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Go Home Paying Teachers Too Much? Or Too Little?

JONATHAN COHN MARCH 7, 2011

Paying Teachers Too Much? Or Too Little?

The debate over teacher pay is nothing new. And neither are the arguments about assumptions and methodologies. How do you assign a value to pensions and health benefits? How do you count the time teachers spend working outside the classroom or during summers? How do you factor in job protections and possibilities for advancement?

If you want a lengthy, detailed version of the debate, I highly recommend a 2005 exchange between economists Larry Mishel of the Economic Policy Institute* and Michael Podgursky of the University of Missouri-Columbia. Mishel argues that teachers have made less than other professionals of comparable education and experience, Podgursky argues they have made more. I think Mishel gets the best of the debate, in part because I’ve seen the EPI background material from which it’s drawn, although readers should decide for themselves.

But, at the risk of repeating myself, are we even asking the right question? Even if teachers do make more than similar professionals, is it enough to attract the best talent for a profession so vital to our country's future?  

Matt Miller, a former Clinton Administration official and TNR staff member, thinks the answer is "no." I've known him for a while and, I can assure you, he’s no raging leftist. But, writing in the Washington Post last week, he made the case for paying teachers more rather than less:

...we'll never attract the kind of talented young people we need to the teaching profession unless it pays far more than it does today. With starting teacher salaries averaging $39,000 nationally, and rising to an average maximum of $67,000, it's no surprise that we draw teachers from the bottom two-thirds of the college class; for schools in poor neighborhoods, teachers come largely from the bottom third.

Miller didn’t pull those numbers out of thin air. They come from a report that McKinsey & Company published last year and for which Miller was one of the lead researchers. The McKinsey team broke down teacher compensation, but with a twist: Instead of comparing how much teachers made relative to accountants, nurses, and other professionals, they compared how much teachers made relative to teachers in other countries. The U.S. did not stack up well:

And higher salaries weren’t the only difference. Other countries put much more emphasis on recruiting talented teachers:

Singapore, Finland and South Korea do many things differently than does the U.S. … . These nations make admissions to rigorous teacher training programs highly selective; some also pay for these programs’ tuition and fees, and give students a salary or a living stipend while they train. In addition, government closely monitors the demand for teachers and regulates supply to match it, so that teachers who complete this selective training are guaranteed jobs in the profession. They offer competitive compensation, so that the financial rewards from teaching suffice to attract and retain top third students given the dynamics of these nations’ labor markets. They offer opportunities for advancement and growth in a professional working environment, and bestow enormous social prestige on the profession. Officials in Singapore, Finland and South Korea view the caliber of young person they draw to teaching as a critical national priority.

The McKinsey researchers were careful to point out the limits of their research: Among other things, there’s no clear statistical evidence that recruiting teachers from top college performers actually improves educational results. But there’s circumstantial evidence from the other countries that McKinsey studied. Particularly if we’re going to hold teachers more accountable for results, as many reformers suggest we should, reducing their compensation would seem particularly ill-advised.

*EPI gets more than a quarter of its funding from labor unions. Make of that what you will.

Update: By the way, for more on the difficult choices lawmakers face on teacher pay, it's worth going back to read what my colleague Seyward Darby (the real education expert in these parts) had to say last summer.

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12 comments

I wonder how much our vaunted local control and state funding of education contributes to our backwardness in education. Suppose Iowa decided to upgrade it's K-12 education system to be as good as Korea's or Finland's. What would it benefit the state? We'd have to raise taxes, getting the state labeled as even more business unfriendly than it already is, and we know in advance that the best students we turn out would leave for the coasts after graduation anyway. Plus, you'd have to fight your way through the thicket of local school boards (who seem in my experience to care more about sports and buildings than about teacher qualifications). I think we really need to address this nationally.

- IowaBeauty

March 7, 2011 at 4:27pm

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When it comes to more specialized high school subjects, I've always thought schools miss the boat in terms of utilizing specialist knowledge. Many people with practical work experience as engineers, artists, mathematicians, historians, chemists, linguists, etc. who are looking for a change could make great secondary school teachers, but lack teaching credentials. They could truly teach what they know and offer practical perspectives that are bound to capture students' attention. But the teaching field often emphasizes the "art of teaching" at the expense of the subject being taught. I think this is a great waste of resources when there are many practitioners who would also make excellent teachers. There should quick and easy ways to bring these people into the teaching field.

- Claris

March 8, 2011 at 7:07am

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A teacher pension + health care is worth $45K per year in the Milwaukee School District. Health care for a single person in their 20's would run around $6K. This means the pension contribution is around $39K per year. Combined with the starting salary of $39K, this means that a teacher theoretically could opt of of their pension and have a starting salary right out of college of $78K with full health care benefits. What is the problem here? I don't know anyone with a pension anymore. PS. the author asks "how do you assign the value to pensions and health benefits?" as if this is some esoteric skill. Luckily, schools are required to compute this and publish it. And if they weren't, I'd hope to god the author could at least estimate it.

