The Chicago teachers' strike has again focused Americans on the issue of public school teacher pay and benefits levels, especially in the midst of our continuing national economic struggles. A number of commentators, including the hometown Chicago Tribune's editorial board, have noted that teachers are doing quite well these days relative to others in the Windy City. So it was inevitable that a contrary narrative, namely that teachers are underpaid, would emerge. Typical is a posting on the NY Times Economix blog which cites a study from the Organization for Economic Cooperation and Development which finds a lag between teacher wages and those of other college grads. The blog posting then cleverly asks, Does It Pay to Become a Teacher? In doing so the post not only accepts the superficial OECD data on salaries (when there are far better studies here in the U.S. of what teachers actually earn), but it also assumes that teachers could have earned more money doing something else. That's not what the facts suggest.
Perhaps this shouldn't be necessary to point out to a blog called "Economix" but it is possible to track the earnings of teachers who leave the profession and do something else. One academic paper tracked Georgia teachers who left the profession and moved into the private sector and found they earned, on average, about what they did as teachers. A similar study of teachers who leave the field in Missouri found they earn less in the private sector, except for those with high standardized (ACT) test scores.
Andrew Biggs and Jason Richwine take a broader sample from the Survey of Income and Program Participation, a study following 50,000 households, which includes information on job changes. It found that teachers who shift to non-teaching jobs earn 3.1 percent less, while other workers who shift from non-teaching jobs to other non-teaching jobs earned 0.5 percent more.
Some might argue that teachers don't do well when they switch careers because they don't have the right degree to maximize earnings in the private sector. If they had just studied something else they would succeed in the private sector, the argument goes. But this assumes that all degrees are equally challenging and equally open to everyone. The evidence suggests otherwise. On SAT scores, education majors score on average in the 38 percentile among those going to college. On the GRE education graduates scored well below the mean. Another study of ACT scores found something similar. These studies suggest there is no pot of gold in general for teachers in other professions because merely comparing years of education among graduates in different fields is a misleading measure of graduates' abilities:
As both a direct measure of acquired knowledge and an indirect measure of innate ability, teacher education does not compare well to education in other fields. The result is that years of education could be a highly misleading measure of teacher skill, write Biggs and Richwine.
Indeed, all things considered public school teachers do quite well, despite the misleading OECD figures. Although OECD's broad studies can be useful in comparing countries to each other, once the OECD starts trying to drill down into the data it inevitably produces results that are simplistic. That's the case here.
For one thing,
the OECD just measures salaries, not benefits. Nor does the OECD adjust for the
shorter work year of teachers. One MI study that made these adjustments found
"The average public school teacher was paid 36% more per hour than the average non-sales white-collar worker and 11% more than the average professional specialty and technical worker...and compared with public school teachers, editors and reporters earn 24% less; architects, 11% less; psychologists, 9% less; chemists, 5% less; mechanical engineers, 6% less; and economists, 1% less."
The report noted that not only do teachers work on average 4 hours a week less than other white collar workers, but of course their salaries are typically based on a 185-195 day work year.
Andrew Biggs and Jason Richwine take this analysis further by looking at a detailed valuation of benefits, including some benefits, like pensions, whose cost and value are not accurately tracked by standard government data. They include other benefits virtually unprecedented in the private sector, like retiree health care insurance. The pair estimate that for every dollar of salaries public school teachers earn, they earn almost another dollar in benefits. By contrast, private sector benefits cost employers about 43 cents for every dollar of salary.
I think voters
understand much of this even without drilling down into the numbers, which is
why we've seen a number of reform governors and mayors of both parties elected
in recent years promising education reform and control of school budgets.