Why teacher salaries are flat as school spending soars
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Why teacher salaries are flat as school spending soars

Benefit costs, staffing trends and class sizes may explain why teacher salaries have remained flat while K-12 education spending has grown.

In a recent poll published by Harvard’s Education Next, 60 percent of respondents, and nearly half the Republicans surveyed, thought teachers should be paid more than their statewide average. With red states such as Florida, Oklahoma, and Iowa prioritizing the issue in 2022, an important question policymakers should be asking is why record levels of public-education spending haven’t already led to teachers being paid more.

Nationwide, inflation-adjusted average teacher salaries have been nearly flat since the turn of the century, going from $64,986 in 2000 to $65,090 in 2021. But there’s significant variation among states, with inflation-adjusted pay increasing by 10 percent or more in nine states — including Washington, Massachusetts, and Oklahoma — and decreasing by 20 percent in Indiana over that same timeframe. Average teacher salaries now range from less than $48,000 in Mississippi to nearly $88,000 in New York.

Many factors play into salary trends, with cost-of-living contributing to differences across states. Less noticeable is that the U.S. teacher workforce has shifted over time with proportionally fewer veterans in classrooms, making longitudinal comparisons imperfect. But when average salaries are broken down by experience level a similar picture emerges: Teacher salaries have barely outpaced inflation.

None of this means that taxpayers haven’t done enough to support public schools. Between 2002 and 2020 real U.S. public education spending increased by 25 percent per student and now stands at over $16,000 per student on average. In total, per-student education revenue increased in 49 of 50 states from 2002 to 2020 with ten states boosting funding by more than 33 percent.

In short, more education money hasn’t resulted in larger paychecks for teachers in many states. For instance, Illinois has increased education funding by 55 percent per student, yet average teacher salaries have declined, with similar trends playing out in Connecticut, Pennsylvania, and elsewhere.

So where are education dollars going, if not to boost teacher salaries?

For starters, real spending on employee benefits — a Census reporting category that includes teacher pensions, health insurance, and other expenditures — increased by 79 percent between 2002 and 2020, going from $1,907 per student to $3,406 per student. Salaries accounted for 74 percent of teacher compensation in 2004 they now account for just 65 percent, mainly due to ballooning retirement debt.

But pension benefits haven’t gotten better for many teachers, they’ve only grown more costly. For years, most states have failed to adequately fund their retirement obligations, with the public retirement research organization, Equable Institute, estimating a nationwide shortfall of $878 billion in teacher pension plans. As a result, an average of 20 percent of public school payrolls are eaten up by employer pension contributions, most of which goes to cover debt costs that don’t benefit current teachers.

Public schools have also been on a hiring binge in the last couple of decades as the latest available data show staff growth — nearly 7 percent for teachers and 20 percent for non-teachers — outpaced a modest 2 percent bump in public school student enrollment nationwide. This trend is especially pronounced in Pennsylvania, where over 23,000 employees have been added to the state’s public-school payrolls despite a 12 percent enrollment dip since 2002. Such a stark contrast leaves no doubt that public schools have prioritized staffing up over teacher salaries, a costly strategy with little student performance benefits to support it.

Differences in average student-teacher ratios between states also highlight the inherent tradeoff between teacher salaries and class sizes. All else being equal, states forgo increases to teacher pay when they use new education funds to decrease class sizes or to keep class sizes small. State variations in average class size might explain why lower-spending states with above average student-teacher ratios like Nevada and Utah pay teachers better than their spending rankings would suggest, while relatively higher spenders with low student-teacher ratios like West Virginia and North Dakota pay teachers less.

To be sure, there isn’t a simple answer to whether the country’s 3.2 million teachers are underpaid as compensation is more than just salaries and local context matters. But any meaningful policy aimed at delivering more dollars to teachers requires fixing the structural problems diverting education funding away from salaries. At the state level, this involves tackling the pension debt crisis by paying down legacy costs, like Arizona and Michigan have done in recent years. School-district leaders should also reconsider spending priorities, which might mean standing up to teachers’ unions that push for expanding membership rolls.

With the amount of money being spent on K–12 education in most states, there’s no reason for teacher salaries to be an issue. But without structural reforms, there’s little reason to expect that more funding will deliver the payday that teachers expect and voters want.

A version of this article previously appeared in National Review.