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Hey, teachers: The Heritage Foundation thinks you’re overpaid

Teachers are actually overpaid by at least 50 percent of their fair-market value, the paper argues.

A new policy paper from the Heritage Foundation, a conservative think tank that espouses free-market principles, argues that—contrary to popular opinion—teachers aren’t underpaid. Instead, the paper says, teachers are actually overpaid by at least 50 percent of their fair-market value, costing American taxpayers more than $120 billion each year in excessive labor costs.

Produced in partnership with the American Enterprise Institute for Public Policy Research (AEI), another research institution that champions conservative ideals, the paper compares the combined average wages and benefits of public school teachers with those of private-sector professionals who have similar skills. It concludes that wages for the two groups are about the same, while benefits and job security are significantly higher for teachers.

“Teacher compensa­tion could therefore be reduced with only minor effects on recruitment and retention,” wrote the paper’s authors, Jason Richwine and Andrew G. Biggs. “Alternatively, teachers who are more effective at raising student achievement might be hired at comparable cost.”

Richwine is a senior policy analyst at the Heritage Foundation’s Center for Data Analysis, and Biggs is a resident scholar at AEI.

Using data from the Census Bureau’s Current Population Survey, Richwine and Biggs found results that are consistent with other research: Public school teachers earn about 19 percent less in wages, on aver­age, than non-teachers with the same level of education.

But then, in a surprising twist, the researchers argue that advanced degrees for teachers aren’t as rigorous as those earned by private-sector employees—and so a better comparison would be to look at cognitive ability rather than years of education. (Editor’s note: See “Four fallacies of the ‘teachers are overpaid’ argument.”)

To do so, they examined scores on the Armed Forces Qualification Test (AFQT), a cognitive exam similar to an IQ test. They reportedly chose this test because the National Longitudinal Survey of Youth linked AFQT scores to other individual-level data, so they could do a regressive statistical analysis of AFQT scores along with other control variables. Participants in the longitudinal survey were paid to take the AFQT, so the scores weren’t restricted only to people who served in the military.

Richwine and Biggs claim that “the wage gap between teachers and non-teachers disappears” when public school teachers are matched with private-sector employees who have similar AFQT scores.

To bolster this claim, the researchers also argue that (1) average wages for public school teachers exceed those of private school teachers; (2) people who leave private-sector jobs to become teachers see an 8.8-percent wage increase, on average; and (3) teachers who leave the profession to work in the private sector experience a 3.1-percent wage reduction, on average. The latter figures come from an analysis of data from the Census Bureau’s Survey of Income and Program Participation, the researchers said.

Comparing the average benefits of teachers and private-sector employees is more problematic, Richwine and Biggs acknowledge—in part because of differences in their respective retirement plans.

Using information from the Bureau of Labor Statistics (BLS), among other sources, they calculated the dollar value of average vacation time as a percentage of yearly salary; the relative worth of teachers’ pensions versus 401K plans; and the value of other perks, such as health-care benefits. They concluded that public school teachers earn, on average, about 40 percent more in benefits than private-sector employees with comparable skills.

But Richwine and Biggs didn’t stop there. Noting that, according to the BLS, the average unemployment rate for public school teachers was just 2.1 percent from 2005-10, compared to 3.8 percent for other professions, they sought to quantify this higher relative job security enjoyed by teachers. They concluded that it’s worth an additional 8.6 percent of a teacher’s compensation package—bringing the total average value of teacher compensation to “52 percent above market rates.”

“Because of the large compensation premium that public school teachers enjoy, teachers are unlikely to receive better offers elsewhere,” the researchers wrote. “Policy makers should evaluate teacher compensation packages in light of this fact, particularly given the serious state and local bud­getary shortfalls across the country.”

Former teacher Jonathan Dearman is one of many people who would disagree. In the recent documentary film American Teacher, Dearman explained how he left the teaching profession for real estate when he found he no longer could support his family on his teacher’s salary alone.

“It just became a real vicious cycle … of burnout,” he said in the film.

That burnout is costing taxpayers billions of dollars each year, as 46 percent of teachers leave the profession before their fifth year—something the report does not acknowledge.

Saying the report “defies common sense,” Randi Weingarten, president of the American Federation of Teachers (AFT), noted in a statement that most teachers spend “hundreds of dollars per year” on classroom supplies out of their own pockets, and they work longer hours “than their peers in other nations”—including grading papers, preparing lesson plans, communicating with students and their parents, and attending school-related functions during evenings and on weekends.

Weingarten also criticized the report’s claim of an 8.6-percent “job security premium” for teachers, calling it an “arbitrary” figure that is “pure fiction, given the 278,000 public education jobs that have been lost during this recession.”

The report comes as school stakeholders nationwide debate a number of education reforms, including measures designed to improve teacher quality and retention.

On one side of these debates are conservatives, influenced by groups like the Heritage Foundation, who want to limit the power of teachers’ unions, which they see as impediments to reform—not to mention political opponents. Led by conservative governors, for instance, Wisconsin and Ohio are among states that have abolished or curtailed teachers’ rights to collectively bargain this year, in the name of balancing budgets.

On the other side are unions such as the AFT and their supporters, who argue that the teaching profession is under attack from those who don’t understand the challenges educators face every day. Only by giving teachers more support, they say, can real school reform occur.

In between are people like Education Secretary Arne Duncan and former First Lady Laura Bush, who agree that teachers should be paid more—but only if they accept certain changes in return, such as linking teacher evaluations to student test scores. Duncan repeatedly has said that teachers are “desperately underpaid” and that their salaries should be doubled in order to attract and retain high-quality teachers.

Richwine’s and Biggs’ paper aims to refute that idea.

“State and local govern­ments seeking to balance their budgets in difficult times should take a close look at teacher compensation, which is considerably higher than necessary to retain the exist­ing teacher workforce,” they concluded. “More fundamental reform of teacher compensation would scrap the existing rewards for education and experience—and instead pay market rates to teachers who are measurably effective.”

Weingarten counters that their argument flies in the face of “the lessons of top-performing nations, which invest heavily in recruiting, developing, supporting, and compensating teachers.”

What do you think of the Heritage Foundation paper? Share your thoughts in the comments section below.

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