(Guest Post by Lindsey M. Burke)
My colleague at Heritage, Jason Richwine, along with co-author Andrew Biggs of AEI, has just published a groundbreaking new paper on teacher compensation. The authors find that public school teachers “make total compensation 52 percent greater than fair market levels, equivalent to more than $120 billion overcharged to taxpayers each year.”
As Bob Costrell noted (Costrell was the discussant at the public event at AEI earlier this week to present the findings) Richwine and Biggs’ research significantly contributes to the existing literature on teacher compensation. In doing so, it shatters three myths that have driven policy in the wrong direction for decades.
Myth No. 1: Teachers are constantly tempted to leave the classroom for high-paying private sector jobs. We’re told that teachers are tempted into higher-paying professions; that it is a teacher’s sense of commitment, not high compensation, which tethers them to the classroom. Teachers, as former AFT president Sandra Feldman once argued “are being lured to other professions with handsome salary offers.” The NEA’s Kim Anderson even responded to the Richwine/Biggs study by stating that “Talented individuals turn away from this rewarding profession because they are forced to choose between making a difference in the lives of students and providing for their families.”
For the average teacher, however, this isn’t the case. Switching from a non-teaching job to a teaching job increases workers wages, on average, by 9 percent; transitioning from teaching to non-teaching, by contrast, results in a wage decrease of 3 percent. As Richwine and Biggs observe, it’s “the opposite of what one would expect if teachers were underpaid.”
Which brings us to myth number two…
Myth No. 2: Teachers are underpaid. Richwine and Biggs’ finding that teachers are paid above market value runs contrary to what we so often hear – that teachers are, to quote Sec. Duncan, “desperately underpaid.”
While it’s true that public school teachers earn less, on average, than similarly credentialed non-teachers, Richwine and Biggs note that traditional skill measures, such as years spent in school or level of degree, do not lend themselves to an accurate salary comparison of teachers to non-teachers. The “wage gap” disappears when teachers and non-teachers are compared using objective measures of cognitive ability, as opposed to years of university education.
Beyond paper qualifications, comparisons of public school teachers to their private school counterparts provides more evidence that public school teachers are compensated above market value. The authors find that “With all observable skills held constant, public-school teachers nationally earn 9.8 percent more in salaries than private school teachers.”
But it’s the benefits that are the biggest factor. Biggs notes in NRO:
“The BLS benefits data, which most pay studies rely on, has three shortcomings: It omits the value of retiree health coverage, which is uncommon for private workers but is worth about an extra 10 percent of pay for teachers; it understates the value of teachers’ defined-benefit pensions, which pay benefits several times higher than the typical private 401(k) plan; and it ignores teachers’ time off outside the normal school year, meaning that long summer vacations aren’t counted as a benefit. When we fix these problems, teacher benefits are worth about double the average private-sector level.
“Finally, public-school teachers have much greater job security, with unemployment rates about half those of private-school teachers or other comparable private occupations. Job security protects against loss of income during unemployment and, even more importantly, protects a position in which benefits are much more generous than private-sector levels.”
When considering the benefits public school teachers enjoy – job security, health benefits, and plush pension packages – the “totality of the evidence” suggests that teachers are not underpaid, and are actually, overpaid.
Myth No. 3: We aren’t attracting enough teachers. Well, myth number three is actually a half-myth. During the AEI discussion, Costrell also pointed out that the median number of qualified applicants per teaching position is 15:1. So while there is actually excess supply, there is wide variation by field. While there are only four applications for every available speech and language pathology position, there are 129 applicants for every elementary (K-6 teacher) position.
Teachers should be paid fair market wages, but the current system prevents teachers from being rewarded based on their performance.
Research shows that teacher quality is one of the most important factors in increasing student achievement. Effective teachers should be handsomely rewarded for the impact they are having on a child’s education. By reforming compensation policies in a way that accounts for the abilities of great teachers to improve student outcomes, we will ensure excellent teachers are richly compensated, and mediocre teachers have a strong incentive to improve.
Jay P. Greene's Blog 
In response to the line:
“The “wage gap” disappears when teachers and non-teachers are compared using objective measures of cognitive ability, as opposed to years of university education.”
Duh…
Of course… If you had to deal with snot nosed little bastards your cognitive ability might dwindle some too! If teachers get paid so much to teach, then why don’t more people become teachers? Why does NYC have to pay $100K a year to get teachers?
Because it is a crappy job that nobody wants to do (unless you are slightly mental or have degraded cognitive ability)… especially when they could just sit in a bank and steal money from the American people. This job only takes a few years of school and a Mommy or Daddy with some pull.
