The teaching penalty

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Editorial by Kate Walsh and Emily Cohen

If nothing else, the very perception that teacher pay is low relative to other professions keeps top college grads from considering teaching. The reality about whether teacher pay is actually low comparable to other professions is more debatable. The Economic Policy Institute (EPI)--heavily funded by teachers unions but still self-proclaimed as an 'independent' think tank--has recently launched some grenades at those scholars who dare to claim that teachers aren't getting a raw deal. However, we're not altogether sure if the grenades hit their intended targets, as they wouldn't have been able to see their way through the fog of words that makes up this 61-page report.

For starters, there's way too much inside baseball by authors Lawrence Michel, Sylvia Allegretto and Sean Corcoran, who take on anyone who has ever disagreed with them or a unionist stance. They're consumed by defending the superiority of the government database that they use for estimating teacher pay, incredulous that other scholars including Eric Hanushek, Michael Podgursky and Jay Greene have chosen to use other sources. They then move on other scholarship that's annoyed them, including Marguerite Roza's work on teacher benefits and Marc Tucker on teacher pensions. Honestly, we felt as if we were eavesdropping at times--couldn't this have been handled in a few private emails?

One point they make is clear and rings true enough--the "pay premium" (the difference college grads who go into teaching earn vs. what college grads in other professions earn) has sharply eroded over the last 40 years, resulting in a wage disadvantage for female teachers of 13.2 percent in 2000 (see here). Not surprising (even though surprise is what is intended), since the relatively new opportunities for women to enter more lucrative fields such as investment banking, information technology and engineering have inflicted real damage on the attractiveness of the teaching profession. (Male teachers, who always experienced a negative earning differential, also experienced a growth in the pay gap though the change in the earning differential is not quite as pronounced as it is for women.)

Another slice of the data yields some interesting differences in the pay premium for new versus older teachers. New female teachers earn somewhat less than the average new college grad (-8.0 percent--a number that has improved in the past ten years) but the teacher pay that older females (ages 35 on up) receive is significantly worse than what their non-teaching peers earn, with a pay differential of negative 20 percent. In other words, when Ms. Jones approaches her twentieth year as a steadfast third grade teacher, her old college roommate just tripled her starting salary after being promoted to be the new VP of Sales. This disparity has always existed; it's just that now that more top female grads are choosing Wall Street over Sesame Street, the problem is many times amplified.

And there's the rub. As long as there is no way to differentiate the job Ms. Jones does as a third grade teacher from the performance of other teachers, she is eminently replaceable. In economic terms, a school district would be nuts to triple her starting salary--unless they were able to also show that Ms. Jones is routinely that much more effective than her peers at raising student achievement. Absent that, it's hard to imagine how doing the same job with the same responsibilities year after year will ever pay off financially.