Michigan's share of the loot from the "edujobs" bill passed by Congress this week will be about $310 million. We're told that this will "save" 4,700 teacher jobs in Michigan. That's highly unlikely, for a couple of reasons.
First, most of the "4,700 layoffs" are administrative fictions, as explained here. Second, even if all 4,700 layoffs were real, the new money would divide out to $66,000 per teacher - but the teachers that districts hire back will almost certainly cost more than this.
The $66,000 would be about what the average first-year teacher in Michigan costs his or her employer. This includes an average starting salary of about $36,800; another $16,000 for health, dental, vision, life, and other insurance premiums; $7,200 or so for the state-run pension program; and FICA and Medicare taxes of about $3,000. The total approaches the $66,000 figure.
But the vast majority of teachers that districts hire back will not be complete rookies. Union contracts require the most senior laid off employees to be recalled first, regardless of an individual's cost or job performance. So the affected employees will already have logged time in the district, pushing their average salary at least a bit nearer the state average of $62,000 for all teachers. Add all those other mandatory expenses, and the employer's real cost climbs to as much as $95,000 per job. At that rate, if the "4,700 layoffs" were in fact real, the new money would only buy back 3,250 of these teachers.
These are just estimates, because the actual amounts vary widely by district. In addition, the calculations assume that districts will use all the money for strictly hiring teachers, but some of it probably will go to simply feeding the growing public school bureaucracy.
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.