Sunday, October 14, 2018

Apartment prices in Brooklyn Have Risen Over 6% - So, How Does a 2% Teachers Pay Raise Cut It?

The United Federation of Teachers is rushing through with approval of a new UFT-DOE contract. It released the details Friday afternoon and the delegates voted on it that night. It contains only a two percent raise when it would start in February 14, 2019. But teachers in New York City are facing costs increases far greater than that. Younger teachers, a large proportion of the teaching workforce are facing an even greater burden.

The contract contains increases after the first 2 percent increase of 2.5 percent, and then 3 percent. However, there are several months of no increase in pay. So, over the life of the contract, until Sept. 13, 2022, the increase is actually just 1.94 percent annually.

Housing costs have been increasing at far greater rates than the 2, 2.5, 3 percent increases. Curbed in summer of last year reported that rental prices in New York City, in the bottom fifth tier of rents, had increased 4.9 percent since 2010. Overall rents increased between December 2009 and June 2017 at an annual rate of 3.9 percent.
High rent rates are forcing renters to put increasing percentages of their income into rent, squeezing out payment to other essentials needed for a sound financial future.
“As New Yorkers—particularly the lowest earners—are forced to dedicate more of their monthly income toward rent, it becomes extremely difficult to save for necessities like healthcare and education, or a down payment on a home.” --StreetEasy senior economist Grant Long.
For those teachers actually able to enter the apartment buyers' market, increases are even steeper. Apartment prices in Brooklyn rose 68.1 percent from 2006 to 2016, an annual increase of 6.81 percent, more than three times the rate of inflation, the Brick site reported in February 2017. Prices for the same period for Manhattan apartments rose 63.8 percent, for an annual average of 6.38 percent.

Greater strain on millenial teachers

Newer teachers are paying back loans on tuition rates that have grown at higher percentages than an oft cited current 2.2 percent interest rate. Of course, rates vary from teacher to teacher, by which college they attended and by what the tuition was while they attended, but it is important to contrast that 2.2 figure against overall averages.

The DOE prefers to recruit its newer teachers from the more elite schools. The tuition increase at the top 50 private institutions for the 2017 to 2018 academic year was average of 3.6 percent.  As USA Today noted, several institutions increased their tuition (forming the higher end of that average) at even higher rates. Lehigh University raised tuition by five percent in that year. Cal Tech increased its rate by 4.94 percent.

In fact, across the board, college tuition rates rise at rates higher than the general inflation rate. One former administrator noted that colleges raise rates by measuring tuitions against Higher Education Price Index (HEPI). Tom Lindsey added, "Between 1985 and 2011, average tuition nationwide increased 498 percent—more than four times the rate of general inflation (114 percent) as measured by the Consumer Price Index (CPI)."

All in all, younger teachers are paying back college loans that are greater burdens --even adjusted for inflation-- than amounts paid by teachers entering the teaching profession ten or twenty years ago. Teachers need to demand more from the UFT and the DOE.

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