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Home Publications Blogs Beat the Press Michelle Rhee's Failing Report Card

Michelle Rhee's Failing Report Card

Friday, 11 January 2013 08:07

Michelle Rhee gained notoriety as the chancellor of DC's public schools under Adrian Fenty's administration from 2007 to 2011. Her conduct in this position was one of the main reasons he was not re-elected. Among other things, she publicly took pleasure in firing large numbers of teachers and administrators. Incredibly, she also claims not to have realized that high stake testing would provide incentives for teachers or administrators to cheat on the scoring of exams. 

Since she left the DC school system she started a new organization, StudentsFirst, which was created to push for the sort of changes to the school system she sought to implement as chancellor. The organization received considerable media attention for a report card it issued on the public school systems in the 50 states earlier this week. While most of the items on the report card were part of an educational agenda of questionable merit (see Diana Ravitch's blog for specific critiques), one item had nothing to do with education whatsoever.

Rhee's report card gave schools a failing grade if teachers received a defined benefit pension (worse if it was backloaded). The school system gets an "A" in this category if teachers only had a 401(k) type defined contribution plan or a cash balance account.

Pensions are now and have historically been an important part of teachers' compensations. Teachers, like most public sector employees, are paid less in wages than workers in the private sector with comparable education and experience. They make up much of this gap with a better benefit package, including better pension benefits, than workers in the private sector receive.

Given this reality, it is difficult to see how students are helped if a school system replaces a defined benefit pension that guarantees teachers a specific level of income after they retire, with a defined contribution plan, where retirement income will depend on the teachers' investment success and the timing of the market. Since state governments don't have to care about the timing of market swings, only overall averages, assuming timing and investment risk is an important benefit that governments can provide their workers at essential zero cost. A defined benefit pension will make a job more attractive to workers than if the state gave teachers the same amount of money in the form of a contribution to a 401(k) account.

In short, Rhee's report card means that states get credit for making their teachers more financially insecure without saving the government a penny. This position might coincide with a business agenda to eliminate defined benefit pensions, but it is very difficult to see how it will improve our children's education.


Comments (13)Add Comment
written by watermelonpunch, January 11, 2013 8:26
Rhee's report card gave schools a failing grade if teachers received a defined benefit pension (worse if it was backloaded). The school system gets an "A" in this category if teachers only had a 401(k) typed defined contribution plan or a cash balance account.

I have to say it.

That's just stupid!
written by skeptonomist, January 11, 2013 8:33
Also see Bob Somerby (Daily Howler) for further information and links on Rhee.
written by Bart, January 11, 2013 9:16

Snake oil salesmen will always find a ready audience of suckers.
written by PeonInChief, January 11, 2013 12:49
Doug Henwood has a blog post on the "report card" and the school rankings based on it. The problem with it is that the policies Rhee advocates seem to bear little relationship to actual student outcomes. Louisiana, which comes in first on the "report card", ranks at the bottom on student achievement tests.

It appears that the "report card" simply reflects the policies of the funders, American Enterprise Institute and the Thomas Fordham Institute. I had never heard of Fordham, but discovered that their primary policy goal is the elimination of teacher's unions. Unfortunately Fordham's research has been described as "laughable" and "silly".
written by Amy, January 11, 2013 2:08
One quibble. A defined benefit plan is more attractive to employees for the reasons you mention regarding risk, even if the amount paid into both systems is the same. But employers typically don't pay as much into their defined contribution plans as they are required to pay into their defined benefit plans by their actuaries. So with DC plans, employees take the investment risk and with much less money to work with. Employers save a great deal of money at the expense of their employees both by providing inferior funding and shifting any risk.
Really?, Low-rated comment [Show]
Student Achievement Is Not on the Charter/Privatization Radar
written by Sinic, January 11, 2013 2:26
My daughter lost her position teaching at a California public school when Arnold Schwarzenegger laid off teachers, en masse. It took awhile, but this year she's teaching at a charter school. When her performance is critiqued, the fact that all of her (special ed) students are earning passing grades, is not mentioned at all - let alone as a sign she's being effective.

Of course a corporatist like Rhee wants to push 401(k) plans - effectively a salary cut - despite the fact that teachers on a traditional track/schedule are not paid for approximately 10 weeks. They have to put money aside during the term to cover the break, so naturally, Rhee wants them to have less in the way of financial resources. Class act.

Not knowing that the pressure inherent in having one's own career jeopardized because lower-income students, or English-Language-Learners are unable to pass a test designed for white children from upper-middle-class households would lead to cheating is like being shocked to discover that drug prohibition (requiring arrests to be made so that the prison system can be fed) contributes to corruption within police departments (whether because they start taking or transporting drugs or because they abuse their authority/frame people, etc. to maintain their numbers).

"Gee, I didn't know putting someone in an impossible situation over which they may have only limited control and in which their is a clearly implied threat to their economic security, would make them feel anxious and desperate enough to do "crazy" things to avoid facing the negative consequences." (I think this is especially true of the person in the situation feels the injustice deeply.)
written by Jay, January 11, 2013 5:19
I am amazed that Rhee doesn't have that much actual teaching experience. Improving education is complex. There are social, economic, and individual factors that all combine into influencing educational outcomes.

Standardized tests may be designed for middle class white people but anyone can pass them. The tests only scratch the surface of an education. It's essentially a test of minimum competence but it doesn't necessarily reflect the abilities of all test takers. A person in an environment that values education, a family that has the resources to provide access to knowledge, and an environment that motivates a person to have the confidence to learn is really a community effort.

The most damaging thing about social inequality is the lack of access to things that encourage self-learning. It leaves bright people in negative educational environments to compete with circumstances that takes an almost superhuman effort to overcome. The barriers of a negative educational environment--whether it's a bad school, poor parenting, or just an environment that diminishes a person's expectations for academic achievement are incredibly difficult to overcome.

