Tuesday, November 15, 2011

Public School Teachers Aren't Underpaid

I take anything about unions from AEI and the Heritage Foundation with a grain of salt, but I suspect that this report on teacher pay is directionally correct:

A common story line in American education policy is that public school teachers are underpaid—"desperately underpaid," according to Education Secretary Arne Duncan in a recent speech. As former first lady Laura Bush put it: "Salaries are too low. We all know that. We need to figure out a way to pay teachers more."

Good teachers are crucial to a strong economy and a healthy civil society, and they should be paid at a level commensurate with their skills. But the evidence shows that public school teachers' total compensation amounts to roughly $1.50 for every $1 that their skills could garner in a private sector job.

How could that be? First, consider salaries. Public school teachers do receive salaries 19.3% lower than similarly-educated private workers, according to our analysis of Census Bureau data. However, a majority of public school teachers were education majors in college, and more than two in three received their highest degree (typically a master's) in an education-related field. A salary comparison that controls only for years spent in school makes no distinction between degrees in education and those in biology, mathematics, history or other demanding fields.

Education is widely regarded by researchers and college students alike as one of the easiest fields of study, and one that features substantially higher average grades than most other college majors. On objective tests of cognitive ability such as the SAT, ACT, GRE (Graduate Record Examination) and Armed Forces Qualification Test, teachers score only around the 40th percentile of college graduates. If we compare teachers and non-teachers with similar AFQT scores, the teacher salary penalty disappears.

While salaries are about even, fringe benefits push teacher compensation well ahead of comparable employees in the private economy. The trouble is that many of these benefits are hidden, meaning that lawmakers, taxpayers and even teachers themselves are sometimes unaware of them.

Here are three slides I put together on this years ago: www.tilsonfunds.com/Teacherpay.pdf


That said, what should be done?  Slash teacher pay by 1/3?  Obviously not.  The key insight is that, even at existing pay levels, as a nation, we CAN attract super talented people into the profession – just look at Teach for America and the tens of thousands of prospective teachers it turns away every year.  As I wrote in my slide presentation: "The problem is how teachers are paid.  Certain teachers should be paid more, but only those who deliver high student achievement, are willing to teach in the schools with the greatest concentration of the most disadvantaged students, and teach subjects in which there is a teacher shortage such as math and science."  In addition, the pay system today is heavily tilted toward older teachers – both nearing retirement and in retirement.  Imagine how much more younger teachers could be paid if the pay system weren't so tilted toward unaffordable back-end-loaded defined benefit pension plans.  It's no wonder 50% of teachers leave in the first five years, yet the turnover among 15-year veteran teachers in NYC is close to zero (much less than 1% if I recall correctly because they approaching lifetime pension is much too valuable for ANYONE to leave).


Here's DFER's Charles Barone's take:


We think teachers are paid too little for what they are tasked to do but that far too little is expected of them compared with the task at hand. Paying them less won't help kids. Expecting more of them and paying them accordingly will, as we are seeing in Washington, one of the few [places] that showed gains on the [National Assessment of Educational Progress] scores released today


Public School Teachers Aren't Underpaid

Our research suggests that on average—counting salaries, benefits and job security—teachers receive about 52% more than they could in private business.


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