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Report: School Teachers Paid More Than Their Fair Share

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"Does this mean we should go out and arbitrarily cut teacher salaries?"

  • Study by the American Enterprise Institute and The Heritage Foundation factors in measures in addition to wages (i.e., fringe benefits), compares public school teachers with private, non-teacher workers of similar education and experience and finds teachers make more.
  • Authors equate this to 52 percent more in wages costing up to $120 billion per year.
  • American Federation Of Teachers responds saying the assertions made in the study are of poor reasoning and should get a "flunking grade."

A new study produced by the American Enterprise Institute and The Heritage Foundation reports that when you compare public school teachers to private-sector, non-teacher workers with similar educational backgrounds and work experience using standard comparison techniques, the two groups come in about equal.

But Hertiage's Jason Richwine, who co-authored the report with AEI resident scholar Andrew Biggs, seems to think that where public school teachers are involved, more analytics should come into play in evaluating what their compensation really is. This includes comparing not only wages but benefits and what the authors call "fringe benefits." When you weigh all the factors that Richwine and Biggs take into account comparing public school teachers and non-teacher private workers, teachers win making 52 percent more. The report authors equate this to $120 billion overcharged to tax payers each year.

Here are several highlights from Richwine and Biggs' report:

  • Public school teachers earn less wages compared to non-teachers for the similar level of education they have received.
  • There is no wage gap between the two groups when they are matched on an objective measure of cognitive ability rather than on years of education.
  • Public school teachers earn more than private school teachers, when both schools compared are secular and follow the standard curriculum.
  • Workers who switch from non-teaching jobs to teaching get a pay raise of about 9 percent. Teachers who switch to non-teacher jobs have decreased wages by 3 percent.

And what of the "fringe benefits"? According to the report, public school teachers receive better pensions and more generous retiree health care (which is excluded from Bureau of Labor Statistics and therefore overlooked making health care seem more modest, the authors write) compared to non-teachers at a similar level. The  report also notes higher job security for public school teachers. The report authors state "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." Public school teachers have a lower unemployment rate compared to private workers, according to the report.

With the teaching profession being "crucial to America's society and economy," the report states that teachers should be paid neither under nor over the market rate. US News reports Biggs saying at a briefing that their findings don't suggest we should cut teacher salaries but perhaps other things:

"Does this mean we should go out and arbitrarily cut teacher salaries? No," he said. But reducing benefits or pay won't cause a mass exodus from the profession, he argued. "People worry that if you reduce these benefits at all, [then] all the teachers are going to quit. You only get high quit rates if they're being paid below market value."

He said schools should focus on setting pay to reward the best teachers. "The question is how should your pay structures be set so that you're rewarding the teachers you want?"

The American Federation Of Teachers's statement responding to the report, according to NPR, calls the analytics of the report "ridiculous" and in some cases "pure fiction":

This report contains a number of ridiculous assertions, such as arbitrarily assigning 8.6 percent as a "job security premium" teachers supposedly enjoy. This "job security premium" is pure fiction, given the 278,000 public education jobs that have been lost during this recession. There's no basis for this claim—it's simply a placeholder used to lead to AEI's conclusion. In our business, such reasoning would get a flunking grade.

The truth—backed by reputable research—is that few, if any, workers subsidize their professions like teachers. America's teachers spend hundreds of dollars per year on classroom supplies for their students and work longer hours than their peers in other nations, including late afternoons, evenings and weekends grading papers, preparing lesson plans, talking with students and their parents, and other school-related work.

Politico reported a response by Michelle Rhee, a advocate against teacher's unions, as saying that she doesn't not agree that teachers are overpaid. In her statement, she says that moving money from administration to increase teachers' salaries actually saw an improvement in student learning.

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