UPDATED: Newark's Teachers Get Screwed on Merit Pay

UPDATED BELOW

The editorial board of the Wall St. Journal may be clinically insane, but Lisa Fleisher at the education desk is paying attention to important stuff:

Newark, in a first for a large New Jersey public-school system, has given out bonuses of up to $12,500 to its highest-rated teachers, inaugurating a controversial merit-pay program being watched across the nation. 

A group of 190 Newark teachers learned last week they would receive bonuses, paid for through the foundation started by Facebook founder Mark Zuckerberg. About $1.4 million in bonuses were given out to teachers: $5,000 for being rated highly effective, another $5,000 for working at a poorly performing school and another $2,500 for teaching a hard-to-staff subject. Those included certain math, science and language subjects. 

About 5% of the 3,200-member teaching force got the money, one of the more contentious parts of the contract approved in November by the Newark Teachers Union. Eleven teachers received the top bonus of $12,500. [emphasis mine]

That's right: about one-third of one percent of the Newark teaching corps got the vaunted $12,500 bonus that so enchanted the punditocracy. I guess this is what Chris Christie meant when he said he wanted to pay "good" teachers more: if you happen to be in the top less than 1%, as judged by an arbitrary and secretive system, you get some money. Everyone else working hard and serving Newark's kids can go take a flying leap.

Notice also the total amount of money involved: $1.4 million over one year. That was far less than was promised at the time the contract was announced(* see below):

Newark, N.J., schools reached a tentative contract agreement with its teachers' union today, and one of the contract's major features — merit bonuses — will be funded with up to $80 million from a foundation managing Facebook CEO Mark Zuckerberg's massive donation to the district.

[...]

While the exact appropriation for the merit bonuses can't be determined until they are issued, [Newark Teachers Union President Joseph] Del Grosso said the foundation's contribution could total around $80 million over the next three years. The district proposed using the foundation's money for the performance bonuses and Del Grosso didn't negotiate directly with the foundation, he said.

"I'm not for being an obstacle to people being paid," he said, referring to the teacher bonuses.[emphasis mine]

At the rate that merit pay is being distributed right now, there will be a total of $4.2 million in bonuses over the life of the contract. That would be a little more than 5% of what was promised last fall.

But let's live in the land of the Merit Pay Fairy and pretend that this deal significantly improves teacher effectiveness, something that has never happened before. If 190 "excellent" teachers earned $1.4 million, how many teachers would have to earn $78.6 million over two years at the same rate? My back of the envelope calculation is that the money is being distributed right now at the rate of $7,368 per "excellent" teacher.

Which means that in order to pay out all of the $80 million Del Grosso said was available, the district would have to identify 5,144 additional teachers in each of the next two years. This, of course, is impossible in a district that only has 3,200 teachers.

Now let's suppose Del Grosso and the press got the figure wrong. Let's suppose there's only one-quarter of the money available for merit pay: $20,000,000. That would mean the district would still have to find another 1,072 "excellent" teachers next year: about 40 percent of the teaching force would have to get bonuses.

Does anyone in their right mind think that merit pay will magically transform Newark's teachers so that eight times as many will be classified as "excellent" next year? And stay that way for another year?

This is beyond absurd. What's happened here is a betrayal of trust so deep and so pernicious it boggles the mind. The very small amount of money that was distributed this year, compared to what was promised, is proof that the district has no intention of following through on their end of the bargain. State Superintendent Cami Anderson, NJDOE Commissioner Chris Cerf, Governor Christie, and Mark Zuckerberg have clearly broken their promise to Newark's teachers. 

Teachers in Newark trusted that the people in charge of the schools were bargaining in good faith; evidently, they were not. After one year, it's clear the teachers of Newark will not get more than a tiny fraction of the money they were promised.

Which begs a question: if the teachers aren't going to get all that merit pay money, who will?

Er... um...

Well... I think... eh...

Hmm... let me think...

What was the question... sorry, can't hear you, gotta go...

