New Research – Public School Teachers Overpaid; A Bunch

Paul Richardson, November 14, 2011

Reference - “Study: Teachers Make Too Much Money” from Education Week. In the article Francesca Duffy reports on a Washington meeting this week where Biggs and Richwine (researchers at the American Enterprise Institute and the Heritage Foundation ) reported on their findings that on average teachers make 52% more than workers with equivalent skills make in the private sector considering pay, benefits and job security. They totally demolished Arne Duncan, Education Secretary’s assertion that teachers are “desperately underpaid.” I am really surprised that the researchers made it out of town without suffering harm. The researchers reckon that the overpayment nationwide amounts to $120 Billion a year. This puts it in the same ballpark as the savings the “super committee” is tasked to find in the federal spending over ten years. Yes, it is hard to take away something that people are used to getting but in this case it is both unfair and unaffordable. This is why a focus of the discussion was to promote the idea that states facing budget shortfalls should consider teacher compensation as a viable area for spending cuts. While this could be a fruitful area and could start addressing the unfairness to society of the current situation, we know from the states (Wisconsin et al) where even small changes in what teachers pay for healthcare or retirement plan contributions are attempted that it will require a lot guts on the part of state lawmakers with majority public support to make it happen. Richwine contended that the standard regression method, which compares teachers to workers with equivalent education and finds that teachers are underpaid, is flawed because it doesn't consider "unobservable ability." People going into teaching have lower SAT and GRE scores than people who pursue other fields, he said. Thus, in the case of teachers, "years of education could be an overestimate of cognitive skills." In addition, the education major itself is not as rigorous as other fields of study. Thus, this adds to the recognition of education outsiders over decades that an education degree is of extremely low value compared to other degree paths. It is essentially a “seat time” certificate. For decades those who fail in other college majors switch to education and become “A” students easily and

those who can’t get admitted to more rigorous studies start out in education from day one. This doesn’t mean that all educators are uneducated but the majority certainly are. They set the tone for the whole endeavor making any improvement virtually impossible as has been proven over decades. An example of critiques of the education schools and their graduates is Gary Lyons article in Texas Magazine, Sept. 1979. Lyons reported that half of the teacher applicants to the Houston Independent School District scored lower in math and a third of them lower in English than the average high school junior and he blamed the state’s sixty-three accredited teacher-training institutions for turning out “teachers who cannot read as well as the average sixteen-year old, write notes free of barbarisms to parents, or handle arithmetic well enough to keep track of the field-trip money.” He accused the teacher colleges of coddling ignorance and, “backed by hometown legislators,” of turning out “hordes of certified ignoramuses whose incompetence in turn becomes evidence that the teacher colleges and the educators need yet more money and more power.” Arthur Levine, then president of Columbia Teachers College (when he wrote his reports) in his three part critique of education schools starting with Educating School Leaders in 2005 reinforced Lyons’ criticisms of 26 years earlier. He pointed out the low SAT and GRE scores but also that administrators as a group had lower SAT and GRE scores than the teachers they were “leading.” He also bemoaned the lack of rigor as being related to universities, even those with good reputations, using education schools as a low quality diploma mill with lowering standards and admission requirements to support the levels of income needed to fund more important career majors at the universities. Back to the new research: They found that when teachers and other workers are compared by cognitive ability, Richwine added, "the wage penalty has essentially disappeared." Also, their research showed that when teachers left teaching to take private sector jobs their pay declined by 3%. Of course, the party line of the teachers unions is that teachers are constantly tempted by higher pay in the private sector, which is perhaps true for some teachers but not for the average teacher.

It should be no surprise that the biggest component of the overpaid reality lies with the extremely generous benefits that teachers receive which are not available in the private sector. Fully funded retirement plans with defined benefit amounts unattainable without taxpayer subsidies because the market return assumptions are unrealistic are typically fully funded by the public. Also, healthcare costs are extremely low and the retirement healthcare benefits are also very expensive to the public but virtually free for the teachers. I believe that this “free ride” on the taxpayer’s dime is unsustainable and unproductive. It contributes to a view of things within education circles that is totally unrealistic. It results in false sense of entitlement related to believing the conventional wisdoms of educators. That is, “we are doing a great job and are working incredibly hard.” Norman Augustine in his “Is America Falling Off the Flat Earth?” points out that if American educators adopted a goal to be “average” in the global education panacea they would need to improve a lot. The reality is that our education system is performing abysmally and the amount we spend on it is not helping at all. The payback on investment is atrocious. Worse though is that millions of kids are given “amputated” futures year after year because educators live in a dream world with no sense of reality or responsibility while their enablers the education schools and too many politicians find benefit in continuing the scam.

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