Attention To Pay

Posted by on November 30, 2010

The debate over how best to restructure teacher salary systems is older than I am—with good reason: Instructional salaries represent roughly 40 percent of current K-12 public school expenditures.  And some of the arguments for changing current salary structures make sense, at least in theory. 

For instance, there is a case for tying step increases (typically awarded according to years of service) to additional measures, such as strengthened evaluation systems and curriculum-linked professional development (as is the case in the recently-ratified Baltimore contract). These types of changes, if they are bargained and approved by teachers, could be of real benefit to all stakeholders.

At the same time, it’s unfortunate that some of the talking points used commonly by those who wish to overhaul teacher salary systems are rather misleading and oversimplified. Not only do they sometimes seem designed to inspire outrage against teachers, they also tend to obscure or ignore important facts about the relationship between teacher pay and teacher quality.  Three such arguments seem particularly pervasive.

The first is the constantly-repeated notion that teachers’ salaries are based entirely on experience and education. This conjures mythical images of “lazy, incompetent teachers” getting paid more and more for doing nothing except accruing years of service. But the argument itself is incomplete almost to the point of being misinformation. Teachers’ salaries are not determined by education and experience. Teachers’ raises are. This distinction is well-known among those of us in the education field, but it is important, and it often gets lost in the oversimplifications about how teachers are paid.

Districts vary widely in the salaries they pay teachers with the same education and experience, even adjusting for wage differentials and the cost of living. Moreover, poorer districts tend to pay less than their more affluent counterparts: It is not unusual for second or third year teachers in higher-income districts to make more than veteran teachers in poorer districts. It is therefore a bit misleading to say that teachers are paid solely based on experience and education.  While an accurate statement within a given district, it ignores the fact that teachers’ salaries are as much a function of where they teach as of their credentials and experience.

And the implications of these disparities for teacher sorting into schools and districts are, arguably, just as important as whether pay increases are given for years of experience and/or education.  While teacher mobility is often based on factors other than salary, there is a large body of evidence showing that higher salaries do boost retention, and there is no question that, every year, administrators in high-poverty districts must replace excellent teachers who have moved to better-paying jobs in nearby districts (which is one major reason why poorer districts tend to have less qualified teachers).

A second common misperception, most recently advanced by Bill Gates, is that seniority-based raises are generating skyrocketing costs. This is a severe overstatement. While it is true that salary costs have been increasing as a proportion of school expenditures, this is predominantly a result of hiring more teachers (due to increased enrollments, class size reduction, etc.), not of teachers nonchalantly worsening budget problems by getting exorbitant automatic raises.

Actually, by one estimate from the mid-1990s, the average step increase for teachers with less than 12 years of experience was about 2.7 percent (another more recent estimate comes in at 2.6 percent, but the methodology is poorly explained). Even with year-to-year increases (not included in these estimates), these are hardly outrageous raises for highly-educated professionals.  And remember that step increases cease after teachers reach the “top step” of their schedules, which can take anywhere from 8-10 to over 30 years (though many districts provide additional “longevity raises” at points beyond the top step). 

The relatively modest size of experience-based raises is also evident in the fact that the average teacher’s salary, adjusted for inflation, has essentially been flat for 15 years.  According to AFT’s annual Teacher Salary Survey, the average adjusted salary was $52,115 in 1993, compared with $52,999 in 2008 (of course, these cross-sectional data mask changes in the teacher workforce, including the fact that average experience declined a bit over this period).

Obviously, seniority-based raises, like all raises, increase costs. But it is an overstatement to blame rapid rises in education spending on teachers’ raises that, on the whole, barely keep pace with inflation.  It also totally ignores the fact that teacher pay continues to lose ground to that of other professions, and that the longer teachers remain in the classroom, the larger their wage penalty versus other occupations. These gaps carry big consequences for the teacher labor market, and without scheduled raises, they would likely be even wider.

Third and finally, proponents of altering teacher compensation structures frequently imply that the best way to attract talented candidates to the profession is to base earnings on performance, not seniority or credentials.  This argument is not misleading per se, but it is, as more thoughtful commentators acknowledge, really just a leap of faith. Despite what sometimes seems to be absolute certainty among supporters, there is little evidence that performance-based compensation systems will improve the quality of applicants.

The elevation of merit pay as the primary means of recruiting top candidates also ignores what is arguably the biggest issue when it comes to attracting the best young people to teaching: In 2008, the average starting salary of a college graduate was $49,624, compared with $38,160 for first-year public school teachers.  In other words, the choice of teaching requires one to forego, on average, roughly 20 percent of earnings (and likely much more for the most talented graduates).

So, there’s a fundamental problem here: We’re offering $40,000 to graduates who can easily make much more elsewhere. There is some evidence that increasing starting salaries for new teachers does serve to attract better candidates (also here).  Of course, it’s also expensive, perhaps prohibitively so in our current fiscal situation. While we should certainly try everything we can to attract better people (e.g., lowering unnecessary barriers to entry, loan forgiveness, housing subsidies), we should also be realistic. So long as the gap between new teachers’ salaries and their other options remains so large, we will continue to largely rely on young peoples’ altruism and idealism to get them into the profession.

Overall, experiments that change the way teachers are paid can be a good thing. And there’s a decent case to be made without all the simplistic and/or outrage-inspiring talking points. The complexity of the pay/quality relationship calls for a fuller discussion, as does its importance.


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