Are Teachers Paid Too Much? How 4 Studies Answered 1 Big Question

A new study says public school teachers earn way too much. Another found that teachers earn way too little for their skills. Can both be true?


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American public school teachers are paid far more than their smarts are worth.

That's the provocative conclusion of a new study from two high-profile conservative think tanks. Researchers from the Heritage Foundation and the American Enterprise Institute found that public school teachers take home total compensation that's 52% higher than "fair market levels" for professionals with similar cognitive abilities.

Unsurprisingly, their findings have riled the education world. "No, we do not agree that teachers are overpaid," public school reform advocate Michelle Rhee told Politico. "Under the status quo in most school districts, good classroom teachers are not only undervalued in pay, but as professionals generally."

Of course, this isn't the final word on teacher pay. It's just the latest word. Big sweeping statements about teachers being overpaid or underpaid are perennial in the think tank world. Here are four of the biggest.

Manhattan Institute: Overpaid! Teachers make a killing by the hour.

The Study: Evaluating teacher pay against other professions is notoriously difficult thanks to that hulking gap in the work year known as "summer vacation." So in 2007, The Manhattan Institute for Policy Research, a conservative think tank, tried to get around the problem by looking at hourly wages. The researchers dove into data from the Bureau of Labor Statistics for metro regions around the United States and for 85 separate occupations.

The Conclusions: Public school teachers did pretty well by the hour. In 2005, they worked an average of 36.5 hours per week at an average wage of $34.06 an hour. That was better than 61% of the other occupations the researchers examined, including architects, psychologists, chemists, mechanical engineers, economists, and journalists (!). There were big variations by metro area, but teachers still generally beat out their peers. Raleigh, North Carolina, was the only metro area where public school teachers made less than the average white collar worker. In Louisville, Kentucky, they made 79% more.

The Big Criticisms: In what world do teachers actually only work 36 hours a week? The researchers acknowledge that teachers report taking work home at particularly high rates. But they try to get around it by noting that other professions have the same problem. That doesn't fix the issue. All it means is the BLS data is unreliable when it comes to measuring how much people actually work for their pay. The left-leaning Economic Policy Institute (EPI) has also savaged this study for failing to note discrepancies in way the BLS measure teachers' work weeks vs. other professionals. (Still we won't disagree with one aspect of these findings: Journalists most certainly are underpaid.)

Economic Policy Institute: Underpaid! Teachers make much less than professionals with similar skills and education.

The Study: The left-leaning EPI has a running study that periodically tracks what it calls the "teaching penalty." Its most recent update reflects data from 2010, and measures teacher pay based on age, experience, and geography. It also looks at changes over time and reviews some of the current literature. In other words, it's a bit of a beast. But, for our purposes, there are two key stats--pay versus other college graduates and pay versus "comparable" occupations. How do they pick "comparable" fields? Using skill level data compiled by the BLS, which rates jobs based on factors such as complexity and the knowledge base required to perform it. When they last ran the analysis in 2008, the researchers settled on 16 different other professions, including accountants, reporters, registered nurses, computer programmers, and clergy.

The Conclusions: Overall, the EPI finds that teachers make about 12% less than other similarly educated workers. The picture only changes a little when you factor in benefits. Extrapolating from trends they found in 2006 data, the researchers estimate that total compensation for public school teachers lags by 9%. Compared to professions requiring similar skill levels, the wage gap was 14.3%.

The Big Criticisms: Just because you went to school for a long time doesn't mean you deserve more money. It just means you went to school for a long time. What's more, everybody acknowledges that most elite graduates don't go into teaching, anyway. Even EPI concedes that "a small and declining fraction of the most cognitively skilled graduates have elected to enter the teaching profession."

Heritage-AEI: Overpaid! Teachers earn too much for their level of smarts.

The Study: The Heritage-AEI study seeks to correct what it sees as a major flaw in past assessments of teacher pay. Ordinarily, researchers like compare teacher salaries to what other similarly educated professionals make. Jason Richwine and Andrew Briggs think that's foolish. Years of research has shown that education degrees are among the least challenging, they write, and higher levels of education don't necessarily correlate to better teacher performance. It's more effective to compare teachers to other professionals who have the same objective cognitive abilities. In other words, break out the IQ tests.

The Conclusions: What they find isn't exactly complimentary. "Although teachers as a group score above the national average on intelligence tests, their scores fall below the average for other college graduates," the pair write. Teachers, they find, also score lower on their SAT and ACT. Finally, they break out data from the National Longitudinal Survey of Youth to analyze the effects of both education and IQ. When education is taken into account, teachers salaries are more than 12% lower than their peers. But when measured based on cognitive skills, the salary gap evaporates. Once you factor in benefits such as retiree healthcare and pensions, total teacher compensation starts to eclipse what others in their cohort make. To top it all off, teachers tend to take a pay cut when they move to other professions.

The Big Criticisms: Richwine and Briggs paint with a broad brush, lumping teachers together from across geographic regions and subject area expertise. It may be that math and science teachers are underpaid while gym teachers are making a steal. But their study can't tell. The two researchers acknowledge that problem. Of course, there's also some controversy about whether "objective measures of cognitive ability" such as IQ and the SAT scores are really all that objective. But let's not get into the weeds.

Even if America's best and the brightest aren't becoming teachers, Richwine and Briggs' concede that there's a good argument for paying teachers more. As they note: "We have shown that existing teachers are paid above market rates, but recruiting highly effective teachers into the profession may require present levels of compensation or perhaps even higher levels." In the end, they just want to see pay-for-performance policies. That puts them on the same wavelength as, well, Michelle Rhee.

OECD: Underpaid! We pay teachers much less compared to other countries.

The Study: To wrap it up, let's add a little international perspective. This year, the OECD released a long report on ways to improve education worldwide. Part of it looked at teacher pay across different countries.

The Conclusions: Worldwide, teachers tend to make less than other college graduates. But even in that realm of diminished expectations, the U.S. still doesn't look so hot. According to the OECD's findings, we pay our teachers about 60% of what their educational peers earn. That's way less akin to developed countries like Germany and Australia, where pay is closer to 90%, and more in line with Italy, Poland, and Slovenia.


The Big Criticisms: Again, you can argue about whether college education is a good benchmark for measuring professional qualifications. But beyond that, the numbers just look a little funky. No matter what their methodology was, all of the U.S.-based studies on teacher pay I read found educators making more than 60% of what their peers earned. Teachers aren't swimming in cash. But they don't have it that bad.