The Teacher Salary Myth -- Are Teachers Underpaid? https://www.forbes.com/sites/warrenmeyer/2011/12/22/the-teacher-salar...

The Teacher Salary Myth -- Are

Teachers Underpaid?
Warren Meyer Contributor
I write about business, economics, and climate change

This article is more than 8 years old.

It is one of the most commonly held bits of conventional wisdom in this country:
that teachers are grossly underpaid, and further that many of the bad outcomes in
public education are directly attributable to low teacher compensation. One hears
this everywhere, from cocktail parties to TV talk shows -- but is it true?

I first wrote on teacher compensation back in May of 2005. That article, still
lurking out there on the search engines, continues to generate a good portion of
my mail. Given that so much of that feedback has been ad hominem speculation
on my motivations, I suppose I should be explicit about these this time around.

I have zero problem with anyone and everyone getting the highest wages they
can. Power to you. I am not even one of the many who criticize the pay of top
athletes or performers, mainly because I always have a choice: If I believe they
are charging more than they are worth, for a game or a concert or a movie, I
simply don't go.

But it is for this very reason that I am suddenly scrupulous about public teacher's
pay -- because I don't have that choice. The government enforces a school
monopoly in which I have to pay for the public schools, whether I have kids in
their schools or not. I am thus required by law to pay public school salaries.

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Public school teachers consume a large portion of state and local taxes.
According to the 2010 census, public school teachers and instructors in primary
and secondary schools (ie ignoring colleges) constitute 30% of the 14.8 million
state and local government workers, and if you throw in public school
administrators as well as higher education the total rises to over 50%. No other
category of government worker is even close to this large. Police and fire
department employment, even when combined, is only a fifth the size of public
education.

The problem with salaries for government workers like teachers is that, in a
monopoly (particularly one enforced by law), the usual checks and balances on
compensation simply don't exist. Let's say a private school gives its teachers a big
raise, and has to raise its tuitions to pay for those higher salaries. Parents are then
left with a choice as to whether to accept the higher tuitions, or to look elsewhere.
If they accept the higher fees, then great -- the teachers make more money which
is justified by the fact that their customers percieve them to be offering higher
value. If they do not accept the higher tuition, the school withers and either
changes its practices or goes out of business.

But what happens when the state overpays for teachers (or any government
employee)? Generally, the govenrment simply demands more taxes. Sure, voters
can push back, but seldom do they win in a game dominated by concentrated
benefits but dispersed costs. On a per capita basis, teachers always have more to
fight for than taxpayers, and are so well-organized they often are one of the
dominant powers in electing officials in states like California. This leads to the
financially unhealthy situation of a teachers' union negotiating across the table

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from officials who owe their office to the teachers' union.

We might expect this actually to lead to inflated rather than parsimonious wages.
To see if this is true, we have a couple of different sources of data within the
Bureau of Labor Statistics (BLS) to help us. The first is the annual compensation
survey, for which the most recent data available online is 2010. This survey looks
at wages only, without benefits. Here are a couple of selected comparisons, in
dollars per hour worked:

Given that these are government jobs, this picture is obviously incomplete without
looking at benefits as well. Some of this is hard to value -- for example, the fact
that it is impossible to be fired no matter how incompetent from certain school
districts is a benefit that does not show up in any table. Nevertheless, we can look
at benefits like health and retirement plans, and for that data we have to go to a
second BLS database, the employer compensation cost survey. This is a
frustrating data set as it has an almost random breakdown of professions, giving
great detail on teachers and nurses without any breakout of doctors, engineers, or
other professionals.

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So what does this tell us? I generally dislike any discussion of prices or wages
being too high or too low. Individual prices or wages may be wrong for you and
what you value, but rates in the market are determined by having people who are
willing to both buy and sell at that rate. Unfortuantely, this is not the wage-setting
system that prevails for government employees, so we are forced into trying to
argue determinations of "fair."

So here is what I see from the data -- it is certainly hard to argue that teachers are
grossly underpaid. A good indicator is that government teachers are paid about
8% more than private school teachers, whose compensation packages are more
likley to represent a true supply-and-demand rate. Public school teachers seem to
be paid roughly the same, perhaps even a bit more, than other white collar, non-
management professionals. As they say on TV, I'd say this myth was busted.

