New report shows growing teacher pay gap compared to other fields requiring college degrees

New report shows growing teacher pay gap compared to other fields requiring college degrees

A new report from the Economic Policy Institute shows that average weekly salaries for teachers are nearly 20 percent lower than pay for similarly educated employees in other fields, and the gap has been growing for decades. The teacher pay penalty in Kansas is slightly worse than the national average. Adding non-wage benefits like insurance and retirement plans reduces but does not eliminate the growing gap.

 

Kansas education leaders have been raising concerns over a growing teacher shortage for several years, as fewer students enter teacher training programs and others leave the profession. This report suggests a major reason is that teacher pay has not only fallen behind inflation, but behind other professionals as well. Here are some of the key findings of the report.

Teacher salaries are increasingly lagging behind other professions requiring college degrees.

Average weekly wages for teachers have long been lower than average wages for non-teacher college graduates, but from the late 1970’s to the mid-1990’s, pay increased at about the same rate for both groups.

Since 1996, however, teacher pay nationally, when adjusted for inflation, has actually fallen about $20 per week, while non-teacher pay has increased by $323 per week.

The pay gap between teachers and other college graduates has widened, especially for male teachers.

This teacher pay gap or penalty is now 21.4 percent for all employees and has widened from 6.3 percent in 1996. Because professions dominated by men have traditionally earned more than teaching, which has been traditionally dominated by women, the pay gap for men is greater – 31.5 percent, compared to 15.1 percent for women. Prior to the mid-1990’s, female teachers actually earned more on average than female non-teachers with comparable education.

The report blames the widening pay gap on state tax and funding cuts.

The report says state tax cuts were a major contributor to the widening pay gap, at least since the Great Recession of 2008. In fact, the “teacher penalty” decreased slightly around 2010 as private sector wages fell, but it grew more rapidly as the economy recovered. The authors say: “It is noteworthy that the wage penalty shrank in the early portion of the Great Recession, as private-sector wages fared worse than those in the public sector, reflecting the greater short-run stability of teacher wages due to long-term contracts. This trend was more than reversed in the recovery beyond 2010 as state and local spending cuts sapped teacher wage growth while private-sector wage growth accelerated.”

In Kansas, average teacher salaries lagged behind inflation every year from 2009 to 2017, which includes the period of state income tax cuts passed in 2012 and largely repealed in 2017. Kansas teacher salaries also lagged behind the U.S. average for teachers and other private sector employees. (See previous post.) Following the repeal of Kansas tax cuts and in response to the Kansas Supreme Court’s Gannon school finance decisions, the Legislature boosted K-12 funding in 2018 and 2019, and teacher salaries rose faster than inflation for the first time in a decade. (See previous post.) This trend is expected to continue as additional state funding is phased in.

Whether because of, or in spite of, state income tax cuts, Kansas personal income growth has been among the lowest in the nation since 2013. This has also limited the state’s ability to increase school districts’ funding, which largely determines teacher pay.

The pay gap is reduced, but not eliminated, by better non-wage benefits for teachers.

Teachers receive higher benefits in the form of insurance and retirement plans than non-teachers. For non-teachers, non-wage benefits are over 20 percent of total compensation; for teachers the percentage is nearly 30 percent. The authors found this “benefits advantage” was 8.4 percent for public school teachers in 2018, which reduced the 21.4 percent wage penalty to a 13.1 percent deficit in total compensation.

The authors say while the benefits advantage is important to note, wages have a more immediate impact on individuals. “While the total compensation penalty rounds out our understanding of how teachers are faring compared with other professionals, the growing wage penalty is still important and critical to keep in mind given the different natures of wages and benefits—only wages can be spent or saved!”

Again, the Kansas experience reflects the national trends noted by the report. For example, school Kansas school districts increased spending on salaries for all employees by 38.3 percent from 2004 to 2018, but employment benefits increased by 170.3 percent.

In particular, Kansas Public Employee Retirement System contributions for school districts increased from $110.9 million to $375 million or 238 percent. Increased KPERS funding has been largely driven by the efforts to make up for past underfunding, not new benefits. These funds will eventually be help pay for retirement benefits for school district employees, but are also dollars not available for current teacher salaries.