Recruitment & Retention

Districts Are Raising Wages to Fix Shortages. Is It Sustainable?

By Mark Lieberman — February 07, 2022 11 min read
Illustration of hands reaching for dollar signs that are falling from the sky.
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School districts are rushing to raise wages for nonteaching positions like bus drivers, substitute teachers, teacher aides, cafeteria workers, and custodians, teeing up dilemmas for administrators and school business officials as they try to meet workers’ needs.

Increasing wages during the school year can cause headaches for school administrators, who suddenly have to find room in their tight annual budgets for unexpected expenses. Some districts have money in reserves that can fill an emergency need, but adding new long-term costs like higher wages could mean cutting other priorities, like an after-school program or a staff member; raising local taxes, which can be a tough sell in some communities; or lobbying lawmakers for more funds, which doesn’t always work out.

Acute staffing shortages are driving the increases. Many districts have open positions that need to be filled, and offering more money can lure more candidates.

But some districts are fretting over maintaining those salary bumps beyond this year. Competition from other nearby employers with more-flexible budgets is squeezing school budgets and hiring priorities even more than usual.

Some staffing shortages stem directly from the spread of COVID-19, with employees out sick or quarantining. Others result from a complex array of economic and social forces reshaping the broader American labor market, including an unprecedented surge of resignations, a bout of acute inflation, and a surge of attention on worker activism, including strikes and sick-outs.

Teacher salaries have been on the rise in recent years, thanks in part to the grassroots Red for Ed movement that shined a spotlight on low teacher wages in the years leading up to the pandemic. School districts are now racing to keep up on compensation for nonteacher positions that have long paid at or slightly above minimum wage.

Many districts in recent months have ratcheted up daily rates for substitute teachers, negotiated substantial pay increases with school bus drivers, and pledged to overhaul salary structures for vital positions like instructional aides and cafeteria workers that are proving difficult to fill.

The 61,000-student Chesterfield district in Virginia raised bus drivers’ hourly rate from $17 to $20.21 this school year, after seeing nearly 175 of its 500 bus driver positions unfilled at the start of the school year.

“We will never be able to compete with the salary market in business,” said Merv Daugherty, the district’s superintendent. “We know we go into education not to make millions of dollars, but we do want to support our families.”

In Polk County, Fla., six new warehouses including two from Amazon, have opened in the last three years, luring some classified school workers away to drive trucks or haul cargo from warehouses. More recently, the district has seen workers leave for jobs at Wal-Mart and local restaurants.

“A lot of those industries are paying sign-on bonuses which is very difficult for us,” said Jason Pitts, the chief of staff for the Polk County school board.

The district is currently short 80 bus drivers, and some custodians from one school are cleaning another school at night.

Here’s how some districts are approaching the tricky balance of increasing wages and ensuring long-term fiscal health.

Substantially higher pay for substitutes, but no long-term guarantees

Some districts are framing salary increases and other efforts to increase competition as temporary responses to a still-raging public health crisis.

In Spokane, Wash., substitutes get $200 per day during the state’s public health emergency. Once the governor ends the emergency declaration, the daily rate will return to $150.

The Dover school system in New Jersey last increased its daily rate for substitute teachers a couple years ago from $90 to $125. This year, the daily rate is $200, and on days with a high number of absences, the rate goes up to $250. Substitute teachers who are willing to commit to the same days every week at a particular school building regularly get that $250 rate.

The 3,500-student district devoted roughly $150,000 of its $12 million in American Rescue Plan funds to bankroll the substitute increases. Federal relief funds are temporary, though, and the district already established in its agreement with its employer unions that the substitute pay increase is a “temporary COVID rate.”

Upon implementing the increases, the district saw a sudden explosion of interest from more than 150 applicants. Most of them had a teaching certificate or a substitute teaching certificate, said James McLaughlin, the district’s superintendent.

McLaughlin hopes the substitute teachers who have entered schools recently will find the work rewarding enough to stick around. The district will likely prioritize increasing substitute pay on a routine basis going forward.

“It might not be where we are now,” he said. “It can certainly be more competitive than where we were.”

In Oklahoma City, substitute teachers this year are getting a $70 daily stipend on top of their regular daily pay: $80 for certified teachers, $65 for bachelor’s degree holders, and $55 for substitutes with just a high school diploma.

The district started out the year with a $40 daily stipend, but some other districts in the area raised their substitute pay to a similar level, forcing another increase to stay competitive. Funds from the federal CARES Act and American Rescue Plan are paying for the stipends. Those stipends will run out once the federal funding does, at the latest by the spending deadline of September 2024.

Brad Herzer, the district’s assistant superintendent of human resources, safety, and security, is optimistic that the district will soon be able to afford an increase in base pay for substitute teachers. After all, when full-time teachers cover classes that lack a substitute teacher, they get paid extra. Fewer uncovered classes means fewer overtime funds flowing to full-time teachers, and more room in the budget for paying substitutes.

“There is a number that will be a cost savings that can be then turned around and added into the base rates,” Herzer said.

Slowly raising wages to keep employees happy

The Weld County district in Colorado is comprised of three small towns on the Interstate 85 corridor. But most employees live in nearby urban centers like Fort Collins and Laughlin. They’re often lured away by employers closer to where they live.

The district employs roughly 150 teachers. On a given day, 10 to 15 might be out. Even before the pandemic, it wasn’t always possible to find substitutes for all of those absences.

