Published Online: April 29, 2008
Published in Print: April 30, 2008, as The Teaching Penalty

Commentary

The Teaching Penalty

We Can’t Recruit and Retain Excellent Educators on the Cheap

“How to Make Great Teachers” was the headline of the cover story of a recent issue of Time magazine. Forgive us for wondering why there wasn’t a subhead with three words that say it all: “Pay teachers more.”

We learned, in our recent analysis of pay scales for professionals, something that won’t surprise teachers, parents, school administrators, and, we would hope, education policy experts: Public school teachers earn considerably less than comparably educated and experienced people, and less than people in occupations with similar educational and skill requirements, such as accountants, reporters, registered nurses, computer programmers, members of the clergy, and personnel officers.

Compared with these professionals, teachers earn, on average, about $154 less a week—or 14.3 percent less—than people in these other learned, but not unusually lucrative, professions. This teacher pay penalty, in effect in all 50 states and the District of Columbia, ranges from more than 25 percent in 15 states (Alabama, Arizona, Arkansas, Colorado, the District of Columbia, Kansas, Louisiana, Mississippi, Missouri, New Hampshire, North Carolina, Oklahoma, Tennessee, Texas, and Virginia) to less than 10 percent in only five (Montana, North Dakota, Rhode Island, Vermont, and Wyoming). Nowhere in this country, however, do teachers earn more than those comparably educated.

The economic disincentives for qualified people to become and stay teachers are so severe that the "pay penalty" should be a major concern of education reformers.

These findings are disturbing for two reasons. First, researchers agree that good teachers are the single most important factor in kids’ school success. Second, because the baby boomers are beginning to retire while their grandkids are crowding the classrooms, America needs to attract and keep a whole new generation of teachers—2.8 million over the next eight years.

So, how can we recruit and retain a new corps of quality teachers? In our new book, The Teaching Penalty, we offer compelling evidence that it can’t be done on the cheap. School systems used to rely on the fact that college-educated women had few career options open to them. But those discriminatory days are long gone, and salaries have been rising for both women and men in just about every profession—except classroom teaching.

Back in 1960, women teachers were paid 14.7 percent more than other women with similar educations. But that trend reversed, and by 2000, women teachers were being paid 13.2 percent less than their educational peers in other fields. Indeed, over the past 10 years the latter trend has accelerated; the pay gap that was a 4.3 percent shortfall in 1996 became a 15.1 percent chasm for all teachers by 2006—a growth of 10.8 percentage points. Teachers were bypassed by the strong wage growth of the late 1990s and, more recently, continued to lose ground while college-graduate wages stagnated.

The rising pay gap will make it difficult to recruit teachers—and present an even more daunting challenge in retaining them. For teachers starting their careers—those between the ages of 25 and 34—the 12 percent pay penalty today is only 0.5 percentage points larger than that of their peers in 1996. But for women who are experienced teachers—those ages 45 to 54—the pay deficit has grown by 18 percentage points over the same period.

Sure, some say that teaching is such a unique profession that it is impossible to compare it with other occupations. But our study took pains to account for the special circumstances surrounding teachers’ pay and benefits. Because teachers’ annual work schedules are different from those of other professions, we compared wages earned for a week of work, rather than the entire year.

Since teachers may receive relatively generous health insurance and retirement benefits, we took total compensation into account—and found that it narrowed the pay gap by just 3 percentage points in 2006. In other words, the 15 percent weekly pay disadvantage based on wages alone translates to a 12 percent disadvantage when you factor in benefits. That’s not enough to transform the big picture, or the big point: Teaching just doesn’t pay nearly as well as the alternatives.

The economic disincentives for qualified people to become and stay teachers are so severe that the “pay penalty” should be a major concern of education reformers. Twenty-five years ago, the landmark report A Nation at Risk famously declared: “If an unfriendly foreign power had attempted to impose on America the mediocre educational performance that exists today, we might well have viewed it as an act of war.” A quarter of a century later, we, as economists, can add: If we deliberately set out to design a plan to discourage the best-qualified people from becoming teachers and to drive away the most experienced teachers, the pay penalty teachers now face would be the perfect way to do it.

There is room for debate about how to create the economic incentives to recruit and retain a new generation of capable, qualified, and committed teachers for every school. There’s much discussion of premium pay for working in disadvantaged schools, higher pay in certain specialties, and bonuses for performance. The elephant in the room remains the ever-increasing pay penalty. We need to raise teacher pay across the board, and we need to do it now. In the world’s leading market economy, we cannot continue to pretend that the law of supply and demand stops at the schoolhouse door.

Vol. 27, Issue 35, Page 30

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