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Lesson 3.8

Pay:
How Has Teacher Pay Changed?

Great teachers should get bonuses, right? Unless…

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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, but it doesn't pay very well -- especially for new teachers. Many new teachers 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.

The Teacher Salary Project documents the economic struggles of teachers, and the impact that it has on children.

Since about 1980, teacher pay has lagged comparable employment, as described in Lesson 3.1. Dr. Sylvia Allegretto, an economist at the University of California, Berkeley, has studied teacher compensation for many years. Her analysis incorporates data from all over the US, including hours worked, salaries, bonuses and benefits earned. Her models allow for sophisticated comparisons, including differences in compensation by gender, age, experience, union membership and geography. According to Dr. Allegretto's analysis, the scale of the American "teacher wage gap" expanded to a record scale in 2015. In terms of weekly wages, teacher pay lagged comparable work by 23%. Including the value of benefits, the annualized total compensation gap reached a record 11%.

Notes: 'College graduates' excludes public school teachers, and 'all workers' includes everyone (including public school teachers and college graduates). Wages are adjusted to 2015 dollars using the CPI-U-RS. Data are for workers age 18–64 with positive wages (excluding self-employed workers). Non-imputed data are not available for 1994 and 1995; data points for these years have been extrapolated and are represented by dotted lines. Click image to visit the report, which includes more detail. Source: Economic Policy Institute. Authors' analysis of Current Population Survey Outgoing Rotation Group data. Click image to visit the report at epi.org.
Notes: 'College graduates' excludes public school teachers, and 'all workers' includes everyone (including public school teachers and college graduates). Wages are adjusted to 2015 dollars using the CPI-U-RS. Data are for workers age 18–64 with positive wages (excluding self-employed workers). Non-imputed data are not available for 1994 and 1995; data points for these years have been extrapolated and are represented by dotted lines.

Pay for teachers in America is also low in comparison with pay for teachers in other countries. The Organization for Economic Cooperation and Development (OECD) collects international data about public education, which it summarizes annually in its monumental publication Education at a Glance. The OECD methodology for comparing teacher compensation necessarily differs from Dr. Allegretto's work, but it is consistently applied among the countries studied. According to the OECD research, in virtually all countries pay for teachers has fallen below the average for college-educated workers, but the gap in America is unusually large. For example, in its 2017 edition (Table D3.2) the OECD report estimates that pay for primary teachers in America is about 57% that of comparable workers. In France and Germany, by comparison, it estimates teacher pay at about 90% that of other college-educated workers. International comparisons are always difficult, but it seems clear that teachers in Europe's biggest economies fare better than those in America.

The Salary Schedule Sets Teacher Pay

Teacher pay is usually determined by just two things: years worked in the district and number of postgraduate credits earned.

Teachers in virtually all American public schools are compensated according to a rigidly defined “single salary schedule.” If you know the number of years a teacher has worked in a district (“step”) and the number of postgraduate credits the teacher has completed ("column" or "lane"), you can determine his or her pay. Many districts offer a salary increase to teachers who obtain a master’s degree.

The good news is that the widespread use of a single salary schedule has reduced or even erased discriminatory pay practices related to gender and ethnicity. Paired with the teacher pension system (in most states provided through the State Teacher Retirement System, STRS), the salary schedule also has created strong "stay-put" incentives. Seniority is generally counted in terms of the number of years a teacher has worked in a specific district. Changing districts resets the teacher's seniority. Districts generally do not match an experienced teacher's pay when "stealing" a teacher from another district, reflecting the power of seniority-based pay systems in their teacher contracts. At the high end of the experience curve, teachers are paid more than they would be in a strictly competitive marketplace, and there is a real penalty to changing employers. This makes teachers inclined to stay with a district, even if it is a tough place to work, which contributes strongly to the stability of district faculty.

The bad news is that the single salary schedule system is 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 a handful, and whether or not they bring out the best in their colleagues.

Alternative Approaches

In the past few years a growing number of voices have argued that major changes to the salary schedule should be “on the table” in district and union dialogue about strategies for change.

Reforms related to teacher pay revise the salary schedule (or replace it altogether) in order to change the incentive structure. (See puzzle graphic for examples.) All elements of an alternative compensation (altcomp) program are controversial, but none more so than performance pay, sometimes also known as "merit pay".

Federal programs have offered competitive grants to accelerate adoption of alternative teacher pay systems, particularly performance pay systems. Under the Bush Administration, the Teacher Incentive Fund (TIF) committed several hundred million dollars to support programs that include a performance pay component. Under the Obama Administration, the much larger Race to the Top (RTT) and School Improvement Fund (SIF) programs also provided support for alternative compensation plans in schools with high concentrations of low-income students.

Pay-based incentives (sometimes called "merit pay") are very common in business. 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 teachers aren't in it for the money. 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 It Work?

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.

Evaluations of pay-for-performance trials have not shown widespread results in terms of student learning gains, though the results appear to vary according to program design. Those who hoped for magical results from pay-for-performance trials have been disappointed in Denver, New York and Chicago. A study of schools using the most prominent alternative compensation system, TAP, documented some student learning gains in early trials, but the effects seemed to fade.

Perhaps those experiments were merely too tentative. An evaluation of the most aggressive of all pay-for-performance plans, the IMPACT program in Washington, D.C., appears to show results, mainly by spurring low-performing teachers to quit. Bruce Baker, a professor at Rutgers 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.

