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. But it doesn't pay very well, especially for new teachers. This lesson explains how teacher pay systems usually work, how teacher pay compares to other work, and some alternative approaches.

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.

According to the California Department of Education, the average annual pre-tax salary for teachers in 2020-21 was $86,000, 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 has risen over time, even adjusted for basic measures of inflation. But so have salaries for just about everything. Since the 1980s, teacher pay in America 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 is thorough, incorporating data from all over the US, including hours worked, salaries, bonuses, benefits, gender, age, experience, union membership and geography. According to Dr. Allegretto's 2022 analysis, after expanding for years, the teacher wage gap in America has reached an all-time high. In terms of weekly wages, teacher pay lagged comparable work by 32.9% nationally in 2021. Including the value of benefits, the annualized total compensation gap reached a record 14.2%. (Note: The gap is smaller in California (17.6%) than it is in most states.)

Why aren't more men teaching? Pay is certainly part of the story. In 2018, men teaching public school were making 31.5 percent less in wages than men in other comparable professions.

Pay for teachers in America is also low compared to 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. In the following chart, look to the right corner to find the United States.

Teacher pay varies by school district

Teacher salary and compensation are typically negotiated between school districts and teacher unions. The graphic below from the California Legislative Analyst shows the average package offered by districts in each county (Click image to view interactive version). Benefits in this view include health, dental, and vision coverage. Other benefits are not included, most notably pension (see Lesson 3.11) contributions or benefits. The map also makes no adjustment for variations in local costs.

The largest factor in local cost of living is the cost of rent, which greatly varies in different parts of the state. 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, and in the big picture, teachers salaries tend to strongly reflect these costs. In 2018, the St. Louis Fed studied the correlation. A picture paints a thousand words:

The district 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 as recognized by that district.

Teachers in virtually all American 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 (step) and the number of postgraduate credits the teacher has completed (column or lane), you can determine his or her pay, perhaps with the addition of a few small adjustments or incentives. Many districts offer a salary increase to teachers who obtain a master’s degree.

Those steps and columns can differ significantly from one district to another. For example, the graphs below show the basic salary schedules for Oakland Unified and San Mateo/Foster City in 2016. When teachers make a career move, pay is one important factor.

You might be asking - are these salary schedules good or bad? As usual, the answer is mixed.

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.

Seniority pay policies serve as "golden handcuffs"

Seniority is generally counted in terms of the number of years a teacher has worked in a specific district. Taking a job in a different district usually resets the teacher's seniority. Districts generally do not match an experienced teacher's salary when "stealing" a teacher from another district, reflecting the power of seniority-based pay systems in 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. Especially when paired with the teacher pension system (Lesson 3.11), the salary schedule encourages teachers to stay put, which contributes to the stability of district faculty. Teachers have economic reasons to stay with a district, even if it is a tough place to work.

The bad news is that the single salary schedule system 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. Also, as discussed in Lesson 3.5, there is little or no evidence that students benefit when teachers earn advanced degrees. This may be money that could be better spent.

Alternative approaches to teacher pay

Some argue that major changes to the salary schedule 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.)

Like many states, California has an acute shortage of teachers credentialed 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 commit to teach subjects with shortages, including special education.

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 and do your homework.

The short answer is no. Experiments with pay-for-performance trials have produced disappointing results. Paychecks might be a small factor in whether a teacher stays at a school or in a role, but appear to have little or no influence in day-to-day work. After a decade of learning from the federal Teacher Incentive Fund program, it's clear that programs introducing merit pay produce conflict, mistrust, and distraction more often than they produce 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.

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 October 2017
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