“American teachers are underpaid.” That’s how Professor Dick Startz begins his recent article, “Teacher Pay Around the World.” He goes on to describe how, compared to other members of the OECD, the ratio of American teachers’ salaries to those offered in alternative career paths is quite low.
In fact, on average, American teachers make roughly two-thirds of what their peers in other careers make. To make this more concrete, consider two students graduating from the same college at the same time, with similar backgrounds and qualifications. One decides to go into, say, some sort of business field, while the other decides to become a teacher. By the time our business maven is making $80,000 per year, our teacher would be making roughly $55,000. That’s a pretty big gap.
Professor Startz isn’t saying anything new here. The National Center on Education and the Economy (NCEE), which Startz cites in his own article, found in 2012 that starting salaries for lower secondary (i.e., middle school) teachers in America are only 72% of GDP per capita, while Finnish starting salaries are 90% of GDP per capita. In 2008, the Economic Policy Institute (EPI) reported similar findings. (Note that in In 2012, US GDP per capita was $51,456.70.)
Now, I always ask first, why does this matter? Two reasons jump out for me. First, having high-quality teachers is one of the most important factors determining student success, and let’s face it—we all want students to succeed. Receiving a quality education is one of the surest paths to a high standard of living, as Phillip Oreopoulis and Kjell Salvanes pointed out in 2011. It follows, then, that if we want students to stay in school and do well, we need to ensure access to well-qualified teachers.
Second is opportunity cost. This fundamental principle undergirds almost all of economics, and is fairly simple to understand. Say that you have the option to go to dinner with some friends, and you can choose to go to the new Mexican restaurant in town, or you can go to your favorite Italian restaurant down the street. The cost of your dinner, then, is not only the dollars you pay for the meal itself, but also the lost opportunity to use that time to go to the other restaurant.
As you might guess, this could get out of hand pretty quickly—after all, by choosing one restaurant, you’re also giving up all the possible meals you could have cooked for yourself, as well as all the meals you could have had at any other restaurant in town. To keep the concept simple, then, economists consider only the cost of giving up the next best option, since it’s unlikely you would have chosen the fourth or fifth or hundredth best option anyway.
How does this relate to teacher pay? For a young American college graduate deciding what to do with his or her life, choosing to be a teacher comes with a relatively high opportunity cost. Consider: according to the Bureau of Labor Statistics, the mean annual salary of all elementary and middle school teachers in the US in 2015 was $58,060. Compare that with a mean annual salary of $71,000 for registered nurses, $76,040 for clinical and counseling psychologists, $80,210 for real estate brokers, $84,360 for computer programmers, and $133,950 for marketing and sales managers. This means that young graduates who choose to go into teaching are giving up anywhere from $8,000 to $80,000 per year in income. (Of course, there are many career paths with an average salary below $58,060 per year, but as noted above, opportunity cost only considers the next best option, and so I am assuming that these lower-income careers do not fit that category.)
With all of this in mind, the question that inevitably raises its head is this: how do we make teaching a more attractive career option for our most highly qualified graduates? One option is to simply pay them more, but this is not always a politically or fiscally viable alternative, as public school teachers are public employees whose salaries come out of the taxpayers’ pockets. Another option would be to find forms of non-monetary compensation that would make up for the lack in income, perhaps by working to consistently increase teachers’ sense of purpose. (Finding work meaningful is a huge factor in job satisfaction.) A third option, and probably my personal favorite, is to increase the prestige associated with teaching. The NCEE, as cited above, notes that Finland has achieved this in part by making it incredibly difficult to become a teacher. As Slate reported in 2014, only about 10% of Finnish applicants to teacher colleges are accepted, and the result is a higher level of confidence in teachers’ ability to perform their job successfully, as well as a greater overall respect for the teaching profession.
Regardless of what solution is ultimately accepted, the data seem pretty clear: if we want to improve our educational system, a good place to start would be to make teaching a more attractive career for our most highly-qualified college graduates.