Teacher pay: myths, facts and a better way

Teacher pay: myths and facts

Teachers are underpaid and disrespected in North Carolina. That’s an oft-repeated refrain of activist teacher organizations like the North Carolina Association of Educators, Red4EdNC and other progressive organizations who assert: if we want better schools, we need to pay our teachers more. Higher pay will attract better teachers, which will lead to higher graduation rates, better jobs and higher lifetime earnings, so the argument goes.

NCAE and other organizations rally for change by claiming teachers are poorly paid and poorly treated. Strong claims. They beg us to ask: Are the claims true? Let’s look at the facts:

Are teachers disrespected?

Teachers have received five pay raises in a row.[i] It would have been six if Gov. Cooper had not vetoed the 2019-20 state budget. Over the past five years teachers have received the following raises:

2014-15 — 7.0%
2015-16 — 3.8%
2016-17 — 4.7%
2017-18  –3.3%
2018-19 — 6.5%

• From 2014-18, North Carolina teachers have received the third-highest combined percentage pay raise in the country.

Average Teacher Pay in North Carolina[ii]

Year	Ave. Teacher Salary	North Carolina Average Teacher Pay Ranking	Average Teacher Salary as % of Median Hshld Income[iii]
2013-14	$44,990	47	($46,784)        .950
2014-15	$47,792	42	($50,797)        .940
2015-16	$47,941	41	($53,764)        .891
2016-17	$49,970	38	($50,343)        .992
2017-18	$51,234	34	($53,369)        .959
2018-19	$53,975	29	N/A
2019-20	$55,600*	N/A	N/A

.*estimate provided by Speaker Tim Moore’s Office

• Between 2013-14 and 2018-19, average teacher pay has risen about 13 percent.
• In 2013-14 North Carolina was 47^th in average teacher pay. In 2019, North Carolina ranked 29^th in average teacher pay and was 2^nd in the Southeast in teacher pay. The previous year North Carolina ranked 34^th in average teacher pay.
• In 2018-19, when adjusted for cost of living, average teacher pay in North Carolina ranks 20th nationally, and better than our neighbors from Virginia, South Carolina and Florida.                          

 Are teachers underpaid?

Teacher pay advocates frequently point to reports by the Economic Policy Institute (EPI) to bolster claims about low teacher pay. EPI issues an annual report on the “teacher pay gap,”  also called the teacher wage penalty. The teacher pay gap is the difference in salaries between teachers and similar private sector workers. In 2019, EPI asserted in a much-publicized study, the teacher wage penalty had grown to 21.4 percent. In other words, people in comparable positions in the private sector could expect wages to be almost 22 percent higher than the wages of an average teacher.

EPI’s study Is highly publicized and frequently cited by the media. It is also flawed. The problems are numerous.

• The study is based on weekly wages over the length of the academic year not the entire calendar year.
• It excludes comparison with private school teachers, the most similarly situated private sector professionals.
• Researchers control for demographic characteristics and educational attainment by comparing years of education. Doing so falsely assumes that education is an easily interchangeable commodity. Such a notion asserts a BS or MS degree in education is the same as a BS or MS degree in computer science or engineering. They are not.

In an article that criticized the EPI study, Andrew Biggs and Jason Richwine write in The Truth about Teacher Pay:

• The control variables in EPI’s statistical model obviously cannot explain the significant salary differences across occupations — otherwise there would not be so many occupations with large premiums or penalties. The model fails because salaries are determined by the supply and demand for specific skills that vary across occupations even after controlling for education. Therefore, in the context of comparing occupations, educational attainment is simply too imprecise as a skill measure. EPI’s analysis treats every bachelor’s degree as identical, and yet no one is surprised or upset that people with engineering degrees earn more on average than people with literature degrees, nor does anyone believe that every occupation requiring a college degree should be paid the same.
• Instead of looking to years in the classroom, the real world pays people not only according to education level but also according to supply and demand of the skills they have developed. And of course, the demand and supply of skills varies across fields and by education level. These truths undermine the whole argument that asserts teachers are underpaid.