- seattleeng

March 8, 2011 at 9:00am

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Seattle engineer, what's your source for that? It sounds kind of...made up. Is that the present value of the pension, or the annual contributions, or what? From what I've seen, Milwaukee contributes 22.6% of the teacher's salary (including employer share of social security which is kind of weird to include, since all private employers pay this, but anyway)...average salary is 65,000... that sounds like an annual contribution of $14,690. Please check my math as I'm not an engineer. I can say that I was formerly a state worker. I took a job in the private sector (a step up) for an 8,000 raise, and have been granted about a 7,500 raise in the last year and a half. If I were to go back to a position equivalent to the one I have (not the one I had) at the state I worked at, I would take a 7,000 pay cut. Employer contributions to health insurance are similar (actually higher at the hospital but I consider some of that to be money recycled through the hospital as it and its employee doctors provide care). The difference is what the state would contribute to my pension. Yes, 7,000 dollars or so. Nowhere near 39k.

- ReganaD

March 8, 2011 at 3:54pm

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seattleeng: "What is the problem here?" The problem is that all the arguments over numbers don't really matter. If people aren't happy with the quality of those in the teaching profession, then whatever compensation is being offered isn't enough to attract those of the quality desired. So it's irrelevant whether we think teachers are overpaid or underpaid (unless we think the supply of teachers is inelastic, which would take some explanation).

- dsimon

March 8, 2011 at 4:26pm

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Ragana, if you search for the text (include quotes) "The MacIver Institute says average annual salary and benefits for Milwaukee Public Schools teachers tops $100,000" it will take you to politifact (#1 selection), which rates the statement as "true", including an average salary of $60K and $40K in benefits.. Posting links in this forum causes all sorts of problems. A teacher pension is worth MUCH more than $7K per year. Think about it: You work ~30 years for a pension, and then it pays you ~30 years of a percentage of your last salary AND health care. If your pension payout is $60K and $15K for healthcare for you and a spouse, then that is 30 years of $75K that the pension must pay you. That is $2.25M that is sitting in a bank someplace on your behalf when you retire. Yes, most that will get a pension are retiring millionaires.

- seattleeng

March 8, 2011 at 5:08pm

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dsimon writes: "The problem is that all the arguments over numbers don't really matter. If people aren't happy with the quality of those in the teaching profession, then whatever compensation is being offered isn't enough to attract those of the quality desired." two points. First, we spend almost 5X more per child today than we did 50 years ago IN TODAY'S DOLLARS. The results are mostly the same (little worse). More money likely isn't going to fix this. Second, if people aren't happy with their salary, then they quit. When good employees start leaving, the employer panics and give the good employee a raise, gives them the classes they want, etc. The good employee remains happy. Bad employees see this, and come forward and say "Hey, I'd like what Mr. DoGood just got" and the employer says "Sorry, Jim, we aren't happy with your performance. We want you to do XYZ and then we can talk again in a few months" And with that the bad employee improves OR realizes he's not up to it and leaves. Lather rinse repeat, and suddenly you have an effective work force. And then education trends start looking up. Way up. and people are happy to spend more money on education again because they are getting results. But that fantasy, which is how private companies work, only works if you can fire the bad apples and if you can penalize the salary of lousy employees and lavish financial praise on the good employees. Weird, eh?

- seattleeng

March 8, 2011 at 5:20pm

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seattleeng: "we spend almost 5X more per child today than we did 50 years ago IN TODAY'S DOLLARS. The results are mostly the same (little worse). More money likely isn't going to fix this." That analysis fails to examine where the money is going. A lot of it goes to special education requirements that did not exist 50 years ago. Without more, it's impossible to say whether more money would help the average student or not; you have to look at where the money is going. I can say with pretty good confidence that teachers are not making 5x more in today's dollars than they were 50 years ago. I can also say that NYC used to have chronic teaching shortages when it was a struggle just to have a warm body in the classroom, much less one that met teacher certification requirements; but after a concerted effort to raise starting salaries, that shortage mostly dissipated (though one can always argue causality). Second, the reply does not address my point: that if people aren't happy with those going into the teaching profession (generally among the lower third of college graduates), then people have to do something to make the job more attractive. That it's hard to get rid of present employees doesn't change that basic fact. (If it were such a cushy position, why aren't people battering down the doors for those jobs?) Personally, I think the trade-off should be better pay for less job security. But again, that's a different problem from getting higher quality people to apply in the first place.

- dsimon

March 9, 2011 at 2:24pm

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Do charter and private schools have better overall results than public schools when students of similar sociodemographics are compared? Not really. And they're not governed by tenure.

