Pondering School Teacher's Salaries

Hm.  This WSJ article is a very interesting -- and, dare I say it, controversial -- take on the idea that teachers are underpaid:

A common story line in American education policy is that public school teachers are underpaid—"desperately underpaid," according to Education Secretary Arne Duncan in a recent speech. As former first lady Laura Bush put it: "Salaries are too low. We all know that. We need to figure out a way to pay teachers more."

Good teachers are crucial to a strong economy and a healthy civil society, and they should be paid at a level commensurate with their skills. But the evidence shows that public school teachers' total compensation amounts to roughly $1.50 for every $1 that their skills could garner in a private sector job.

How could that be?

You have to look past the hype and political correctness to the real numbers, and perform some legitimate comparisons:

First, consider salaries. Public school teachers do receive salaries 19.3% lower than similarly-educated private workers, according to our analysis of Census Bureau data. However, a majority of public school teachers were education majors in college, and more than two in three received their highest degree (typically a master's) in an education-related field. A salary comparison that controls only for years spent in school makes no distinction between degrees in education and those in biology, mathematics, history or other demanding fields.

How often have you heard that comparison being made?  This is the first time I've ever heard it, but I think it changes the perspective quite a bit.  The article goes on with the common knowledge that education is one of the easiest curricula to complete, and shows that on any number of objective professional exams (i.e. the SAT or GRE) teachers typically score around the 40th percentile.  Not exactly a ringing endorsement.  Then we get to the fringe benefits...

Data on employee benefits from the Bureau of Labor Statistics (BLS) ... do not include retiree health coverage, which for teachers is worth about an additional 10% of their salaries. Because of differing accounting rules between the public and private sectors, BLS data also make teachers' defined-benefit pensions appear only slightly more generous than the typical 401(k) plan found in the private sector.

In reality, a teacher who retired after 30 years of service with an annual salary of $40,000 might receive guaranteed annual pension benefits of about $20,330. Under a typical private 401(k) plan, a guaranteed annual benefit might be only around $4,450 (assuming the money is invested in U.S. Treasurys and the employee buys an annuity).

BLS data on paid leave for teachers count vacation days only during the school year, omitting summer and long holiday breaks. A valid pay comparison should include this extra time off, in which teachers can enjoy longer vacations or earn additional income.

Properly counted, a typical public school teacher with a salary of $51,000 would receive another $51,480 in present or future fringe benefits. A worker in private business with the same salary would receive around $22,185 in fringe benefits.

And don't forget that those long breaks often include secondary jobs that bring in additional income that non-teachers don't have the opportunity to make.  And we haven't even approached the subject of job security yet, which is especially relevant in uncertain economic times like now:

...teachers still have greater job security than workers in private businesses. While employment in education declined by 2.9% between September 2008 and July 2011, according to BLS data, overall private-sector employment declined by 4.4%. Moreover, from 2005 through 2010 the unemployment rate for public school teachers averaged 2.1%, versus 4.1% for private school teachers and 3.8% for occupations that some consider comparable, such as computer programmers and insurance underwriters. ...

Consider that one-fifth of the highest-performing public school teachers in Washington, D.C., recently declined to give up even part of their job security in exchange for base salary increases of up to $20,000.

Clearly they valued security over that huge chunk of change.  The WSJ calculates this security is worth another 9% in salary compensation.  And how about the simple math of the real world:

...the average person who moves into teaching receives a pay increase of almost 9%, while the average teacher who leaves for the private economy must take a pay cut of over 3%.

The bottom line:

In short, combining salaries, fringe benefits and job security, we have calculated that public school teachers receive around 52% more in average compensation than they could earn in the private sector.

And here's why it should matter to everyone:

The compensation premium is especially relevant today, as states and localities struggle with budget deficits. Restraining the growth of teacher compensation—in particular, pension and retiree health benefits that outstrip what comparable private-sector workers receive—could help balance budgets and perhaps restore school resources lost to rising labor costs. Broader pay reform should give school administrators greater flexibility to reward the best or most-needed teachers with high salaries and benefits, while encouraging the least effective ones to improve or to leave the profession.

Effective reform, however, requires knowing all the facts about teacher pay. Policy makers and the public should not accept at face value that the typical teacher earns far less than he or she would in the private sector. The evidence points to a very different conclusion.

Now, let's be clear about something: I'm not trying to bag on teachers.  In fact, I firmly believe that a good teacher is priceless, and worth three times the salary he/she probably gets paid.  My family has been blessed to have top-notch teachers in a great school district, and I am in no way trying to demean any of them.  The WSJ article points out that the data presented are based on averages, and that the very best teachers are likely paid less than equivalent private sector performance and skill level, and I would agree.  But...any discussion of teacher salaries is peripheral.  My point is to address the underlying root of this discussion - blindly throwing money at education without regard to whether or not a teacher deserves it.

There is currently a national misconception of teachers being underpaid everywhere, and that is simply not true.  Quite the opposite, in fact, as the above article clearly shows.  Now, when we consider that U.S. education is going down the tubes with each successive year (the last numbers I heard said that some 15% of high school age kids don't graduate at all, and many of those who do are functionally illiterate), should we really keep throwing money at the current educational system?  I could be persuaded by a reasonable argument that showed money being heaped directly upon teachers based on incentives for good performance, but that's not what happens.  In reality, huge chunks of taxpayer money go to the NEA (yet another liberal Democrat money-laundering union) and unnecessary administration expenditures rather than anything that directly benefits the educational value or capability of teachers or schools.

And our children -- again, on average across the nation -- pay the price for it.  Ultimately, as these kids grow up, this whole nation will suffer.

We need to rethink the entirety of our educational system.