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Royalty free school clip art of a blue teacher person standing in front of a blank chalkboard and using a pointer stick while teaching a single student in a classroom. This piece originally appeared on EducationNext.org and has been modified to include only the portion written by Mishel and co-author Joydeep Roy.
Over the past few years, as cash-strapped states and school districts have faced tough budget decisions, spending on teacher compensation has come under the microscope.
Richwine and Biggs (hereafter R & B) provide an implausible and incorrect assessment that public school teachers are vastly overpaid. R & B argue that teachers have lower cognitive abilities than other college graduates and therefore traditional comparisons using education controls do not adequately control for ability. This preferred estimate compares teachers to other workers with similar test scores, even though the comparison group has substantially less education (nearly all teachers have a bachelor’s degree, and about half also have a master’s, while about one-third of the general workforce has a bachelor’s or further education).
To adjust for differing lengths of work years, R & B boost teacher wages by 29 percent to reflect a teacher work year of 185 days. R & B argue that teachers are overpaid because former teachers earn less when they quit teaching to take a nonteaching job.
Note first that the Survey of Income and Program Participation data R & B use yield very small sample sizes for looking at these job transitions, roughly 150 teachers leaving teaching for nonteaching jobs. SASS-TFS data (see Table 3) show that teachers who quit teaching to work outside of education, particularly those going to the private sector of the economy, were generally among the lowest-paid teachers. The data do confirm that those teachers (who are not average in any way) suffer a decline in earnings when they move out of teaching, particularly when they work outside of the education sector. R & B also argue that public school teachers are overpaid because their wages are significantly higher than those of private school teachers.
It is also instructive to note that teachers working in private schools quit teaching at a much higher rate than their counterparts in public schools, and almost two-thirds of these leavers rank an increase in salary to be very or extremely important in any possible decision to return to teaching. Roughly 9 percentage points, or about one-fifth, of the 52 percent compensation advantage R & B claim is due to their estimated value of greater teacher job security.
Much of the R & B claim of a large compensation advantage for teachers is due to their evaluation of pensions. R & B also add the cost of retiree health care but exaggerate the cost differences between teachers and other workers, as noted by Morrissey and in a 2012 analysis by Rutgers University professor Jeffrey Keefe. Teacher wages have certainly declined relative to comparable private-sector workers over several decades.
Richwine & Biggs’s claim of a large compensation advantage enjoyed by teachers is both implausible and incorrect. EPI is an independent, nonprofit think tank that researches the impact of economic trends and policies on working people in the United States. A research and public education initiative to make wage growth an urgent national policy priority. Interactive tools and videos bringing clarity to the national dialogue on economic inequality. A national campaign promoting policies to break the link between socioeconomic status and academic achievement. A network of state and local organizations improving workers' lives through research and advocacy. The underlying question is whether, when you take everything into account, today’s teachers are fairly paid, underpaid, or overpaid. This conclusion is primarily generated by two flawed estimates: one is their correction for “summers off” and the other their substitution of the AFQT test score for education in a standard wage regression. This procedure is highly unusual, and R & B provide no empirical test to show that education controls are not good predictors of wages. The Teacher Follow-up Survey of the Schools and Staffing Survey (SASS-TFS) provides data designed to examine teacher turnover, and it has a much larger sample, 706 former teachers currently working in nonteaching jobs.
Further, they represented just 1 percent of the teaching force, hardly a representative sample of the overall body of teachers. Instead of showing that teachers are overpaid, however, these data suggest that teacher salaries are inadequate, at least for this group of teachers. Richwine and Biggs are essentially attributing the wages paid to private school teachers as the market wage.


It is curious that R & B elect to monetize one aspect of teacher work but ignore all others.
We commend the 2011 analysis by Allegretto, Corcoran, and Mishel, which found a teacher wage penalty of 12 percent in 2010, up 10.5 percentage points from 1979 (most of the increase occurring between 1996 and 2001). In other words, their findings suggest schools can cut compensation by as much as a third without harm, though in their current essay they only talk about how “moderate” pay reductions would not push the average teacher below his or her market-compensation level. And their decision not to account for differences in education as well as test scores relies on one paper in the literature, contradicting the overwhelming practice of labor market economists. Using the expected rate of return on assets rather than the risk-free rate provides an unbiased projection according to accepted accounting standards (and to R & B) of actual employer outlays. EPI’s research helps policymakers, opinion leaders, advocates, journalists, and the public understand the bread-and-butter issues affecting ordinary Americans.
