The teacher pay penalty has hit a new high

Trends in the teacher wage and compensation gaps through 2017

This report was produced in collaboration with The Economic Policy Institute

Summary and key findings

Teacher strikes in West Virginia, Oklahoma, Arizona, North Carolina, Kentucky, and Colorado have raised the profile of deteriorating teacher pay as a critical public policy issue. Teachers and parents are protesting cutbacks in education spending and a squeeze on teacher pay that persist well into the economic recovery from the Great Recession. These spending cuts are not the result of weak state economies. Rather, state legislatures have enacted them to finance tax cuts for the wealthy and corporations. This paper underscores the crisis in teacher pay by updating our data series on the teacher pay penalty—the percent by which public school teachers are paid less than comparable workers.

Providing teachers with a decent middle-class living commensurate with other professionals with similar education is not simply a matter of fairness. Effective teachers are the most important school-based determinant of student educational performance. To ensure a high-quality teaching workforce, schools must retain experienced teachers and recruit high-quality students into the profession. Pay is an important component of retention and recruitment.

As noted in an earlier paper (Allegretto and Mishel 2016), retention and recruitment is a challenge as states struggle to return to pre-recession teacher levels. Every state headed into the 2017–2018 school year with teacher shortages (Strauss 2017) and new EPI research indicates the teacher shortages persist (Garcia forthcoming).

In their study of the teacher shortage in California, Darling-Hammond et al. point to a number of factors limiting the supply of teachers, from layoffs that “left a mark on the public psyche” to frozen salaries, declining working conditions, and increased class sizes. “One sign of the impact is that only 5 percent of the students in a recent survey of college-bound students were interested in pursuing a career in education, a decrease of 16 percent between 2010 and 2014,” the authors noted (Darling-Hammond et al. 2016, iii).

To address teacher shortages, it is necessary to focus on both recruiting and retaining high-quality teachers. Many policies are needed to accomplish this goal, and providing appropriate compensation is a necessary, major tool in addressing shortages:

Even if teachers may be more motivated by altruism than some other workers, teaching must compete with other occupations for talented college and university graduates.… Teachers are more likely to quit when they work in districts with lower wages and when their salaries are low relative to alternative wage opportunities, especially in high-demand fields like math and science. (Darling-Hammond et al. 2016, 18)

As we have shown in our more than a decade and a half of work on the topic, relative teacher pay—teacher pay compared with the pay of other career opportunities for potential and current teachers—has been eroding for over a half a century. In How Does Teacher Pay Compare (Allegretto, Corcoran, and Mishel 2004), we studied the long-term trends in teacher pay. We followed this up with The Teaching Penalty, published in 2008, and updated our findings in other papers (Allegretto, Corcoran, and Mishel 2011; Allegretto and Tojerow 2014; and Allegretto and Mishel 2016). As noted, this body of work has documented the relative erosion of teacher pay. For instance, female teachers enjoyed a wage premium in 1960, meaning they were paid more than comparably educated and experienced workers. By the early 1980s, the wage premium for female teachers became a penalty. The total compensation penalty (how much less teachers make in wages and benefits relative to comparable workers) has also increased.

Here we extend our analysis through 2017. Our examination of the teacher wage gap begins in 1979. Our examination of the teacher compensation penalty (combining wage and benefit data) begins in 1994, the earliest year for which teacher benefit data are available. With this update, we continue to sound the alarm regarding the long-run growth in the pay penalty. We also provide estimates of teacher wage penalties by state. Following are key highlights of the report:

The mid-1990s marks the start of a period of sharply eroding teacher pay and an escalating teacher pay penalty

  • Average weekly wages of public school teachers (adjusted for inflation) decreased $27 from 1996 to 2017, from $1,164 to $1,137 (in 2017 dollars). In contrast, weekly wages of other college graduates rose from $1,339 to $1,476 over this period.
  • For all public-sector teachers, the relative wage gap (regression-adjusted for education, experience, and other factors known to affect earnings) has grown substantially since the mid-1990s. The teacher wage penalty was 1.8 percent in 1994, grew to 4.3 percent in 1996, and reached a record 18.7 percent in 2017.

Wage penalties have grown significantly for both male and female teachers

  • The wage premium that female teachers had in the 1960s and 1970s has long been erased, replaced by a growing wage penalty. Our previous research found that female teachers earned 14.7 percent more in weekly wages than comparable female workers in 1960. This report finds that the teacher weekly wage premium for female teachers had fallen to 4.2 percent in 1979. And the wage premium for female teachers largely disappeared in the 1980s and 1990s, replaced by a large and growing wage penalty in the 2000s and 2010s. In 2017, female public school teachers were making 15.6 percent less in wages than comparable female workers.
  • The wage penalty for male teachers is much larger. The weekly wage penalty for male teachers was 22.1 percent in 1979 and improved to 15.1 percent in 1994, but worsened in the late 1990s into the early 2000s. In 2017, male public school teachers were making 26.8 percent less in wages than comparable male workers.

Improvements in benefits relative to professionals have not been enough to offset the growing teacher wage penalty

  • While relative teacher wage gaps have widened, some of the difference may be attributed to a tradeoff between pay and benefits. In other words, school districts may not be giving teachers raises but are instead offering stable or slightly better benefits, making benefits a larger share of the overall compensation package for teachers than for other professionals. In 2017, nonwage benefits made up a greater share of total compensation for teachers (28.6 percent) than for professionals (21.9 percent).
  • As a result of their growing benefit share of compensation, teachers are enjoying a “benefit advantage” that has grown since 1994, from 2.1 percent to 7.6 percent. But this has not been enough to offset the growing wage penalty. The total teacher compensation penalty was a record-high 11.1 percent in 2017 (composed of an 18.7 percent wage penalty plus a 7.6 percent benefit advantage). The bottom line is that the teacher compensation penalty grew by 11.4 percentage points from 1994 to 2017.
  • This growing compensation penalty is a key part of the story of changing teacher pay but shouldn’t obscure the importance of the wage penalty alone—only wages can be saved or spent on housing and food and other critical expenses.

Teacher wage and compensation penalties grew from 2015 to 2017

  • The public school teacher wage penalty grew from 17.0 percent to 18.7 percent from 2015 to 2017.
  • Teacher benefits improved relative to professionals from 2015 to 2017, boosting the benefits advantage from 6.5 percent to 7.6 percent. Despite this improvement, the total compensation (wage and benefit) penalty for public school teachers grew from 10.5 percent to 11.1 percent in 2017.

The Great Recession can’t be blamed for the erosion in teacher pay

  • The erosion of teacher pay relative to that of comparable workers in the last couple of years—and in fact since 2008—reflects state policy decisions rather than the result of revenue challenges brought on by the Great Recession. A recent study found that most of the 25 states that were still spending less for K-12 education in 2016 than before the recession had also enacted tax cuts between 2008 and 2016. In fact, eight of the 10 states with the largest reductions in education funding since 2008 were states that had reduced their overall “tax effort”—meaning through tax cuts or other measures they were collecting less in taxes relative to their capacity to generate tax revenue. These eight states were Alabama, Arizona, Florida, Georgia, Idaho, Kansas, Oklahoma, and Virginia.
  • We report teacher weekly wage penalties for each state for the period 2013–2017. These wage penalties adjust for education levels but not for other factors. The five states with the largest teacher wage penalties—Arizona, North Carolina, Oklahoma, Colorado, and Virginia—include four states in which recent teacher protests drew attention to the erosion of teacher pay.