Is teacher attrition increasing?

If teachers are underpaid, doesn’t it stand to reason that teachers would quit their jobs at rates higher than other professions?

• Job dissatisfaction and high attrition rates make for compelling arguments for smaller class size, higher teacher pay and more education spending. But how high are teacher attrition rates? The 2019 Department of Labor Job Openings and Labor Turnover lists openings, hiring and separations by industry as well as a labor turnover by industry. What did we find? Education had some of the lowest – if not the lowest turnover by industry.
• From The Truth about Teacher Pay

…. if teachers were underpaid, a large proportion might leave the profession because of low pay. But in fact, teachers quit their jobs at much lower rates than private-sector workers do. If quit rates are signals of an occupation’s relative attractiveness, then teaching is far more attractive than most private-sector jobs. So why are there so many news stories about teachers quitting? Part of the confusion is that quit rates among education workers, including teachers, are historically high right now, according to data from the Job Openings and Labor Turnover Survey (JOLTS) because the job market is tight. When job opportunities abound, employees switch jobs more often. The teacher quit rate runs roughly parallel to the private sector quit rate – it goes down during recessions and up during expansions. The difference is that at all times, the teacher quit rate is much lower.

• According to the Learning Policy Institute, the U.S. teacher attrition rate is about 8 percent. That’s high when you compare it to other countries like Singapore or Finland whose rates are around 3 or 4 percent – and some of the lowest in the world.
• Moreover, considering the demographic and cultural differences between the countries one must wonder if it’s even valid to compare the U.S. with either Finland or Singapore.[iv]
• If teachers are underpaid wouldn’t teacher attrition be higher and increasing?  The data tells us teacher attrition rates in North Carolina have been declining for four years.[v]

2015-16- 9.1%
2016-17 – 8.70%
2017-18 – 8.09%
2018-19   – 7.5%

Teachers and job satisfaction 

If teachers are underpaid, you would not only expect higher levels of attrition but also higher levels of teacher dissatisfaction. Indicators of teacher dissatisfaction can be found in responses to the  North Carolina Teacher Working Conditions Survey. The survey is administered to educators in North Carolina every two years and provides an opportunity for teachers to voice their opinion on topics relative to their classroom and professional environment. In 2018, more than 90 percent of all educators responded to the survey. Some key findings of the 2018 survey include:

• 8 percent of educators said that “class sizes were reasonable so that teachers have time available to meet the needs of all students.”
• 2 percent of educators said they “had sufficient instructional time to meet the needs of all students.”
• 3 percent of educators said the “non-instructional time provided for teachers is sufficient.”
• Most importantly, 87.1 percent of educators agreed with the statement, “Overall, my school is a good place to work and learn.” That figure is up from 85.1 in 2014 and 86.5 in 2016.

Of course, we do not suggest teachers do not face challenges in the school or classroom. Any reader of these pages knows we have chronicled many of them over the years. However, if 87 percent of educators agree that their school is a good place to work and learn, most people would imply that teachers are generally satisfied with their jobs and not as dissatisfied as some organizations claim.

Are teachers underpaid? What’s left out of the discussion

What is frequently left out of the teacher pay discussion is total compensation, or the cost of benefits.

• According to the National Income and Product Accounts (NIPA), employees in public education received benefits equal to 45 percent of their annual wages. Benefits in the private sector averaged only 19 percent of wages.[vi]

North Carolina Teacher Benefits and Compensation

• In 2019-20, the value of the average benefit package for teachers in 2019 was $21,512. That includes health insurance ($6,306), retirement benefits (19.7% of salary) and social security (7.65 percent of salary).
• In 2010, benefits comprised 26 percent of average teacher salary. Benefits in 2020 comprise approximately 39 percent of average teacher salary.

And the costs keep climbing:

• Health Insurance 2010: $4,527; 2020 – $6,306, Retirement Insurance (% of Salary) 2010: 8.75%; 2020 -19.7%
• SL 2019-209 guarantees that the cost of benefits for teachers will continue to rise. In 2020-21, the state health plan costs will increase to $6,647/ per employee and retirement costs will jump from 19.7% to 21.44 % of employee salaries.