Some of the teachers in our district did the numbers to see what they make an hour. The result…. $8.65 an hour.
And if you want to bitch and moan that teachers only work during the winter and have summers off..
Take a poll and ask how many teachers would prefer year-around schooling. I think you will find that most hate the 2.5 month break.
You wanna know who really makes too much money??
Cops and military personal…
Cops go to school for 6 weeks, in some states… and I won’t even go into cognitive ability here either.
military?
OMG!
I suggest you pull your head from your fat posterior and pull out your calculator to do the basic math skill to divide their pay by 24 hours a day. Most military folks are on the job 24/7 these days.
Thanks for participating and showing us all how nice it is to have to send our “little bastards” to people like you.
“Snot nosed little bastards?”
I’ll have one of the other 128 applicants please!
Lindsey-
I think this is important work in dispelling some widely held myths. My own position is that it is hard to know whether teachers are “underpaid” or “paid too much” since we lack a free market system. I understand that there are private tutors in South Korea who are paid like professional athletes, and that is for the best.
I don’t know how much Phillip of Macedon paid Aristotle to tutor his son, but if he had lived to watch his son’s conquest over most of the known world, he likely would have thought that he got a good return on investment.
The problem with the teaching profession in my view isn’t so much pay, as it is the utter lack of recognition of merit. I don’t think ambitious people go to law school because the average lawyer makes a decent wage, but rather because the awesome lawyers make awesome wages. If you are an awesome teacher you get paid according to a wage scale and start thinking about switching to an administrative track because the pay is better.
Instead of doing a study about it, those men should teach for one year. I think they’d change their tune pretty fast.
If only we could have people helping with solutions instead of wasting their time on stupid stuff like this. . .
For years, surveys have shown that teachers don’t leave the field because of money. Only unions purport that to be the case. Teachers leave because of the working conditions: Lack of good administration and school boards that help maintain discipline in schools; lack of supportive parents who collaborate with teachers on their children’s work; lack of competency among fellow teachers (having to make up for the lousy teacher who sent you students unprepared for the next grade level but who earns the same salary as you do); awful training that focuses on social engineering rather than content of subject matter; and being held accountable for poorly written tests that measure not only the present year but all the previous years’ learning (or lack thereof).
“The “wage gap” disappears when teachers and non-teachers are compared using objective measures of cognitive ability, as opposed to years of university education.”
I find this totally laughable. Using this as a measure, I can only assume that the general public is being royally ripped off by our elected politicians. Their cognitive ability is certainly questionable and yet there is not this endless cacophony regarding the “value” of their services. After all, we all know how indispensable and valuable their services are!
To those who think being a teacher is an easy way to make a buck, get in front of a classroom of 30 students for a school year. It’s easy; it’s financially rewarding; you have a short work day and you have tons of vacation time. What more could one ask?
Happy teaching!
Lindsey, please think about the negative responses. They are a light to the truth. I’m afraid your article nothing but more confusion. COgnitive abilities??? Oh please! I want to see for what cognitive abilities this study was giving us credit. I’ll give you credibility after you have taught in a public school for 6 months. I’ve worked in the public (18 years) and private sector (12 years). No private sector job has been as difficult or time consuming as teaching. FOr years I have watched Democrats ruin my profession by making it their lab for social engineering. Now Repubs are determined to pay us like lettuce pickers because that would be the fair market value.
News Flash: We collectively spend WAAAY too much on prisons, but Teachers make too much? Me thinks priorities are way off. Additionally, we have foreign wars draining billions, and again we are worried about teachers being over paid.
We just have glaring social problems all over the place, but because the Teachers are most visible, we envy them for being able to keep their jobs during a depression. I beleive once the old crop of baby-boomer age teachers retires, the money issues will not be as much of a big deal.
[…] Jay Greene’s blog, Heritage’s Lindsey Burke sums it all up quite well, “Effective teachers should be handsomely rewarded for the impact they […]
[…] Jay Greene’s blog, Heritage’s Lindsey Burke sums it all up quite […]
And the real world bears this out: Contrary to teachers’ insistences that they could earn more outside of teaching, we show that the typical worker who moves from the private sector into teaching receives a salary increase, while the typical teacher who leaves for the private sector receives a pay cut.
[…] Jay Greene’s blog, Heritage’s Lindsey Burke sums it all up quite […]
To ascertain whether public school teachers are really underpaid, consider first a comparison between the salaries earned by teachers in public and private schools. In providing instruction, private and public school teachers do similar work, but of course private school
salaries are funded by churches or school tuition payments.
[…] Jay Greene’s blog, Heritage’s Lindsey Burke sums it all up quite […]