Teacher pay is by far the largest cost of operating a school.

People choose to become teachers for many reasons, but getting rich is not among them. As a job, teaching is steady, secure work — usually with good benefits and the promise of a solid pension in retirement. But the pay is modest, especially for new teachers.

This lesson explains how teacher pay systems usually work, how teacher pay compares to other work, and some alternative approaches that have been proposed, including systems of merit pay.

New teachers are poorly paid

Many new teachers begin their career saddled with college debt. It's common for them to struggle to find places they can afford to live, and it is common for teachers to work second jobs.

In decades long past, teaching was once perceived as a relatively lucrative profession for women, whose professional options were constrained. This premium has evaporated.

According to the California Department of Education, the average annual pre-tax salary for teachers in 2021-22 was $88,508, with a lot of variation. Beginning teachers made about $50,000, and the highest-paid teachers made a little more than $100,000. Teacher pay tends to be higher in areas where the cost of living is higher.

How has teacher pay changed?

Taking the long view, average teacher pay in the USA has basically kept pace with inflation. Average pay for teachers has floated along a bit better in California than it has in other states:

Unfortunately, keeping up with inflation is a very low bar for a profession that requires a college degree. Since the 1980s, pay for teachers in America has lagged comparable employment, as described in Lesson 3.1.

Dr. Sylvia Allegretto, an economist with the Economic Policy Institute (EPI) at the University of California, Berkeley, has studied teacher compensation for many years. The EPI analysis incorporates survey data from all over the US, including reported hours worked, salaries, bonuses, benefits, gender, age, experience, union membership and geography. According to the EPI 2023 analysis, after expanding for years, the national wage gap for teachers in America reached another all-time high in 2022. Pay for teachers in California is higher than it is in most states, so the gap is smaller.

Why aren't more men teaching? Pay is certainly part of the story. In 2022, men teaching in U.S. public school made 36.6 percent less in wages than men in other comparable professions according to the EPI analysis.

Teacher pay in California is probably better than the EPI annual survey suggests. Teachers are public employees, so their actual pay is public record. (Yes, you really can look up an individual public school teacher's pay.) Improved computational power has made it possible to crunch the data in a way that wasn't feasible when EPI developed its annual survey. In 2023, an analysis by Transparent California argued that the EPI methodology systematically underestimates teacher pay.

Other countries pay teachers better

The Organization for Economic Cooperation and Development (OECD) collects data about public education from around the world, including data about teacher pay. According to OECD data from 2022, The wage gap for teachers is much worse in America than it is in most other developed countries.

Teacher pay varies by school district

Teacher salaries and other compensation are local decisions, typically negotiated between local school districts and local teacher unions. In these negotiations, the local cost of living is an essential factor. What drives differences in the cost of living? More than any other factor the answer is rent. In 2019, EdSource researched housing affordability for teachers in the state, finding that many of the areas where teachers are paid the most are where teachers can least afford to live.

School districts are very sensitive to the local cost of living. Where rents are high, teacher pay has to be high, too. In 2018, the St. Louis Fed studied the correlation. A picture paints a thousand words:

The district salary schedule sets teacher pay

Teacher pay rates are usually determined by just two things: years worked in the district and number of postgraduate credits earned as recognized by that district.

Teachers in virtually all U.S. public schools are paid according to a rigidly defined single salary schedule. If you know the number of years a teacher has worked in a district (steps) and the number of postgraduate college credits the teacher has completed (columns or lanes), you can determine their pay. This information is usually presented as a table, but for our purposes a line graph is better. Below are some simplified salary schedules from districts in 2023.

In these graphs, teachers begin their career on the left, usually following the lowest line, marked BA (bachelor's degree). Over time, pay for teachers with just a BA degree rises, but teachers can boost their pay if they qualify to jump to a higher line in the chart by earning additional college credits.

The line charts above simplify the system a bit by basing everything on B.A. and units. Many districts accelerate steps in the schedule for teachers that earn a master's degree or Ph.D. Some districts adjust the schedule or offer bonuses to those who teach in hard-to-fill positions. But the big picture is consistent. Salaries are a factor of years of service and college study.

A few caveats are in order. First, this lesson is narrowly about teacher paychecks based on their primary pay as teachers. In some districts, teachers earn additional amounts for other work like coaching, mentoring, or serving as a crossing guard. Second, as we will discuss in Ed100 Lesson 3.11, pensions are a profoundly important part of the overall pay system for teachers. You have to read that lesson. Non-salary benefits like health insurance are important, too, as explained in Ed100 Lesson 3.7.

Are teacher salary schedules good or bad?

