Study: Teachers Make Too Much Money

By Francesca Duffy — November 02, 2011 4 min read
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At an education forum in Washington this week, the authors of a new study on teacher compensation discussed their surprising conclusion that, counter to popular belief, public school teachers are overpaid. Speaking before a wound-up audience at an event hosted by the American Enterprise Institute, the conservative-leaning think tank that published the study, the researchers said that when wages, benefits, and job security are accounted for, public school teachers are compensated 52 percent more than their skills would garner in the private sector.

As suggested in the opening remarks, one goal of the discussion was to promote the idea that states facing budget shortfalls should consider teacher compensation—a sacred cow in many states—as a viable area for spending cuts.

Jason Richwine, a senior policy analyst at the Heritage Foundation, another conservative-leaning think tank, and co-author of the study, dismissed Education Secretary Arne Duncan’s claim that teachers are “desperately underpaid.” He 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, Richwine said. When teachers and other workers are compared by cognitive ability, he added, “the wage penalty has essentially disappeared.”

See Also

For American Enterprise Institute writer Rick Hess’ take on this study, see “Commentary: Are Teachers Overpaid or Underpaid? Answer: Yes,” November 8, 2011.

For blogger Nancy Flanagan’s response to this study, see “Because I’m Worth It?,” (Teacher in a Strange Land Blog) November 3, 2011.

The AEI study also shows that when teachers switched to non-teaching jobs in the private sector, their wages tended to decrease by 3 percent. Conversely, when non-teachers went into teaching, their wages went up slightly. According to Richwine, that amounts to evidence that teachers are not underpaid. “It’s at odds with the standard refrain that teachers are constantly tempted by the promise of higher pay in the private sector,” he said. “That’s certainly true for some teachers, but for the average teacher, it’s not true.”

Richwine also pointed out that public school teachers on average make more than private school teachers, which he said could be taken as an indication that the public sector could pay teachers less. To support the point, he later said the “experience of the private school teacher is similar in terms of working conditions” to the public school teacher—an assertion that received an audible gasp from the audience.

‘Questionable Research’?

The AEI study also looks at teacher benefits, vacation time, and job security. Andrew Biggs, a resident scholar at AEI who co-authored the study, said that the Bureau of Labor Statistics information that is typically used to compare benefits “omits the value of [teachers’] retiree health coverage, understates public employees’ received defined-benefit pension plan, and omits the value of teachers’ longer vacation time.” When these factors are adjusted for, teachers do far better than they would if they worked in the private sector. Further, “public school teachers’ risk of unemployment is nearly half that of other relative employees,” said Biggs. “Job security has real value for people.”

Panelist Robert Costrell, professor of education reform and economics at the University of Arkansas, the final panelist, praised Richwine and Biggs’ research, saying their study helps to “debunk misguided work.” No panelists with alternative viewpoints were included in the event.

When asked during the question and answer session if the study included data on teacher attrition rates and how those might affect the value of the retirement benefits teachers actually receive, the study’s authors said they did not because of a “data access issue.”

One of several agitated audience members asked how it is possible that teachers are overpaid when most people in the profession spend long hours after school grading papers, leading extracurricular activities, and planning lessons. Richwine contended that many other professions require their employees to work from home after regular work hours as well. “It’s not supported by data, the idea that teachers work so many more hours than the average person,” he said.

Another audience member asked why superintendents and principals aren’t boasting about the profession’s high pay when recruiting candidates to teaching. Biggs replied, “There are various explanations—one is crude self-interest. If you’re at the top of an overpaid pay scale, you’re not going to advertise that.” Costrell added that schools actually do talk about their comprehensive benefits and salary packages. “And unions really talk about it,” he said.

In a press release sent out immediately after the event, American Federation of Teachers’ President Randi Weingarten stated that the AEI report “uses misleading statistics and questionable research.” The report’s statements on job security are “pure fiction,” she said, considering that 278,000 jobs in public education were lost during the recession.

“If teachers are so overpaid, then why aren’t more ‘1 percenters’ banging down the doors to enter the teaching profession?” Weingarten asked in the release, referring to higher-income Americans. “Why do 50 percent of teachers leave the profession within three to five years, an attrition rate that costs our school districts $7 billion annually?”

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