Comparing public school teachers' wages and benefits

For years, the teachers' unions have been seeking public sympathy for the allegedly low wages that their members are paid. But studies that try to compare those wages with those paid to workers with similar positions or education are complicated and sometimes contradictory.

Now comes another one that comes out on the side that teachers aren't as bad off as the unions would have everyone believe. Pasted below is the full executive summary:

The teaching profession is crucial to America’s society and economy, but public-school teachers should receive compensation that is neither higher nor lower than market rates. Do teachers currently receive the proper level of compensation? Standard analytical approaches to this question compare teacher salaries to the salaries of similarly educated and experienced private-sector workers, and then add the value of employer contributions toward fringe benefits. These simple comparisons would indicate that public-school teachers are undercompensated. However, comparing teachers to non-teachers presents special challenges not accounted for in the existing literature.

First, formal educational attainment, such as a degree acquired or years of education completed, is not a good proxy for the earnings potential of school teachers. Public-school teachers earn less in wages on average than non-teachers with the same level of education, but teacher skills generally lag behind those of other workers with similar “paper” qualifications. We show that:

  • The wage gap between teachers and non-teachers disappears when both groups are matched on an objective measure of cognitive ability rather than on years of education.
  • Public-school teachers earn higher wages than private-school teachers, even when the comparison is limited to secular schools with standard curriculums.
  • Workers who switch from non-teaching jobs to teaching jobs receive a wage increase of roughly 9 percent. Teachers who change to non-teaching jobs, on the other hand, see their wages decrease by roughly 3 percent. This is the opposite of what one would expect if teachers were underpaid.
  • Second, several of the most generous fringe benefits for public-school teachers often go unrecognized:
  • Pension programs for public-school teachers are significantly more generous than the typical private-sector retirement plan, but this generosity is hidden by public-sector accounting practices that allow lower employer contributions than a private-sector plan promising the same retirement benefits.
  • Most teachers accrue generous retiree health benefits as they work, but retiree health care is excluded from Bureau of Labor Statistics benefits data and thus frequently overlooked. While rarely offered in the private sector, retiree health coverage for teachers is worth roughly an additional 10 percent of wages.
  • Job security for teachers is considerably greater than in comparable professions. Using a model to calculate the welfare value of job security, we find that job security for typical teachers is worth about an extra 1 percent of wages, rising to 8.6 percent when considering that extra job security protects a premium paid in terms of salaries and benefits.

We conclude that public-school-teacher salaries are comparable to those paid to similarly skilled private-sector workers, but that more generous fringe benefits for public-school teachers, including greater job security, make total compensation 52 percent greater than fair market levels, equivalent to more than $120 billion overcharged to taxpayers each year. Teacher compensation could therefore be reduced with only minor effects on recruitment and retention. Alternatively, teachers who are more effective at raising student achievement might be hired at comparable cost.

The details of the study by By Jason Richwine, Ph.D*. and Andrew Biggs, PhD** and published by the Heritage Foundation are here.

*Senior Policy Analyst, Empirical Studies, Center for Data Analysis

**  Resident Scholar at the American Enterprise Institute.

 

 

 

 

 

 

 

 

 

 

Comments

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  • fb_avatar

    Why don't you run the same numbers on politicians, preachers, CEO's and the like.?
    Whether you admit or not , the future of the nation starts in the schoolroom, so why compare a teachers salary to business people's salary who's contribution to the national good is purely accidental?
    Can you name any group who has more lifelong influence on the young, who has to juggle dedication with disrespect and having to form a union to maintain a liveable wage and a reasonable class size, then convince the PTA that Johnny needs the discipline that the teacher is not allowed to exercise in class.?
    If you are concerned about the quality of education I would suggest you make the salary more attractive and not rely so much on the dedicated, the less dedicated, and the minimum qualified teachers of our young.

  • fb_avatar

    I need to find out where retired teachers get these great health benefits. We don't get a dang thing.

  • fb_avatar

    Just to spoil your teacher bashing party retired teacher receive no such "generous" benefits. This study was done & paid for by The Heritage Foundation & included people from The American Enterprise Institute, two totally perverse conservative "think" tanks, though their both anti-intellectual no matter how hard they try to pretend that they have some brains. All they have is money, and they want to emptty the pockets & similarly the brains of evberyone & anyone, especially those organized & intelligent. I always knew there were these scared little hateful idiots out there just waiting to pounce when the going got tough in this country, but all you dopes out there who think a "man" like Dennis Byrne has anything meaningful to say, and that studies done by these billionaires & their phony foundations, then you deserve the consequences that you will face for being so scared & dumb. Actually, your grandchildren will probably be the ones facing the consequences of your stupidity, by most likely being some sort of slave or indentured worker.

  • Jeffrey,
    I was hoping that you would discuss the substance of the issue. Feel better now?

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