Friday, April 1, 2011

Dallas ISD offers incentive to noncontract employees to resign

In this article we see basic principles of economics at play. The effects of the hard economy are showing in many fields, especially in school districts. As a way to cut spending, DISD is offering incentive packages to noncontract teachers in order to persuade them to resign. DISD is offering these noncontract employees fifteen percent of their annual salary (up to $10,000) to leave the district. These noncontract employees include food service workers, teaching assistants, central administration and other support staff. DISD which is facing major budget costs hopes that this incentive deal that costs up to 2 million dollars will keep them from having to spend significantly more to keep these employees on staff. DISD has already made a similar deal with contracted teachers which ended up costing over 6 million dollars but saved 45 dollars based on yearly salaries. Here, we can see the importance of incentives when making financial decisions. The opportunity cost of DISD to lose so many teachers is that they will not have as many people capable of doing different jobs but based on their decisions it is apparent that they put a higher value on saving more money in the face of major state funding cuts. We can also see it from the teacher’s point of view. They teacher will be more likely to resign if they are offered something in return. Because the teachers are being offered money to leave they might find that they are in need of that money now and would be more willing to take the package. Other teachers may find that 15% of their yearly salary is not going to be enough for them to live on while looking for other teaching jobs that are getting increasingly harder to find. Incentives play a huge role in making large financial decisions.

http://www.dallasnews.com/news/education/headlines/20110331-dallas-isd-offers-incentive-to-noncontract-employees-to-resign.ece

2 comments:

  1. I agree that DISD is obviously saving a lot of money by persudaing teechers to resign, and also it seems that it is in some teachers' best interest to resign. But I wonder how DISD will handle the resizing of classes and if the teachers who stay will be paid more because they will most likely be teaching more classes or if their salary will stay the same? Also how do the people of Dallas who send their children to these schools feel about this decision? The purpose of education is not necesarily profit, but to educate future generations. Is there no other way to help these schools save money and not have to get rid of so many teachers and staff members?

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  2. Yeah i think that downsizing any part of education can potentially be a big problem because it is so important. I think that the schools are doing this not to make a profit but to be able to function despite the federal budget cutbacks. I think that being in private school has kind of made us oblivious to the many problems in public education. Schools have to be really budget oriented when deciding how to spend their funds. Without these salaries that these teachers would require they would be able to spend it in other ways that they feel would be of greater benefit. Obviously having more teachers is a valuable opportunity cost but saving that money must outweigh the loss of those teachers.

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