This year, the district nudged its substitute rate up from $100 to $120 a day this year. Using federal funds for the increase didn’t appeal to Johan van Nieuwenhuizen, the district’s superintendent, who prefers to offer pay increases that are sustainable going forward. The district this year might have been able to afford a steeper increase, but “we have to project over at least a decade,” van Nieuwenhuizen said.

“It would be really not smart if you raise the salary and then two years later you have to reduce staffing because the budget doesn’t work out,” he said.

The district tries to give substitute teachers some control over the grade levels and school buildings they prefer. But its ability to compensate them for their efforts is constrained by the state’s school finance system. Thanks to the messy implementation of a 2000s-era effort to boost public school funding, the state currently owes districts $9.3 billion. For Weld County, that translates to a $20 million shortfall.

“We are expected to do more with less money,” he said.

In Florida, the state system for school finance constrains districts in a different way. The state controls local tax rates, which means districts have no way of knowing how much money they’ll have in the future. A substantial chunk of taxpayers are retirees, who are often reluctant to spend on public schools if their children no longer attend them.

“If I knew that we were going to see 3, 4, 5 percent of revenue increases over the next few years, it’d be easy to budget,” said Pitts, the Polk County district’s chief of staff. “But we may see a revenue decrease. We won’t know that until the middle of the springtime. If we’ve already given raises or increased staff, then it puts us at a huge disadvantage.”

The district this year increased its minimum wage to $11 an hour, trying to stay ahead of the state minimum wage, which will be $15 by 2025. Raising the district’s lowest-wage positions to the new minimum wage cost $25 million, leaving little room for a comparable wage increase for higher-paid positions.

“At the higher rates that caused a little bit of discontent from staff,” Pitts said.

Sustaining those wage increases may require cuts. The district is the county’s largest employer, which means layoffs carry tricky political stakes.

“Without that tax revenue, technology and efficiency is really the only other option that we have—doing things better with less manpower,” Pitts said. “We haven’t found the magic answer yet.”

Getting creative with budgets to address critical staff shortages

As the school year began, the Lincoln district in Nebraska was roughly 20 bus drivers short of its needed supply of 135. Some current bus drivers, as well as some trainees the district was lining up to fill gaps, decamped to drive buses for other higher-paying local employers, like a food bank and a grain distributor.

Dozens of students were arriving to school late each day. The disruption to instruction prompted the district to take what Liz Standish, associate superintendent for business affairs, calls an “extraordinary measure”—raising wages during the school year. Bus drivers now earn $23 an hour, up from $19.49.

To find the money for such an unusually expansive adjustment, Standish and colleagues had to get creative.

The district has long paid for in-house bus drivers as well as bus drivers that work for the district through an outside contractor. This year, the contractor was also struggling with similar staff shortages. Standish realized moving away from the contractor, which costs the district $700,000 a year, could free up funds to pay the in-house drivers a higher rate.

The district was also paying drivers overtime—$29.24 an hour—for the extra work they were doing to cover routes that the departing employees left empty. If the permanent wage increase led to fewer open positions, those overtime costs would go down enough to balance out the increased cost in the drivers’ hourly rates.

“We looked at it as a long-term shift for how we provide transportation services,” Standish said.

Even though the increased salaries are coming out of the district’s federal relief allocation, those emergency funds made a big difference. “If that stress had been put on the general fund budgets, I don’t know that this proposal would have come forward,” she said.

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The Wake County district in North Carolina also used the federal relief money to free up room in the budget for a broad suite of salary increases, which were long-awaited among employees.

In the five years prior to the Great Recession, the state of North Carolina gave all school employees a raise each year between 2 percent and 5.5 percent. From 2009 to 2012, those wages stayed flat. The state has implemented modest increases some years since then, but since the pandemic, they’ve flattened out again.

Inflation has soared more than 25 percent over the last two decades, but school employees’ wages haven’t kept up. In Wake County, instructional assistants in 2009 started at $11.28 an hour; now, the same position offers a starting salary of $11.80 an hour.

“We’re effectively paying our people less than we were in the mid-2000s,” said David Neter, the district’s chief business officer.

The state increased wages several times during the 2010s for state government employees outside of schools. In 2018, the legislature implemented a $15 minimum wage for all state employees, except for those in public schools. “We started competing with other state government agencies for these support staff,” Neter said.

Now, the state has bumped the minimum wage for all state employees, including those in schools, to $13 an hour, and it will jump again to $15 an hour next school year. But Wake County district leaders decided those increases were too slow. While they deliberated over how to act, cafeteria workers and bus drivers staged sick-outs, demanding higher pay for harder work.

Late last fall, district leaders successfully petitioned the county commission to fund a $15 minimum wage across all positions, and a 2 percent increase for all noncertified workers. The school board approved the increases at an early December meeting, with school employees rallying outside.

The catch? It’s only funded through June 2022. Neter and his colleagues will need to secure additional funding from the state and county governments to maintain those increases after that.

“They need to continue, number one, because it’s the right thing, because they were artificially low for reasons beyond our control,” Neter said. “The [low wages] were impacting our capacity to conduct our core business.”

The suburban district is rapidly growing, with four new schools opening next year and an annual increase of roughly 3,000 students. Figuring out how to keep schools fully staffed without breaking the bank is like “trying to combine a magic wand and a crystal ball,” Neter said.

The political rancor of school board meetings and the exhaustion and anxiety educators are feeling only compounds the challenge.

“When I look at recruiting and retaining staff, and I look at divisiveness within our communities, that’s part of our challenge as well,” Neter said. “You can’t pay your way out of that.”


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