The Gates Foundation provided grant funding that enabled Aspire, a charter school network, to implement a multi-faceted teacher evaluation system that includes a pay component. Jill Tucker, a California journalist with long experience covering education, describes the Aspire approach in SFGate.

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. The next lesson takes on the subject of teacher evaluation.

Updated October 2017

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Questions & Comments

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Carol Kocivar September 19, 2017 at 11:22 am
How do teacher salaries compare to others with the same level of education? Not well. The 2017 Education at a Glance: OECD Indicators finds that "Teachers earn less than 60% of the salaries of similarly educated workers." Here is the summary of findings:

http://www.oecd-ilibrary.org/docserver/download/9617041ec072.pdf
user avatar
Jeff Camp March 16, 2017 at 5:08 pm
Should California exempt teachers from state taxes? Versions of this proposal have come up a few times, including SB807 in 2017. It would cost about $600 million annually. Via Cabinet Report
user avatar
Jeff Camp November 18, 2016 at 3:42 pm
The pay gap for teachers continues to widen, according to Sylvia Allegretto of the Economic Policy Institute: http://www.epi.org/publication/the-teacher-pay-gap-is-wider-than-ever-teachers-pay-continues-to-fall-further-behind-pay-of-comparable-workers/
user avatar
Carol Kocivar October 28, 2016 at 12:33 pm
A Quick Look at the Teacher Shortage
Check out our blog that discusses the widening teacher pay gap.
https://ed100.org/blog/teacher-shortage
user avatar
Jeff Camp September 20, 2016 at 9:16 am
Housing is a growing problem for teachers as housing prices have risen much faster than teacher salaries. According to an analysis by Redfin, a national real estate brokerage, a rapidly-shrinking percentage of listings are priced within reach of a teacher salary. In several California counties there are literally zero properties that a teacher could afford to buy. The report includes links to images of example properties that teachers could afford in each county. https://www.redfin.com/blog/2016/09/california-housing-affordability-for-teachers.html
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Carol Kocivar - Ed100 December 4, 2014 at 10:57 am
A new report "SMART MONEY: What teachers make, how long it takes and what it buys them" from the National Council on Teacher Quality takes a look at teacher salaries across the country. One finding:
"Generally speaking, the salary trajectory for teaching is characterized by relatively small, incremental raises doled out each year, serving in stark contrast to many jobs in the private sector, with its system of promotions, bonuses and relatively rapid raises."
http://www.nctq.org/dmsView/Smart_Money
user avatar
Jeff Camp - Founder November 7, 2011 at 3:07 pm
In late 2011 The Atlantic published a summary of four studies on the question "Are Teachers paid too much" http://www.theatlantic.com/business/archive/2011/11/are-teachers-paid-too-much-how-4-studies-answered-1-big-question/247872/
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Tamara Schiff March 31, 2011 at 3:35 pm
TAP: The System for Teacher and Student Advancement is a comprehensive school reform that is reaching nearly 20,000 teachers and 200,000 students across the country. TAP is comprised of four essential elements that are Aligned by Design--one of which is a performance pay component. Along with career opportunities for advancement, a fair and transparent evaluation system and job-embedded professional development, teachers are able to earn more for their demonstrated performance. Teachers who take on additional roles and responsibilities are compensated accordingly, while all teachers in TAP schools are eligible for annual bonuses based on multiple performance measures including classroom observation scores, individual and school wide student achievement growth. As noted in your other sections, TAP also recognizes that we need to attract, retain, develop and motivate the most talented individuals for the teaching profession. Data show that TAP addresses the intrinsic motivation of teachers to strive for excellence and effectiveness, and results in a high degree of faculty collegiality, thus proving that pay for performance is compatible with these values when it is an integral part of a well-designed support system. The comprehensive implementation of TAP has proven to improve teacher effectiveness and student achievement. The paper linked above, as well as additional research outcomes can be found at http://www.tapsystem.org/publications/tap_research_summary_0210.pdf.

The teaching profession needs to make dramatic changes in order to ensure that the most effective teachers are in our classrooms. TAP provides an opportunity to make the changes necessary to improve teacher quality and student learning for all children.
user avatar
Don Shalvey March 31, 2011 at 8:18 am
The profession of teaching is one of the most noble and dignifying callings anyone could consider. Compensation starts with the joy and satisfaction that comes from increasing the opportunities your students will have as they grow and is closely followed by the satisfation that comes from working with stunning colleagues. Does financial compensation matter? Absolutely. A teacher's ability to earn a family sustaining income, live a comfortable life and help support the futures of their own children is an aspiration every teacher should achieve.
If we consider the facts that some subject areas like math, sciences and special education have enormous teacher shortages and that there are schools where many students have been traditionally underserved then addressing these needs with additional compensation is both logical and appropriate. It is also appropriate to recognize the value that a teacher adds to his or her students in the areas of intellectual, personal and social development. Outcomes matter both in terms of value to the studenmts and value to one's colleagues and the positive culture and climate at the school.
The challenge is how to do it in a fair and consistent manner. It is a challenge worth accepting knowing that more often than not the concept of fairness emerges locally rather than nationally. We must find ways to honor and recognize highly effective teachers and find incentives to have them continue to bring their talents and inspiration to youth for many years. I believe those incentives are a combination of an increased base compensation, incentive compensation for preparation, assignment and performance with a stroing nod towards insuring that they interact always with stunning colleagues and an effective and inspiring principal.
©2003-2017 Jeff Camp
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