Total Costs

• 2009 -10 Employee Benefits $2.05 billion
• 2018-19 Employee Benefits -$3.13 billion

Teacher pay: A better way 

Correctly conceptualize the problem

• Many factors, including many outside the classroom, influence student achievement. A fixation with teacher salaries fuels the erroneous expectation that the right teacher with the right compensation will be able to solve every problem. These realities should temper our enthusiasm for investing heavily and primarily in teacher salaries.

Recognize the shortcomings of using NEA’s Average Teacher Salary Ranking.

• Measures only the average, can be easily distorted by large numbers. National average is skewed up by top earning states (e.g. New York, New Jersey, California).
• Distortions help 37 states fall below the “national average.” Median is the better statistic.
• Fails to reflect differences in the cost of living.
• If all states use “national average” it’s a moving target.
• Average fails to consider factors such as growth. States like NC which have many newer teachers due to population growth will have a lower average teacher salary because of a higher percentage of young teachers.
  (Source: The Real Facts on NC Teacher Pay: Part I, Bob Luebke, May 9, 2016)

Eliminate the Teacher Salary Schedule and across- the-board raises (TSS).

• Across-the-board raises reward showing up, not job performance.
• Student performance is not linked to the experience or credentials of a teacher.
• TSS rewards based on years of experience and credentials – not value and job performance. TSS does not incentivize excellence.[vii]

Recognize Differences in Academic Fields

• Math and Science teachers are more difficult to find. Schools need to recognize realities of different labor markets and pay higher salaries for harder to staff positions.

Limit growth of Nonteaching staff

• Only a little more than half (53 percent) of all public-school staff are teachers. The number of professional and non-certified staff increase nearly every year. These positions compete with teachers for dollars.

Empower Principals and Local Districts with authority to set wages

• Current pay levels are set not by markets, but by negotiations between teacher professional associations and law makers. Principals and local districts should have the authority to set teachers wages based on local markets and demand. The public schools should be locally governed. Who better than a principal knows the value of a good teacher? It’s far better to have that decision made locally than by politicians in Raleigh.

 

[i] Source: Legislative Salary Increases, Fiscal Research Division of North Carolina General Assembly. Available online at: https://www.ncleg.net/FiscalResearch/statistics_and_data/statistics_and_data_pdfs/salaries_benefits/Historical_LSI-2018-19.pdf

[ii]  Statistics from Highlights of the North Carolina Public School Budget for various years, Published by Department of Public Instruction. NEA  Rankings and Estimates Report for various years.Pubished by National Education Association. Available online at: www.nea.org

[iii] Source: Median Household Income for North Carolina by Statista.com. Available online: www.statista.com. Average income would be the proper statistic to compare with average teacher salary. However the statistic is not available. There are problems with comparing averages and median. However, if we realize the differences, a comparison  might still have limited value. Average teacher salary is wages for one person. Median household income implies as many recipients above as well as below and can also imply multiple wage earners in the same household.  Taking a average teacher pay as a percentage of household income can approximate teacher pay and household income.

[iv]   It’s time to take a deep breath on teacher attrition, Bob Luebke, Blog post, NCCivitas.org. March 20, 2020

[v] Note:  Figures prior to 2016 not included because of changes in how formula calculated Source: Annual Report of the State of the Teaching Profession, Report to the North Carolina State Board of Education, February 5, 2020. Available online:  https://simbli.eboardsolutions.com/Meetings/Attachment.aspx?S=10399&AID=208652&MID=6646

[vi] Source: Bureau of Economic Analyses. Available online at: https://www.bea.gov/products/national-income-and-product-accounts

[vii] Teacher Pay: A Problem Money Can’t Fix, Bob Luebke Civitas Institute, March 25, 2014. Available online: https://www.nccivitas.org/2014/teacher-pay-problem-money-cant-fix/