Are Teachers Really Underpaid? Let's Look At the Data...
Over the past several months, public school teachers in West Virginia, Kentucky, and Arizona have gone on strike demanding higher salaries and better benefits. The state governments in these states passed new reforms increasing teacher pay and benefits, but was that the right reaction? The facts about salary and benefits in public education tell a different story.
Andrew G. Biggs, scholar of public sector compensation, and Jason Richwine, American political commentator, do not believe that teachers are underpaid in America. Quite the contrary, they are paid at the market rate for their degrees and experience, sometimes even a bit higher than what they might be earning elsewhere.
The Bureau of Labor Statistics (BLS) analyzes the skill requirements of different jobs, assigning each a pay grade based on the federal government’s General Schedule (GS). At the lowest skill levels—a GS-6 on the federal scale—teachers earn salaries about 26 percent higher than similar white-collar workers. At GS-11, the highest skill level, teaching pays 17 percent less than other white-collar jobs. This explains how shortages can exist for specialized positions teaching STEM, languages, or students with disabilities, while elementary education postings may receive dozens of applications per job opening. The average public school teaching position rated an 8.8 on the federal GS scale. After adjustment to reflect the time that teachers work outside the formal school day, the BLS data show that public school teachers on average receive salaries about 8 percent above similar private-sector jobs.
Those who choose to take up a career in the classroom are not foregoing higher pay scales. In fact, if they choose to leave education in pursuit of something else, they will often take a cut in pay of about 3 percent. Studies using administrative records in Florida, Missouri, Georgia, and Montana showed these results, where very few who left the education field ended up with higher-earning work.
Biggs and Richwine do note that in states like Arizona, West Virginia, and Oklahoma, salaries have been lagging and run below the national average, even after controlling for cost of living. However, they do note that pension and other perks of the job are more than enough to make up for that deficit.
Oklahoma teachers accrue new pension benefits each year, with a present value equal to 30 percent of their annual salaries. Subtract Oklahoma teachers’ own contribution of 7 percent, and employer-paid retirement benefits are worth 23 percent of annual salaries. By contrast, the typical private-sector employer contribution to a 401k plan amounts only to about 3 percent of employee pay.
Many teachers also qualify for retiree health coverage, now practically extinct in the private sector. In some states, retiree health care is modest: Oklahoma teachers get an insurance supplement of about $100 per month. But for teachers in Illinois, future retiree health benefits are worth an additional 8 percent of annual pay, while in North Carolina, retiree health benefits are worth an additional 12.5 percent.
When put into perspective, teachers are not overpaid in their assessment. The generous pension and health benefits that public school teachers get are far above what private sector employees typically earn. Teachers have a lot of support nationally, and the desire for higher pay is understandable. But is there really a crisis of underpaid teachers? Based on the fact that they receive market-level wages, and enjoy generous retirement packages, the answer is simply no.