Stop Talking about Teacher Pay without Even Mentioning Pensions

by Patrick Brennan

Vox has a piece today discussing how little we supposedly pay teachers, noting that teachers’ salaries can often be lower than those of, say, auto-repair workers. In fairness, they’re working from a report from the Center for American Progress, which should know better and have more scholarly integrity than this.

But it just makes no sense to compare teachers’ cash salaries with those paid by private-sector professions.

Most obviously, teachers are earning pension wealth as they work, represented by future cash flows guaranteed to them by most states and municipalities. Almost no private-sector jobs offer programs like this — they do offer certain retirement benefits, but they’re on average vastly less generous. This isn’t the easiest thing to take into account, but it’s ridiculous to compare salaries so much as mentioning the fact that most teachers will keep getting paid a significant chunk of their salaries after they retire. How big that chunk is varies, of course, but it’s equivalent to having hundreds of thousands of dollars in savings. Do most auto mechanics in South Dakota have that in the bank?

This isn’t the first time Vox has pulled this same trick, though last time, the problems were even more significant: Matt Yglesias compared the salaries of lawyers and financial managers to teachers, when it’s fairly obvious that the two groups of people doing those jobs, and the jobs themselves, differ dramatically. And that’s before we fairly compare compensation: Besides pensions, teachers on average get extremely generous health-care benefits while working, and often in retirement; extreme job security is also a form of compensation. The fact that these are, as I’ve argued, inefficient forms of compensation doesn’t make them less valuable to the people they attract.

One final issue with Vox’s piece: The reporter notes that U.S. teachers are “not as well when compared to other American college graduates.” This may, again, bother some people, but it makes a lot more sense when you consider that majoring in education is one of the least rigorous ways to get through college.

CAP’s work is also odd, and they’re held, as far as I know, to higher editorial standards than what Vox’s foibles have suggested. Their main point is that middle- and late-career teachers don’t see their incomes rise as much as people in other professions do. Leaving out pensions here is especially misleading, and basically is the only way they end up having a point: Teachers see the compensation they’re earning in terms of future pension wealth accelerate dramatically in the latter half of their careers, which would largely erase the lack of salary raises.

And it may seem like a nice idea to reward long-serving teachers, but in a world of scarce resources, this isn’t a good policy priority at all: Teachers don’t get any better in the middle and latter parts of their careers. (It’s a fairly well accepted finding that they get better in the first few years, maybe the first five or so, and then don’t get any better.) If teachers got more step raises, as CAP points out they do in other countries, this would actually worsen a bias toward paying older teachers more than younger ones, and directing compensation dollars where they aren’t best used.

Now, this isn’t to say that there isn’t a case for paying teachers more in certain ways – there is a great case for doing so, because great teachers are very valuable. I’m not sure it really requires higher education spending overall, because so much compensation is inefficiently distributed and because, with better teachers on average, we could probably stand larger class sizes. And at the end of its report, CAP alludes to a couple good and a couple not-so-good ways school districts have increased compensation with the intent of paying good teachers more, not paying all teachers more. (A not-so-good model is where teachers are paid more for accumulating training or education, which, as such programs stand, doesn’t seem to make them any better at teaching.)

That’s how we should be reassessing teacher compensation: figuring out how to attract and motivate highly effective teachers, rather than considering some vague sense of social justice about what teachers are owed based on how much we care about them, which is what the Vox piece and much of CAP’s report get at.