By balancing the ratio of salaries to retirement benefits and reforming pension structures, we can vastly improve the quality and cost of teacher compensation.
Among Democratic presidential hopefuls, it’s become an article of faith that all teachers in America deserve a raise. Bernie Sanders says the starting salary for teachers should be at least $60,000. Kamala Harris wants to give teachers an average raise of $13,500 — at a cost of $315 billion over ten years, according to her campaign.
Sanders, Harris, and other politicians are astutely responding to demands leveled by educators who participated in the national wave of teacher strikes that started around this time last year. But is teacher pay too low, or are the taxpayer dollars that fund salaries simply being misallocated? The question is worth investigating before we commit to breaking the bank.
It’s true that public-school teachers are paid less than private-sector professionals with similar amounts of training. But the difference in total compensation is smaller when teachers’ generous retirement packages are taken into account. Too much of a teacher’s total compensation goes to retirement relative to salary, and that compensation structure is due for an upgrade. Studies suggest that teachers would rather bring home larger chunks of their pay. Cornell University economist Maria Fitzpatrick estimates that public-school teachers value $1 of additional retirement benefits at only 20 cents. A recent study by University of Missouri economists Cory Koedel and P. Brett Xiang found that a pension enhancement designed to increase retention, at a taxpayer cost of about $183 million, essentially failed to deliver.
Marcus Winters is a senior fellow at the Manhattan Institute, an associate professor at Boston University, and author of the new report, Quality Control? How School Performance Varies Within American Cities. Follow him on Twitter here.
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