $2.9 billion in health care savings? Here the numbers are not jiving!!


Chaz said...

Anon 8:49

I can't tell you if the math is exactly right but others have pointed out that the retroactive numbers don't seem correct and Mr Hiller's analysis seem to bear this out.

Anonymous said...

Chaz...

Great info....

Could you enlarge the font , I'm sure I'm not the only person that finds this hard to read.

Anonymous said...

The gig is up for the ATR's. Imagine being an ATR and bouncing around week to week in schools, going on the internet, watching videos, and having no responsibility? All to now be told that you have to go back into the classroom, and teach! Wow. The GIG is up and it's about time!

Steven Hiller said...

@Anonymous 8:49PM:

I take it you do like the contract. Would knowing that you are not really getting 4% + 4% change your mind? If not, vote yes. But I suspect that there are many who would like this information before making a decision. I wrote this for them.

"So, wouldn't it have been a smart idea to get the relevant data used by the City and the UFT to check their figures before claiming it wasn't right?"

It would have been very smart. The problem is that despite having to vote as early as next week, the relevant data you refer to has been hidden from the public. This forced me to investigate the matter on my own. Everything I have used is based off of data released by the UFT. The only new fact that I am bringing to the table is that we are not getting interest on our loan to the city. My claim is not about their figures being "right," but rather about them being willfully deceptive.

"You already state at the bottom of your piece that you don't like the contract."

The financial portion of the contract is most correctly described as a 3% + 3% raise with 5.5% interest (thus ignoring pattern bargaining), coupled with a 1.7% per year raise over 10 years (well below inflation/cost of living increases). You are correct. I do not like this portion of the contract.

"Science, or math should not be biased. It should be based on facts. Do you have the facts? Or, do you have a guess? If guess, please don't pass your material off as the former."

I believe I was clear in my letter regarding this matter. I have tried to be as transparent as possible (unlike the UFT/city). The equation I used to calculate the values in the table was sent to Chaz, but unfortunately did not come up in the post. I would be happy to provide it to you so that you may check my work. If your math is strong, I believe you will find that it is at least very close to being correct, and definitely correct regarding my claims about zero interest. This is the idea behind transparency, and is the reason why I asked Chaz to include my email. If you see an error, I will correct it. It has already been pointed out to me that the retro raises are in November, not May, and I am in the process of revising. I assure you, I am not trying to pull anything here. **@CHAZ ixtapalapaquetl, not ixtapalapaquett**

Finally, while bias is a serious concern in science, it is virtually nonexistent in mathematics. The math is either correct or it is not. Again, if you wish to check my calculations I invite you to do so. It should be eminently clear upon doing so that we are not getting any interest on a multi-year loan. But please know that I did not decide to vote no on the contract until after I finished my calculations proving we are not getting interest.

@All:
I will check in from time to time if anyone has any questions.

Anonymous said...

Mr. Hiller's math is correct. I have an accounting background, and I've said it before no interest on the money owed us is the cherry on this very inedible cake the UFT is trying to get us to eat. I say throw it in Mulgrew's face and get DeBlasio to bake a better one.

Anonymous said...

NYCDOE is a mismanaged carnival of stupidity that does not and is not serving the needs of the children of NYC evident in the hiring of these neophyte no nothing teachers and treating their most prized educators like second class citizens. This is only more proof that it truly is a mismanaged carvival of stupdity. Thanks baldwin i love the lingo

Anonymous said...

great info if it's reliable???

Chaz said...

I believe Mr. Hiller's data is correct but I would like to hear, from Gary Rubinstein, JD2718, and other high school or college Math teachers what they think.

JJ said...

Does anybody know if it is legal for them to deprive us of the retro pay if we choose to quit? Its work we already completed. How could they make us stay on in order to get that money from 2009-2014?

I noticed that... said...

Two days ago I posted the following and I still did not get a response to it. I feel that the "health care savings" will eventually come out of our pockets, but I need an expert to inform us on this issue.

"In yesterday's Post, the article "Moody's issues warning for de Blasio Budget" states the following:
"They also revealed for the first time that the total cost of the teachers’ contract to city taxpayers will be $8.9 billion through 2021.

Those costs are offset by $2.9 billion in health care savings – for a net cost of $6 billion, they said."

Can someone PLEASE explain the so-called offset of $2.9 billion in health care savings? Here the numbers are not jiving!!"

If someone can address this issue, it may also encourage others to vote NO on the contract.

Linda said...

Cross-posted comment from the ICE UFT blog:

The proposed salary schedule is unsatisfactory, both in amount and timing, in view of the fact that the inflation rate has been approximately 2.2% yearly.

A more appropriate salary increase would be 4% yearly for the life of the contract.

The first increase should cover the period from 11/1/09 to 10/31/10, the second from 11/1/10 to 10/31/11, etc.

Here's what it would look like for a teacher at the intersection of row 8B+L22 and column C6+PD, who is currently earning $100,049.

11/1/09 ... $104,051

11/1/10 ... $108,213

11/1/11 ... $112,542

11/1/12 ... $117,044

11/1/13 ... $121,726

11/1/14 ... $126,595

11/1/15 ... $131,659

11/1/16 ... $136,925

11/1/17 ... $142,402

11/1/18 ... $148,098

If anyone thinks that the above is out of line, look at viewer page 109 of the following to see how the teachers in Great Neck are doing:

www.bbp-action.org/wordpress/wp-content/uploads/2014/01/Great-Neck-Teachers-Contract.pdf

In addition, to a vastly improved salary schedule, it would be good to put the following matters on the bargaining table:

No additional evening conferences.

No forced placements for ATRs.

No separate disciplinary procedures for ATRs.

No merit pay or disguised merit pay.

Restoration of grievances for observation reports and disciplinary letters based on unfair or inaccurate content.

Lower the class sizes and strictly adhere to the contractual limits.

Reestablish the large high schools.

End co-locations.

Discourage the formation of new charter schools.

And what else?