Historical context: Salary schedules came into common use in the late 1800s as a way to make pay systems easier to administer. Early differentiated salary schedules were explicitly racist and sexist — districts had multiple schedules that specified the different amounts people were paid for the same work. Establishing a single salary schedule was an important aim of movements for change in the 1920s, beginning with Denver and Des Moines. In 1974, education historian Jean Protsik estimated that 97 percent of all schools used single salary schedules by the end of the 1950s.

The good news: Single salary schedules all but erased discriminatory pay practices related to gender and ethnicity in education. They also reduced the scope for jealousy, conflict, and drama about pay. The system is what it is for all teachers. Don't like it? Get a side hustle for the summer or after school, but don't imagine that somebody else in the break room is making bank at your expense.

The bad news is that the single salary schedule system has played a role in making the teaching profession significantly less competitive in comparison to better-paying work. It is rigidly indifferent to expertise, effectiveness, and market conditions. Teachers typically earn the same regardless of whether they teach effectively or ineffectively, whether they teach a subject that requires general knowledge or specialized knowledge, whether they teach many children or just a handful, and whether or not they bring out the best in their colleagues.

As shown in the charts above, the single salary schedule system provides two ways to earn more money as a teacher: keep teaching (without changing school districts), and take more college classes. Unfortunately, as discussed in Lesson 3.5, these incentives are misaligned with the interests of students. Other than in STEM subjects, there is no evidence that earning more college credits makes teachers better at their job.

The related subjects of teacher tenure and seniority will be explored in Lesson 3.10.

Alternative approaches to teacher pay

Some argue that teacher pay systems need to change in big ways in order to attract and motivate top talent and serve students effectively. In various places, reform-minded advocates in districts and unions have suggested that the salary model should be "on the table" in district and union dialogue about strategies for change. This section summarizes some of the key ideas and what's known about them.

Reforms related to teacher pay propose to revise the salary schedule (or replace it altogether) in order to change the incentive structure. (See puzzle graphic for examples.)

Should teachers be paid for performance?

All elements of an alternative compensation (altcomp) program are controversial, but none more so than performance pay, sometimes also known as merit pay. Pay-based incentives are common in business, especially in sales roles. Many businesspeople regard it as self-evident that teacher pay should vary with performance, too.

Many teachers, by contrast, regard it as self-evident that such incentives are patronizing because if teachers were in it for the money they would choose another line of work.

In 2009, Daniel Pink brought attention to the motivational risks of pay for performance in his bestseller Drive: the Surprising Truth About What Motivates Us. The heart of Pink’s thesis is that intrinsic motivation comes from a desire to achieve mastery, autonomy, and purpose. He presents evidence that conditional pay incentives can actually interfere with that drive.

Does teacher merit pay work?

If your school or district is considering changes to the way teachers are paid, prepare for a bumpy ride. Do your homework.

The short answer is no. Experiments with pay-for-performance trials have repeatedly produced disappointing results in the USA and other developed markets (OECD) Paychecks can serve as a nudge factor in a teacher's decision to stay at a school or in a role, but they appear to have little or no influence in day-to-day work. A decade of experiments in U.S. states based on the federal Teacher Incentive Fund program suggest that merit pay designs are great at producing conflict, mistrust, confusion and distraction, but lousy at producing measurable positive results.

Most tests of incentive systems for teachers have been modest, offering only small bonuses and producing no clear benefit. Some argue that such experiments are merely too tentative. An evaluation of the most aggressive of all pay-for-performance plans, the IMPACT program in Washington, D.C., showed some results… mainly by spurring low-performing teachers to quit! Bruce Baker, a professor at Rutgers University who comments extensively on flaws in the interpretation of data about education results, questions whether getting teachers to quit actually counts as a positive result.

Modest changes

The National Center for Teacher Quality (NCTQ) inspects the teacher contracts of America's largest districts to track changes. According to an analysis in 2021, teacher evaluations were in some way connected to salary increases in nearly half of them. Evaluation practices can vary widely, as we will discuss in Ed100 Lesson 3.9.

Like many states, California has a chronic shortage of teachers with the proper credentials to teach students with special education needs. In order to attract candidates and fill positions without burning out unprepared teachers, the 2021 budget included an investment of $90 million into tuition fellowships for aspiring teachers who committed to teach subjects with shortages, including special education.

If your school or district is considering changes to the way teachers are paid, prepare for a bumpy ride, particularly if the program involves judgments about performance. You can add a lot to the conversation by doing the homework that others may avoid. It is a much more complex topic than most believe, and the evidence of impact from past attempts is weak compared to the certainty of distracting conflict associated with attempting it. It's helpful to view Laney's story, the video at the top of this lesson, and consider what she needs to be successful.

Updated November 2023