* UPDATE: The Memorandum of Agreement between the NTU and the Newark district, dated October 18, 2012 and posted at NJSpotlight, calls for an "allocation of up to $20 million" for "rewards," meaning merit pay bonuses. So there is an obvious discrepancy between Del Grosso's interview, where he claims $80 million is available for merit pay, and the memorandum. This is an important point and I apologize for not including it in the original post; I'm left wondering, however, why this discrepancy was never reported (so far as I know).

In any case, this would make my second calculation the one on which to base on the memorandum. But I should also point out that many veteran teachers opted out of the merit pay system. Here's an update from Fleisher's blog:

The new contract approved in November by the Newark Teachers Union was a big leap of faith for some teachers. The district and union agreed to allow some teachers with advanced degrees to opt-out of the new pay scale, and for some it made more financial sense to stick with the old pay system. Only about 20% of the 1,300 teachers with masters and doctorates chose to try out the new system. Newark superintendent Cami Anderson told NJSpotlight she was happy with the figure. [emphasis mine] 

Again, back of the envelope says that's about 2160 teachers who either opted into the merit pay system or were forced. Use the same rate of merit pay disbursement as above: $7,368 per "excellent" teacher. If the rate of disbursement per teacher stays the same, about 58% of the eligible teachers would have to earn merit pay over the next two years to use up the $20 million figure in the memorandum.

So my point stands: the amount of money given in merit pay this year is way out of line with expectations teachers likely had based on both reporting in the press and with the memorandum of agreement.

UPDATE 2: There are some small discrepancies in reporting on the figures for the merit pay bonuses. WNYC reports the total amount as $1.3 million, and 17 teachers got the maximum amount of $12,500. Fleisher breaks down her reported numbers further at her blog. Again, the differences are small.

UPDATE 3: One of the sources of confusion here -- and that's for me as well -- is that the figure "$50 million" was thrown around a lot in reporting during the negotiation. For example (10/19/12): 

Pay for performance and peer reviews are radical changes -- but they also show what can be done with $50 million in private funding.

[...]

Of the $100 million in new money, almost a third will go to giving retroactive raises to teachers that cover the past two years when the evaluation procedures were not in place.

This will also be the first big ticket investment for Zuckerberg’s foundation, which in two years has doled out as much as $16 million, depending on who's doing the counting. But it has been a trickle so far, with foundation leaders saying the strategic planning has taken time.

If this deal goes through, it would be committing as much as another $50 million to the contract alone, most notably the bonuses -- a full quarter of the $200 million to be raised.

So, is that $50 million for bonuses, plus $30 million for retro pay? Or a total of $50 million, which means $20 million for merit pay?

NJ Spotlight clarified that later (11/16/12):

The fund created by Facebook founder Mark Zuckerberg to help Newark schools will contribute a little less than $50 million to the contract ratified this week for the city’s teachers, but not necessarily in the ways many expected.

The chief executive of the Foundation for Newark’s Future, Greg Taylor, said yesterday that the fund would pay roughly $18 million for the teacher performance bonuses that have been the centerpiece -- and the most controversial piece -- of the new contract.

But in some of his first public comments since the deal was ratified by union members on Wednesday, Taylor said $31 million of the total -- close to two-thirds -- would go to the far less glamorous retroactive pay for teachers to cover two years in which the 4,000 members of the Newark Teachers Union went without a new contract.

 But the Star-Ledger was more ambiguous (10/27/12):

This contract is unusually generous, thanks to about $50 million in private philanthropy. It treats teachers as professionals, and is likely to attract and retain the best of them.
Teachers should know that if they reject this deal, some of the philanthropic money will disappear. Also, when the contract goes to fact-finding, a state arbitration process, there is no way teachers will get this much money.

Again: I should have reported in my original post what the memorandum said; I hope my first update clears that up. But there are two points that remain the same:

1. There was a point in negotiations where the teachers were told there would be $80 million for merit pay.
2. Even if there is only $18-20 million for merit pay, the dispersal rate this year is way lower than what teachers would have reasonably anticipated.