But I have learned over the years of writing on this topic to expect a number of
rebuttals, and we might as well deal with these in advance:

You are forgetting teachers only get paid for 9 months of the year

Yes, on a total salary basis, teachers are paid less than other professionals because
they don't work as much. I can't really see the unfairness in this (I run a seasonal
business and don't pay people when the operations are closed). My guess is that
for many teachers this is a feature, not a bug -- that as many are attracted by
having the summer off as are harmed by it.

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Further, this is a management choice made by schools that could be fixed

instantly. I have always thought it was crazy that we invest billions in physical
and human resources for education and then let all this capacity lie dormant 25%
of the year. Even if kids only went to school for 9 months a year, their terms
could be rotated through the calendar so school assets are used all year long and
teachers could have a full 12 months employment.

Teachers do a lot of work at home

The BLS believes it has corrected for this in the hourly wages it publishes, but
what if it has not? Are teachers really more likely to take work home than are
other professionals?

Teachers are not paid as well as other Masters degree holders

This certainly depends on the degree. I am willing to believe they are paid less
than a Masters in biochemistry, but they likely earn more than a Masters in Mayan
feminism.

But my main problem with this statement is this: If we suddenly demanded that
everyone who fills potholes in roads have a masters degree in shoveling, does this
suddenly make road workers underpaid, or is it just a stupid requirement?

The degree requirements for teachers are part and parcel of the whole government
human resources process that puts certifications and credentials above
achievement and performance. I think there is a lot of very good real world
evidence that a multi-year masters degree in teaching does little to improve or
predict teacher performance, and in fact is probably a total waste in time
compared to advanced education in relevant subject matters like math or history.

If teachers are paid so well, why is there a teacher shortage?

First, it's not entirely clear there is a shortage at all. Certainly there seemed to be
a disproportionate number of aspiring teachers in the Occupy Wall Street

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movement who are disaffected because they cannot land the full-time teaching
position they desire.

Further, given that public school wages actually exceed private school wages, a
more likely explanation for any shortages is the obtuse certification system in
most public schools. After all, many professional groups (from lawyers and
doctors to real estate agents and hair dressers) are huge supporters of government-
enforced certification systems because they limit competition and artificially
increase wages.

The real problem is a shortage of good teachers

This may or may not be -- the teachers unions work very, very hard to prevent the
public from being able to measure the performance of the teachers whose salaries
we pay.

However, if one were to design a system from scratch purposefully to promote

mediocrity, one could hardly do better than the human resource systems used in
public schools. Government schools hire based on certifications rather than
ability, pay based on tenure rather than performance, and almost never fire a
teacher for any reason other than fiscal problems (and even then layoffs are by
tenure). Public school teachers must work in stultifying organizations that have as
many as one administrator for every teacher. Do talented people aspire to work
for the Post Office or DMV? Given the management of public schools, the real
question to ask is not why we don't have enough great teachers, but why we have
any at all.

Update (July 26, 2014): I normally don't return to stories that are three years old,
but there has been some sort of active campaign to drive commenters to this story
-- my guess is that this is linked to the recent Center for American Progress report
on teacher salaries. Welcome! It does not appear that these new visitors are all
actually reading the article, but are commenting based on the title or more likely
some third-party's summary of the article. But for what its worth, here are a few

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thoughts based on comments I am seeing for teachers visiting this article:

I will repeat what I said in the article: I do not begrudge anybody their
attempts to earn more money. I can't remember ever having a comment on
these pages about what people earn in private industry. If a company pays
too little and thus provides poor service with unmotivated employees, or
pays too much and raises prices beyond what I am willing to pay, I simply
do not give them my business any more. However, the vast majority of
teachers are government workers. They labor in schools I am forced by
law to pay for and, while I am not forced to send my kids there, I must pay
twice to send my kids elsewhere. I would have no comments on teach pay
were I able to have choice in schools, say under some sort of voucher
program, but the teachers unions and groups like the Center for American
Progress strongly support these monopolistic practices and limitations on
my consumer choice. So, if I am forced by law without choice to pay your
salaries, I am going to have something to say about them.

