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News from EPI Pennsylvania public school teachers face a 12 percent pay penalty

A new EPI paper by Rutgers Professor Emeritus Jeffrey Keefe finds that Pennsylvania’s public school teachers earn lower wages and lower total compensation (wages and benefits) when compared with similarly educated and skilled workers in Pennsylvania.

Keefe compares public school teachers in Pennsylvania with comparable full-time workers, controlling for factors like education, experience, gender, and ethnicity, and finds that public school teachers earn 12.1 percent less in weekly wages and 6.8 percent less in weekly total compensation.

Keefe stresses that a new pension plan for Pennsylvania teachers, passed into law in June 2017, will increase the compensation penalty for newly hired teachers beginning in 2019. Currently, teachers in Pennsylvania receive defined benefit pensions, but under the new plan will move to more common 401(k)-style retirement accounts. Because of this move, teachers’ weekly compensation penalty will increase from 6.8 percent to 10 percent.

“Pennsylvania is in the midst of a growing teacher shortage,” said Keefe. “Research shows that teachers are underpaid even with high experience and education levels. In order to recruit and retain highly qualified teachers, Pennsylvania should at the very least maintain its defined benefit pensions at the same levels.”

Additionally, Keefe highlights the economic benefit that union membership provides teachers in the United States. Teacher union membership on average results in 5.4 percent higher wages and 5.1 percent higher total compensation when compared with the compensation of nonunion public school teachers.