The Teacher Pay Penalty

Economic Policy Institute is out with its annual look at the teacher pay penalty. Here’s more:

As we have shown in our more than a decade and a half of work on the topic, there has been a long-trending erosion of teacher wages and compensation relative to other college graduates.1 Simply put, teachers are paid less (in wages and compensation) than other college-educated workers with similar experience and other characteristics, and this financial penalty discourages college students from entering the teaching profession and makes it difficult for school districts to keep current teachers in the classroom.

Key findings

  • The teacher wage penalty has grown substantially since the mid-1990s. The teacher wage penalty is how much less, in percentage terms, public school teachers are paid in weekly wages relative to other college-educated workers (after accounting for factors known to affect earnings such as education, experience, and state residence). The regression-adjusted teaching wage penalty was 6.0% in 1996. In 2019, the penalty was 19.2%, reflecting a 2.8 percentage-point improvement compared with a penalty of 22.0% a year earlier.
  • The teacher wage penalty declined in the wake of recent teacher strikes but only time and more data will reveal whether teachers’ actions led to a decline and a turning point. The lessening of the teaching penalty from 22.0% in 2018 to 19.2% in 2019 may reflect pay raises enacted in the wake of widespread strikes and other actions by teachers in 2018 and 2019, particularly in some of the states where teacher pay lagged the most. Unfortunately, the data we have to date are not sufficient to allow us to identify the geographic locus of the improvements in teacher wages and benefits and any association with the recent wave of teacher protests and strikes. Only time will tell if this single data point marks a turning point in teacher pay.
  • The wage premium that women teachers experienced in the 1960s and 1970s has been replaced by a significant wage penalty. As noted in our previous research, women teachers enjoyed a 14.7% wage premium in 1960, meaning they were paid 14.7% more than comparably educated and experienced women in other occupations. In 2019, women teachers were earning 13.2% less in weekly wages than their nonteaching counterparts were—a 27.9 percentage-point swing over the last six decades.
  • The wage penalty for men in teaching is much larger than it is for women in the profession, and it too has worsened considerably. The teacher wage penalty for men was 16.6% in 1979. In 2019, male teachers earned 30.2% less than similar male college graduates who chose a different profession. This explains, to a large degree, why only one in four teachers are men.
  • While teacher wage penalties have worsened over time, some of the increase may be attributable to a tradeoff school districts make between pay and benefits. In other words, school districts may not be giving teachers raises but are instead offering stable or slightly better benefits, such that benefits make up a larger share of the overall compensation package for teachers than for other professionals. In 2019, nonwage benefits made up a greater share of total compensation for teachers (29.3%) than for other professionals (21.4%). In 2004, nonwage benefits share of compensation was 20.7% for teachers and 18.7% for other professionals.
  • The benefits advantage of teachers has not been enough to offset the growing wage penalty. The teacher total compensation penalty was 10.2% in 2019 (composed of a 19.2% wage penalty offset by a 9.0% benefits advantage). The bottom line is that the teacher total compensation penalty grew by 7.5 percentage points from 1993 to 2019.
  • The teacher wage penalty exceeds 20% in 21 states and in the District of Columbia. Teacher weekly wage penalties for each state, computed using pooled 2014–2019 data, range from 2.0% in Wyoming to 32.7% in Virginia. In 21 states and the District of Columbia teachers are paid less than 80 cents on the dollar earned by similar college-educated workers.

In Tennessee, the teacher wage penalty is 21.4%

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Bargain Prices on Teachers in Tennessee

Two years ago, I wrote about the teacher wage gap in Tennessee — the fact that teachers in Tennessee earned nearly 30% less than similarly prepared professionals. Now, the Economic Policy Institute has updated their study of teacher pay relative to other professions.

Guess what?

Tennessee teachers still come at bargain basement prices!

While there is some (slightly) encouraging news, the bottom line: Teacher pay in Tennessee is still not really improving relative to other professions.

This year’s results indicate a national average teacher pay gap of 23.8%. Tennessee’s gap is 27.3%. That’s an improvement of two points for Tennessee, which had a gap of 29.3% two years ago.

That said, Tennessee’s gap is still worse than the national average and among the worst in the Southeast.

Of 12 Southeastern states, Tennessee ranks 8th in teacher pay gap — that’s up one place from 9th two years ago.

Here are the numbers:

Mississippi                   18.9%

South Carolina            20.5%

West Virginia              21.2%

Louisiana                     23.5%

Arkansas                      24.3%

Kentucky                     24.6%

Florida                         25.7%

Tennessee              27.3%

Georgia                       29%

Alabama                     29.4%

Virginia                      33.6%

North Carolina         35.5%

 

Yes, the authors acknowledge that teacher benefit packages tend to be more generous than those offered other professionals. By their analysis, teachers have a benefits package that is a bit more than 7% more generous than similar professionals. The most expensive of these benefits is healthcare, followed by defined-benefit pensions.

Tennessee teacher healthcare benefits vary by district, but for the purpose of this discussion, we’ll assume that Tennessee teachers receive the national average benefits advantage.

Doing so means Tennessee teachers are still paid 20% less than similarly-trained professionals.

While some progress on this front is better than none at all, continuing down this road is not sustainable. Investing in teachers by providing compensation on par with other professions requiring similar education and training is essential to recruitment and retention.

Tennessee’s next Governor and the General Assembly sworn-in in January of 2019 should move past studying the issue and get to work finding long-term solutions to close this gap and pay our teachers the salaries they deserve.

 

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