This need to speak out is particularly important because in many school

districts, there is no adversarial process that sets teacher salaries. Teachers
unions negotiate across the table with politicians who are elected primarily
with the support of teachers unions. In effect, in places like California
where no one can be elected without teacher union backing, teachers are
negotiating with themselves across the table. Taxpayers, students, and
parents are completely disenfranchised from this process. When Wall
Street bankers negotiate with politicians elected with huge Wall Street
contributions, organizations like the Center for American Progress are
rightly skeptical that anything emerges but crony largess for the bankers.
But how is the teacher pay situation any different in states where their
unions dominate the politics and contributions?

I will confess that it is wrong to discuss this topic just based on averages.
I believe there is an urban-rural divide here, where urban and particularly
suburban teachers are generally ahead of the curve while rural teachers are

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behind. I have not read all of the Center for American Progress report yet,
but my guess is that you will see a lot of rural state anecdotes to support
their point -- you will see examples from South Dakota and not San
Francisco. Worse, in the few quotes I have seen from the report, they have
compared rural teacher pay not to rural norms (where life is generally less
expensive) but to urban professional salaries. This is apples and oranges.
But for teachers reading this, ask yourself if it is fair that groups like the
NEA and the Center for American Progress try to raise money and
motivate their base with data from rural teachers, but then spend all their
time and money in big-state and urban politics.

Many commenters raise concerns about the amount of time teachers work
at home or over 40 hours. First, I believe the hourly data from the
Department of Labor that I used attempts to factor this in, using actual
reported hours worked by survey rather than just workweek hours.
However, I am willing to believe the numbers understate unpaid overtime
hours of teachers. However, do teachers really believe they are the only
professionals who work more than 40 hour weeks?

If you want to look to the #1 force holding down the resources available to
improve teacher pay, I would look to the huge growth of school
administrators. Today, in public schools there is nearly one administrator
for every one teacher. This is an administrative staffing rate ten times
what you will find in private schools. These administrators and their
rising salary demands are a remora draining resources that could go to
classroom instruction (teacher salaries, teacher numbers, books,
computers, etc). They are a dead loss to the system. They are worse than
a dead loss because they not only suck up resources but impose
bureaucratic procedures that make everyone else's job harder.
Unfortunately, they are represented by the teachers unions and their pay
and numbers are defended by your unions. Their pay increase requests are
sold based on the love the public has for teachers, but in fact their main
job is to make teachers' lives more difficult. Why? Why do you allow

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your union to promote these folks who are hurting you so badly?

One of the reasons the public opposes pay raises over time is that the NEA
and other groups oppose paying teachers based on capability. You want to
be paid like professionals, but you don't want to be held accountable for
your performance as are other professionals. The NEA currently supports
a system in which incompetent teachers essentially never can be fired and
all teachers are paid purely on seniority. Is that how you want, say, your
doctor to be paid? Would you be happy to know that it was impossible for
a hospital to fire a bad doctor, and that you had to pay whatever doctor
was assigned to you solely based on his age, without any reference to his
talent or history of malpractice?

Update #2: For comments of the type "I have no idea where this guy gets his
data", I think I can help. On the Internet, underlined bits of text, often in a
different color, are called "links". By clicking on these "links" with your cursor,
you will go to other sites. In the case of this article, the source of data are all from
the BLS, a part of the Federal Department of Labor. The "links" will take you
directly to the pages where the data was taken (though since 3 years have passed
the links may lead you to newer versions of the data). For those confused why the
national averages do not match your own personal salary, there may be one of two
issues

In a distribution of millions of values, all the values in the distribution

don't normally match the average. Some will be above and some will be
below. Though an average is different from a median, it is fairly safe to
assume that something like half of teachers make less than the numbers in
the article and half make above those numbers. As discussed in my
second update, if you are in a rural area, you are more likely to be in the
"below" category. If you are in an urban area, you are more likely to be
above

Some of the values listed, and I thought I carefully explained this, are not

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just cash compensation but include an estimated value for benefits and
pension contributions. Most people do not know what their employer is
paying per hour for their, say, medical coverage.

Warren Meyer

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