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News from EPI Teachers are paid almost 19 percent less than similar workers: When including benefits, teachers still face an 11 percent compensation penalty

In a new paperEPI Distinguished Fellow Lawrence Mishel and UC Berkeley Economist and EPI Research Associate Sylvia Allegretto find that teachers’ wages and compensation continue to fall relative to comparable workers. When adjusted for education, experience, and demographic factors, teachers earned 4.3 percent less than other workers in 1996, while in 2017 the teacher wage penalty grew to 18.7 percent.

Although teachers on average enjoy better benefits packages than similar workers, Mishel and Allegretto find that benefits only mitigate part of the wage gap. Including benefits, teachers are still left with a record-high 11.1 percent compensation gap compared to similar workers. This stands in stark contrast to 1994, when teachers faced only a 1.8 percent wage penalty and no compensation penalty.

Teacher strikes in Washington, West Virginia, Oklahoma, Arizona, North Carolina, Kentucky, and Colorado have raised the profile of deteriorating teacher pay as a critical public policy issue. Teachers and parents are protesting cutbacks in education spending and a squeeze on teacher pay that persist well into the economic recovery from the Great Recession. These spending cuts are not the result of weak state economies. Rather, they were enacted by state legislatures to finance tax cuts for the wealthy and corporations.

“Deteriorating teacher pay is not just a fairness issue. Eliminating the teacher pay penalty is crucial to building the teacher workforce we need. In order to recruit and retain talented teachers, school districts need to address the inadequacy of teacher pay,” said Mishel. “As we’ve seen across the country in states like Washington, Arizona, and Oklahoma, teachers are tired of working demanding jobs with low pay.”

The growing wage penalty for teachers has contributed to an insufficient supply of effective teachers at every stage of the career ladder. Moreover, increased pressure from testing, state budget cuts, and demand for smaller class sizes has put strains on retaining sufficient mid-career teachers.

“To address teacher shortages, it is necessary to focus on both recruiting and retaining high-quality teachers,” said Allegretto, “Many policies are needed to accomplish this goal, and providing appropriate compensation is a necessary, major tool in addressing shortages.”

Other key findings include:

  • Since 1996, teacher pay has decreased $27 per week (adjusted for inflation) from $1,164 to $1,137 in 2017. In this same time period, college graduates’ average weekly wages have increased from $1,339 to $1,476 in 2017.
  • The wage penalty has grown remarkably among women. In 1960, female teachers earned 14.7 percent more than comparable female workers. However, in 2017, the authors find a 15.6 percent wage gap for female teachers.
  • The wage penalty for male teachers is much larger. The male teacher wage gap was 22.1 percent in 1979 and improved to 15.1 percent in the mid-1990s, but worsened in the late 1990s into the early 2000s. It stood at 26.8 percent in 2017.
  • The erosion of teacher pay relative to that of comparable workers in the last couple of years— and in fact since 2008—reflects state policy decisions rather than the result of revenue challenges brought on by the Great Recession. A recent study found that most of the 25 states that were still spending less for K-12 education in 2016 than before the recession had also enacted tax cuts between 2008 and 2016. In fact, eight of the 10 states with the largest reductions in education funding since 2008 were states that had reduced their overall “tax effort”—meaning through tax cuts or other measures they were collecting less in taxes relative to their capacity to generate tax revenue. These eight states were Alabama, Arizona, Florida, Georgia, Idaho, Kansas, Oklahoma, and Virginia.
  • The report provides teacher weekly wage penalties for each state for the period of 2013–17. These wage penalties adjust for education levels but not for other factors. The states with the largest teacher wage penalties include several where recent teacher protests drew attention to the erosion of teacher pay: Arizona, North Carolina, Oklahoma, Colorado, and Virginia.

Allegretto and Mishel estimate teacher wage penalties using regression analyses which compare weekly wages of public school teachers to other workers with comparable levels of education, experience, race, ethnicity, and other wage setting factors. By using a measure of weekly wages, the analysis avoids having to adjust for teachers’ so-called “summers off.” Allegretto and Mishel use data on teacher and professionals benefits and wages to adjust the teacher wage penalty estimates for the advantage teachers enjoy in having better benefit packages, deriving a compensation penalty which nets out the impact of both wages and benefits.