Teachers Are Worth Less

Last year marked a deplorable record low pay level for American teachers. According to a new report, public school teachers earned 17% less than their college graduate peers who pursued different careers.

That’s the largest gap since 1979, when teachers’ weekly wages were 5.5% less than those of college graduate peers in other occupations.  The analysis adjusted for education, age, gender, marital status, geographic region and race/ethnicity. When benefits including insurance and pensions were factored in, the gap was still 11.1%.

Relying on Bureau of Labor Statistics and Census data, the Economic Policy Institute researchers found that the depressing negative trends of the past only continued to get worse.  Despite a worsening shortage of educators during a period of increasing demand, teacher pay relative to their peers continues to lag.

The pay gap is biggest for teachers between 35 and 44 years old, who earn 21.7% less than their peers in other lines of work:  male teachers get 24.5% less and non-union teachers get 25.5% less.  Male teachers have always suffered a huge pay gap, even in 1979 when they earned 22.1% less than comparable college graduates.

Note that this report compares weekly wages, so the shorter educational work year is not a factor.  Also remember that this latest study of public school teacher compensation relied on government data, so bias in observation sampling is unlikely. It is difficult to find fault with the report's findings.

The painful pay inequity trend may have contributed to other continuing issues, too. Teacher turnover rates are rising, more new and mid-career incumbents leave the profession, fewer enter the field and more retire. Even while school systems plead for more diverse teachers, the majority are still white women. The lack of significant numbers of black, Latino and male educators continues to remain a serious problem.  

Under these conditions of rising demand and short supply, conventional economic theory would expect a new higher equilibrium rate for classroom instructors. Teachers should be experiencing steady strong pay increases like those seen in the relatively prosperous health care and specialized STEM occupations. Yet, supply and demand economics seem to fail teachers. It is unclear why the free open market for labor is not operating as it should for educators.

Although public school teachers earned within 2% of other professionals few decades ago, their earnings have taken a severe tumble into steady relative decline. Teacher compensation that used to rate about a B- grade now struggles to stay around a D level, it seems, even when scored "on the curve." All else being equal, teachers today are considered worth less and less to the public bodies who employ them, even though their profession remains one of the most unionized in America.

If teaching is such a valuable field, why has this happened?  Their occupation has not been technologically obsolesced, outsourced or off-shored.  Are educators a unique self-selecting population more focused on intrinsic rewards than on economic compensation?  Perhaps they are either immune or indifferent to monetary challenges.  Could the quality of teachers be so bad that they are only paid the little they deserve?  Or is it hard to justify paying relatively good money to classroom instructors after years of cumulative deterioration in the excellence of American educational results?  Are school boards more tightfisted than ever?  Have teachers' unions failed their members?  Some or perhaps all of those reasons might be true.

Having allowed my teaching certificate to expire when more profitable activities drew my attention, I'm no longer close enough to the action to have an informed opinion.  On the other hand, maybe that's exactly what has happened to the rest, too.

E. James (Jim) Brennan is an independent compensation advisor with extensive total rewards experience in corporate HR management and all-industry consulting throughout the continent. A prolific writer (author of the Performance Management Workbook), speaker and frequent expert witness, Jim testified in many reasonable executive compensation cases. He also serves on the Advisory Board of the Compensation and Benefits Review.

Image "Teachers pay based on experience" by Quite Peculiar, courtesy of Creative Commons

Comments

[Ian Ziegler]

Part of the methodology is very worrisome to me.

They record that they are comparing full-time -teachers to all-full-time-college-graduates-less-teachers. Does that second category include college graduates that became CEO’s, doctors, lawyers, middle managers, (degreed) gas station attendants? I believe that “college graduate less teachers” is way too broad of a group to say that it’s a direct valid comparison to teachers. Utilizing the average further skews the representation for the latter group since I imagine several of the above are considered high-pay outliers which inflate the average.

Why not just compare the teachers to non-managing jobs (e.g. accountant, engineer, and clergy)? Those are all typically degreed jobs and the typical minimum requirements don’t imply employee management, furthermore specialized degree attainment or well-educated gas station attendants.

[E. James (Jim) Brennan]

Good caveats, Ian. Since that left-leaning foundation is tax-exempt, their studies and full methodology should be open for public inspection. I didn't drill that deeply into the detailed methods but since they used BLS OES/NCS and Census data, the "high end outliers" are minimized by the federal data collection methods that lump everyone above a top income threshold together. For example, when I had a regular income, BLS counted me in the same headcount bracket as Bill Gates and Warren Buffet. The OES report does not request or report actual dollars but only headcounts within income brackets: see http://www.compensationcafe.com/2011/07/why-government-salary-data-is-conservative.html .

They did seem to include degreed hourly workers, though, which would have balanced any tilt. But remember they are a DC think-tank that promotes political agendas and thus report selectively.

[Jules]

Is this the case for you get what you pay for? Parents has been lamenting over the state of American education. Would the best minds in education stay given how low their pay are?

[E. James (Jim) Brennan]

That could be one interpretation, Jules. Others would argue that teaching offers so much intrinsic reward that money should not be a meaningful factor compared to the emotional satisfaction inherent in the role. Having taught, I don't buy into that rather silly sweeping claim. It's easy to dismiss cash as an incentive for behavior when you don't need it.

The question of WHY they earn less still remains a challenge.

[E. James (Jim) Brennan]

Ouch. Just saw this current article from an academic economist http://www.cnsnews.com/commentary/walter-e-williams/dumb-american-youth that underlines the point Jules made.

[E. James (Jim) Brennan]

Another story today addresses chronic teacher absenteeism https://www.yahoo.com/news/m/594b94bf-4cdf-310d-be84-612e91d57f79/1-in-4-u.s.-teachers-are.html. Some of it is certainly permissible as sick pay, maternity leave and personal days, but it affects student achievement and perceptions about teacher effectiveness.

[Maryann Kuhn]

Jim,
You asked why teachers earn less. As an AP Microeconomics teacher, I've given this some thought. In most labor markets, there are multiple employers that will compete with each other for workers, and this competition will drive up wages. This happens most of course when there is a shortage of workers (low unemployment). However, there is only one employer in each state for public school teachers: the state. It is the state legislature that controls teacher wages (and they are not the ones doing hiring so they are removed from the needs of the districts). In economics, we call this a monopsony: one buyer of labor. Thus, the single employer can drive down wages because the worker's choice is either to take the lower wages or leave the field or the state (which is hard to do if you don't have another state's teaching license). As you have pointed out, many teachers do leave the profession. Others stick it out and accept the lower wages.

[E. James (Jim) Brennan]

Great answer, Maryann! Love term "monopsony" and glad you so properly applied it because it truly fits. Mostly.

In my consulting experience, the school districts had great latitude in setting wages; so teachers could and would gravitate to preferred employers. Believe the majority of states today still leave teacher pay decisions to school districts, while other states do set minimum standards which local school districts can exceed.

Regardless, centralized pay-setting can create terrible results.

Private schools draw some teachers away from public schools, too, despite often paying even less because they can offer superior working conditions.