Families mired in unemployment or stagnant incomes cannot afford to move better neighborhoods, collectively improve their own neighborhoods through an aggregation of individual achievement of financial security, or otherwise simply compete with families with excess disposable income to give their children an educational advantage. Money helps. Whether it's moving to a good school district, paying for supplemental programs, or providing an environment that shows the stability that is possible for children that work hard.

Cutting teachers salaries does nothing to address the lack of jobs and income redistribution that has undermined the success of the American family.

Rhee's background
written by waguy, January 11, 2013 6:44
Rhee does have a teaching certification and taught in a poor Baltimore elementary school for 3 years. From Frontline and Wikipedia it sounds like she became pretty effective, despite having 35 students (which is way too many disadvantaged kids to have in one class).

After teaching Rhee founded The New Teacher Project, a non-profit which received good reviews for its teaching training program.

She was a bit naive while DC school chancellor, allowing teachers to administer student achievement tests that would have an impact on those same teachers' income. Her attitude toward the teachers was a bit inconsistent with the attitude she had toward her elementary students. She believed her students were capable of more than they were achieving, which turned out to be true. Yet she failed to apply the same inspiration and assistance to her teachers. If they didn't perform (or didn't cheat to make it look like they were performing, as some of the teachers apparently did) she fired them instead of trying to bring them up to snuff.

Too bad Rhee didn't stick to the successful model of The New Teacher Project when she started StudentsFirst.
Rhee's background
written by Drstankus, January 11, 2013 8:53
She put tape on her students mouths and laughed about it later. There was bleeding from her students lips.

She should be disqualified from any endeavor involving children. That she has even the slightest influence in the methods used for teaching our citizens is disturbing.
written by MaryinChicago, January 12, 2013 2:24
You figured it out, CEPR: shifting from a pension plan to a 401(k) retirement plan "coincides with a business agenda to eliminate defined benefit pensions," but has nothing to do with improving public education. That's also true of Michelle Rhee's other "educational" goals: busting unions, handing millions of education dollars over to private equity capitalists funding charter schools, etc., etc. (Diane Ravitch, who for a time supported this version of education "reform," is definitely worth reading!)

As I commented on a story critiquing an op-ed in which Rhee and Joel Klein (who imposed similar "reforms" as head of the New York City Public Schools) touted their state ratings with a rather wrong-headed comparison to the painful injury suffered by Washington's quarterback in the playoff game last week, "grading" states on the basis of how slavishly they've adopted your own spurious "reform" goals is a little like a coach deciding which football players will be starters based on the extent to which they share his religious faith. It may make the coach feel good, but it's not likely to produce many winning games!
..., Low-rated comment [Show]
written by MB, January 14, 2013 6:18
About this:

"A defined benefit pension will make a job more attractive to workers than if the state gave teachers the same amount of money in the form of a contribution to a 401(k) account.

In short, Rhee's report card means that states get credit for making their teachers more financially insecure without saving the government a penny. This position might coincide with a business agenda to eliminate defined benefit pensions, but it is very difficult to see how it will improve our children's education."

Likely not reading it right, but does this mean that employers in general put the same amount of money into 401K accounts as they would for pensions? If so, then the difference in reliability for steady, predictable stream of income during retirement is NOT because employers are still paying cash for non-working employees? ---but because of the ways pension funds are invested plus the new contributions coming in via younger workers?

So if the employer is not really laying out new cash for old workers, then what burdens do they offload when they close down pension funds and steer employees into 401Ks? Is it the burden of administration over the long-term? Or do they lose the burden of risk for having to pay new cash for old workers if they mismanage the fund?

When experts sympathetic to labor talk about "raiding pension funds", are they referring to opportunistic gutting of the funds for the purpose of one-time gain to the raiders? If so, then the incentive for raiding pensions is just for that one big win?

The reason I ask is because your comment made me realize that I never really considered how much "extra" cash my employer spends on my retirement benefits, beyond "the match", nor realized that they could be spending the same amount of money on either instrument, but that one is just structurally better than the other in terms of reliability and they've chosen the least reliable one for the same amount of money. I assumed that pensions require much more direct cash spent by employers over a long time, but 401Ks require less cash from them and only for a brief, limited time. And that may be the case but I've misread your comment.

For example of the state of confusion, during Bill Moyers interview with Paul Krugman, they showed video of Lloyd Blankfein telling the American public that we have to reduce our expectations about funded retirement from Social Security 'for 35 years after working 25 years'---because we're projected to be too expensive for living longer than retirees in the 1940's. So...it's confusing. Resent-speak is very persuasive because, on the face of it, it does seem logical to believe that we're all aging locusts eating up the tasty, young harvest. But if financial instruments can be designed for long-term sustainability, then most of us really don't appreciate that fact because it does just seem like magic more than math.

This resentment over perceptions about what seems logical, but not factual, also works against paid parental leave in the US. From my friends who live overseas, my understanding is that in those countries parental leave is paid out through the same mechanism as unemployment benefits---not from employers paying full or partial salary to non-working employees with babies plus additional salaries for temps who fill-in. But I think most people believe that paid parental leave means that employers have to pay twice as much to cover the absence of one employee due to one new baby. So we all believe that it is too expensive and therefore just not possible.

Same thing with health care. And Michelle Rhee sounds amazing when first hearing her talk---her logic sounds very satisfyingly convincing. Who cannot support removing bad teachers from the classroom? Then reality turns out to be different and becomes an episode of Fronline.

Ok! That was long question/comment. Not seeking direct answer, mostly wondering/thinking.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.