Blue Model Blues
Why Don’t Teachers Make More Money?

A new report from the Economic Policy Institute, a liberal think tank, seems to vindicate all of the standard blue model assumptions about what ails our education system: Teachers aren’t paid enough, and the solution is to spend more on K-12 and strengthen teachers’ unions. From the abstract:

The teacher pay penalty is bigger than ever. In 2015, public school teachers’ weekly wages were 17.0 percent lower than those of comparable workers—compared with just 1.8 percent lower in 1994. This erosion of relative teacher wages has fallen more heavily on experienced teachers than on entry-level teachers. Importantly, collective bargaining can help to abate this teacher wage penalty.

The authors note that the pay penalty shrinks to 11 percent when pensions and other benefits are included. Nonetheless, the message is clear: Fiscal hawks are selling teachers and students short by cutting funding and breaking up unions, teachers’ best tool for achieving higher pay. Most of the coverage of the findings in the mainstream media has been typically uncritical.

It’s possible to quibble with the findings in the report—other researchers, using different methodologies, have disputed the notion that teachers face a pay penalty. But let’s assume the EPI data are correct. Here are three other data points about education spending (from a Bellwether Education Partners paper we reported on in May) that the EPI study does not mention, but that might nonetheless have an impact on its not-so-subtle policy implications: First, per-pupil education spending has grown exponentially over the past several decades. Second, spending on teachers has remained constant as a share of overall education spending. Third, “without the need to pay down pension debts, the average American teacher could receive an immediate, permanent raise of 12 percent.”

In other words, if state and local governments (under intense pressure from unions) had not over-promised and under-funded their teacher pension funds for the past generation, about two-thirds of EPI’s reported salary gap could be wiped out overnight. It’s data like these that make skeptics cautious about giving more power to teachers’ unions and simply pumping more money into the existing system without changes to the way it is operated.

What is the best way to improve educational quality in the United States? There is good evidence that buried treasure can be found, even at our most underperforming schools, through relatively straightforward and inexpensive innovations. Tying teacher pay to performance, for one, has been shown to have a big positive impact on student performance—even though teachers fight such reforms tooth-and-nail. And a recent study found that an experimental IB program at Chicago’s public schools was a roaring success, dramatically increasing student graduation and college attendance rates.

Now, it may be that it is nonetheless good policy to hike education budgets even further to attract a better pool of teachers, as EPI suggests. But such a decision should be conditional on serious reforms of the way K-12 is operated: Increasing accountability, incentivizing innovation, and, most of all, bringing resource-draining pensions under control.

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