- beija_flor4

March 9, 2011 at 3:41pm

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DSimon, I'd take issue with the claim that teachers aren't better paid today. 50 years ago I am pretty certain most teachers that taught for 30 years were not retiring millionaires. Today, many if not most are, and some are retiring multi-millionaires via the pension. But you are right, that 5X improvement didn't go to the teachers. Where did it go? Nobody seems to know. all they know is it didn't help. I agree with your statement about making the job more attractive. The trade off SHOULD be better pay (by giving the pension contribution directly to the teacher each year) for less security. If you skip the pension, the money is there to pay a teacher $75K right out of school. A high performing teacher could readily be making over $100K after a few years in the classroom. Additionally, school systems could be much more friendly to letting specialists (engineers, doctors, lawyers) come and teach for a year or two as Claris noted. But the blocker with all of this is the union. All the money flows through the unions. Like an insurance company, they skim 10% off the top of the sizable pension and health care contributions. Asking the unions to NOT handle the pensions (because you'd pay it directly to the employee) is alike asking them to make half as much. They won't do it. PS. the health care book by TR Reid you'd recommended earlier was very good

- seattleeng

March 9, 2011 at 5:53pm

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seattleeng: "I'd take issue with the claim that teachers aren't better paid today." I'd take issue with that too. But as you rightly noted, that's not what I asserted. And 50 years ago, one might have been able to get away with lower pay because job opportunities for women were far more limited, with teaching as one of the few options available. A quasi-captive supply may have allowed for artificially low compensation for a while, but those times are over. "But the blocker with all of this is the union." Sometimes, sometimes not. There are good unions and bad unions, and even within the teaching profession there are progressive unions and more obstructionist unions. The union in DC was not cooperative with proposed reforms (though the heavy-handed approach by the administration probably didn't help things), but I believe the Denver teachers union has been helpful in introducing a more performance-based pay structure. http://www.mitul.org/issues/what-do-progressive-teacher-unions-do Also, many of our peer nations that outperform us have highly unionized teachers. While correlation does not mean cause, it makes me skeptical about claims that unions are necessarily a major impediment to student performance. Glad you liked the TR Reid book. As in health care, I think looking at what other countries do in education can be instructive, either as models or cautionary tales. (And it helps that Reid has a very easy writing style.)

- dsimon

March 9, 2011 at 6:52pm

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"Because novice teachers cost less to employ than more senior ones do, this bad policy requires handing out pink slips to more teachers than is necessary." Mr Cohn might have added other costs associated with more senior teachers - vesting in a pension plan for example. Yes, it would seem awfully tempting to fire older teachers and keep the young ones, when budget pressures mount (i.e., all the time). What will protect teachers from such malicious age discrimination? Perhaps faith in the competence and integrity of school administrators??? Anyone who knows a teacher knows that school administrators are often very poor public managers, indifferent or incompetent or both. When teachers join a union, it is to defend themselves against the arbitrary nature of the authority of these people. Clearly, there are some ineffective teachers, and some ineffective administrators -- but young teachers who leave the profession often indicate that it was unsupportive or even malicious behavior of school admistration that led them to seek other employment. These are the same people who will evaluate teacher effectiveness, and determine who should be laid off when the axe must fall? Think of how unattractive this is. As a matter of chance, your evaluation may be executed by a hack who is incapable of rendering a fair, accurate judgment of your teaching performance. And when times are tough, he gets to figure out whether the district will be better served by firing 20 senior teachers than by laying off 28 junior teachers. Why would anyone agree to such a reform? Oh, yeah. I forgot. It is going to be imposed on them. You can try offering bonuses for good performance, in return for scrapping tenure, but only the newest entrants into the profession are going to buy into that change. Everyone else knows better. My wife, a senior teacher herself, and I often discuss what is happening in the schools in which she teaches music - three elementary schools and the high school. She has her masters degree and oodles of experience. There are some teachers, hired just two years ago, that should never have been re-hired. The administration keeps re-hiring people who any diligent and prudent official would have sacked after the first year, if not sooner. Add to that budgetary incompetence; failure to conduct planning, procurement and hiring activities prior to the first day of school; non-enforcement of school policies / discipline, and a host of small, everyday examples of non-support for the needs of teachers by administrators (from scheduling to adequate classroom space to building security to janitorial help to basic supplies). It is a dismal picture, folks. I listen to the stories every day, and the problem is management. The problem is always management. And yet, these are the people who would make the tough decision about who to fire when costs must be cut. I have a better idea. Fix the administration first. Before you ask senior teachers to roll the dice, let's at least give them a chance at a fair outcome. Neil Neil

- purcellneil

March 10, 2011 at 5:27pm

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