Teachers Are Actually Overpaid, Report Says

The fact that public-school teachers are undervalued in this country has become something of a truism. They are "desperately underpaid," according to Education Secretary Arne Duncan. They are "the most undervalued resource in our society," claimed talk show host Tavis Smiley. "Salaries are too low," said George W. Bush in 2003. But a new report suggests that the opposite may be true.

Jason Richwine and Andrew Biggs, researchers at the Heritage Foundation and the American Enterprise Institute, two leading conservative think tanks, argue in a new report that the country's 3.2 million teachers may be overpaid by over 50 percent or more, given their salary, benefits, job security, and intellectual ability.

This isn't the first study to take on the politically sizzling issue of how much we pay the molders of our nation's young. And shockingly, the results fall pretty cleanly along ideological lines.

According to Census data, Richwine and Biggs admit that teachers do look underpaid; they receive a 20 percent lower salary than private-sector workers with the same level of education, and have benefits approximately the same.

These numbers are flawed, however, according to Richwine and Biggs. They show that the typical worker who moves from the private sector into teaching receives a salary increase of 8.8 percent, and the typical teacher who enters the private sector receives a pay cut of 3.1 percent. If teachers were underpaid, they write, "this is the opposite of what one would expect."

They also admit, however, that given the small sample size of workers who switch between teaching and non-teaching, "these data should not be considered precise." It is also probable that a private sector worker who would receive a significant pay cut from becoming a teacher is less likely to fulfill that mid-career calling.

Schools Out For the Summer!

The report further claims that the truncated work year of the average teacher skews the numbers. Teachers receive their salary for an average of nine months of work, which means their average workweek salary is higher than that of private employees, whose salary is for a full-year of labor.

This argument rehashes a 2007 report by The Manhattan Institute for Policy Research, another conservative think tank. That research looked at hourly wages. In weeks teachers worked, they labored apparently for 36.5 hours, and took home $34.06 for each of those hours, more than architects, psychologists, chemists, mechanical engineers, economists, and reporters. There's just one minor hole in this analysis: Teachers work 36.5 hours a week?

Teachers alleged higher salaries are cushioned by higher job security. The average unemployment rate for public school teachers between 2005 and 2010 was 2.1 percent, the report states, compared to an average of 3.8 percent for workers in similarly skilled occupations. That means less time, on average, job hunting without pay.

Earning Above Their IQ?

Since 2003, the left-leaning Economic Policy Institute has been doing a running study on how much teachers earn compared to other occupations with similar education and work experience, like accountants, reporters, computer programmers and clergy. As of 2010, teachers earned 12 percent less than members of those professions, 9 percent less if you tally in benefits.

The level of education measure obscures some important facts, according to Richwine and Biggs. While a large proportion of teachers have bachelor's or master's degrees, over two thirds have their highest degree in education, which they claim is not a particularly rigorous path of study. You don't have to work as hard and it's easier to score an A in education, supposedly, than in the sciences, social sciences or humanities.

While teachers score above average on national intelligence tests, they allegedly fare worse than other college graduates. Richwine and Biggs therefore conclude that teachers are overpaid, given their average raw intelligence. They get more bucks per IQ point (with IQ determined by the perhaps dubious measure of standardized tests).

But this also suggests that the teaching profession fails to attract and retain the highest skilled college students. So examined through a reverse lens, this could be an argument for even higher salaries.

Retiring In Style

The report also argues that teachers' benefits are more generous than private employees'. On the surface, both teachers and private sector workers receive benefits at about 41 percent of their salaries.

Pensions, however, are financed differently in the public and private sector. The public sector, the researchers claim, invests in risky assets with an approximately 8 percent rate of return. If the investments fall in value, the "public employers -- meaning, ultimately, taxpayers -- must increase their contributions to the pension funds."

If teachers and private employees contribute the same percent of their salaries to their pension funds, teachers will receive retirement benefits 4.5 times higher, according the report, because teachers have a guaranteed higher rate of return.

Richwine and Biggs emphasize that they are talking about the average teacher, not the best ones, and they recommend a pay system that rewards high performing teachers. Merit-based pay raises are already under consideration in Ohio and Florida.

In a statement, the American Federation of Teachers, a union that represents 1.5 million educators, stated that the report "defies common sense." The researchers ignore the fact, the AFT argued, that teachers work long hours outside the classroom grading papers, planning lessons and attending school events. The AFT also stated that teachers spend hundreds of dollars out-of-pocket, buying supplies for their students.

"Does this mean we should go out and arbitrarily cut teacher salaries? No," Biggs said at a briefing. The researchers simply wanted to correct the assumption that teachers were paid below market rates. Trimming benefits, they argue, won't cause a mass exodus of educators.

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