After a failed attempt at a school field trip, which appears to have caused the apparent abandonment and brutal beating of the student Üter, Edna Krabappel calls an emergency strike on behalf of the Teachers' Union of Springfield Elementary, to protest against Principal Skinner's miserly spending on school supplies and activities, having resorted to using banned textbooks for teaching and ground up newspapers and gym mats for cafeteria food. Skinner refuses to budge on his financial cuts, explaining that the schools incredibly low funding leaves nothing to be discussed. The teachers are finally driven to strike when Bart makes the situation worse by talking to Skinner and Krabappel separately, telling them that the other party believes them to be pushovers.
As the teachers' strike results in the closing of the school, the various student characters respond to the sudden turn of events in their own ways: Lisa becomes increasingly obsessive in her desire to be graded, Milhouse is forced by his parents to take private tutoring lessons (which improve his education), Jimbo Jones finds himself immersed in the intricacies of daytime soap operas with his mother, Dolph and Kearney become easily bored with video games, and Bart revels in his newfound afternoon freedom and annoys many Springfield citizens. In particular, Bart does what he can to keep the union and Principal Skinner at odds with each other. The two sides are at an impasse; the union wanting a restoration of funding and Skinner maintaining that even with the spending reductions he has made, government budget cuts have squeezed the school dry.
After some prompting from an exasperated Marge Simpson, the parents of Springfield eventually decide to take matters into their own hands, and recruit volunteers from the community to take over as temporary teachers. This turns out to be even worse for the students than before the strike, especially as Marge becomes Bart's new teacher after Skinner learns he has chased away previous substitutes including Moe and decided he needed use her to keep Bart in line. Jasper becomes Lisa's new teacher and gets his beard stuck in a pencil sharpener, which makes her worried about not being able to get into her dream school Vassar College. Due to Marge's excessive mothering of Bart, he grudgingly resolves to force the strike negotiations forward. Together with Milhouse, he tricks both Krabappel and Principal Skinner into entering Skinner's office, which he then locks behind them. After spending several hours trapped together "like prisoners" in their own school, the two are mutually inspired with an idea to create extra revenue for more school spending. Things return to normal with the old teachers in charge, but with the school cloakrooms having been rented to the Springfield Prison. Each classroom now features several full prison cells at the back, which have the added benefit of keeping the more troublesome students in line. Snake Jailbird makes a deal with Bart to get him out of prison, promising him to "make it worth your while", to which Bart responses shortly afterwards "I'm listening".