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Their claim is implausible because they are simultaneously arguing that teaching is extremely well paid but has a low-cognition workforce. Their wage results are entirely dependent on omitting education and using the AFQT test score as the sole “skill” variable.
Yet work years for teachers go from mid-August to mid-June, leaving roughly two months off. First, the authors assume that those who quit teaching to take up a nonteaching job have similar characteristics to the average teacher such that the experience of these “leavers” is representative of all teachers. As critics of current teacher recruitment and retention policies argue, teachers are not generally fired, so why do these teachers voluntarily take up low-paying jobs in other sectors? The turnover from private schools to other sectors belies this point: private school salaries appear too low to maintain the workforce. March CPS data show an erosion of teachers’ relative wages from 1979 to 2005 of 11 percent overall: 16 percent among women and 8 percent among men.
Taking benefits into account, they find a 9 percent compensation penalty for public school teachers in 2010. There is scant evidence even behind this claim, and policymakers should be cautious in taking their results seriously. Using a risk-free rate artificially inflates the value of the compensation of public employees. Andrew Biggs of American Enterprise Institute and Jason Richwine of the Heritage Foundation argue that, considering skills, workload, and benefits, today’s teachers are, on average, overpaid.
One wonders why, if this is the case, that the most elite college graduates have not flooded schools as they have the financial sector and how teaching remains the only female-dominated high-paying occupation. Only when they omit any education controls do they find that teachers earn the same wages as other workers; this they adopt as their preferred estimate and conclude that teachers have the same annual wages as comparable workers. The fact that a widely cited previous study did so does not inspire unconditional acceptance, as that study did not obtain different results when it used AFQT scores alone. That disparity is because the 185–day work year does not include spring or winter breaks or any holidays.
The second assumption is that the salaries of these leavers in their current nonteaching jobs reflect their “true” worth as teachers, even though their current jobs may not have much in common with teaching. Most probably, teaching did not compensate these people enough given the working conditions involved.
Presumably, most people considering a career in teaching are open to taking up a job in either sector. A more balanced assessment would consider other dimensions of teacher working conditions: the hierarchical nature of the job, the inflexible work hours, the relative inflexibility of vacation planning, the frequently unsafe working conditions, the lack of private office space, and the stress of being “on stage” nearly all day in front of students. This is because they triple the pension benefit for teachers compared to the BLS measure, estimating it to be 32 percent of wages rather than 11 percent. Other studies by Peter Temin, by Eric Hanushek and Steven Rivkin, and by Paul Peterson have shown similar trends. Nor do they respond to evidence that teachers moving to nonteaching jobs are not in any way average. It only serves to obtain an inflated number to attract attention and is no guide to policy.


Lawrence Mishel of the Economic Policy Institute and Joydeep Roy of Columbia University and New York City’s Independent Budget Office argue that Richwine and Biggs are off the mark, and that teachers deserve a raise.  Read on, and decide for yourself. They use these results to dismiss their own initial estimate of a 19 percent annual wage disadvantage for teachers, equivalent to claiming that the wages teachers earn for the school year correspond to what comparable workers earn in a full year’s work. The implied comparison is to other workers who are working 52 weeks, and the data being used for the wage comparison, the March Current Population Survey (CPS), include weeks of paid vacation as part of the work year. In other research using data from the CPS, we find that the most popular destination occupations for former teachers outside of education are lower-paid positions such as librarians, cashiers, secretaries, and clergy.
The data show that the background and educational qualifications of teachers working in private schools are quite similar to those of teachers working in public schools. Fully 40 percent of R & B’s 52 percent teacher-compensation advantage estimate is thus based on their pension calculation. Richwine and Biggs make an argument that some estimates of the current levels of teacher pay advantage are biased because of failures to control for cognitive ability and so on. The notion of extremely well-paid teachers is hard to square with reality, especially the failure of men to take over the teaching field.
In addition, noncognitive skills like interpersonal skills are probably at least equally relevant in a classroom setting, and such skills are unlikely to be captured in standardized tests. It is common sense to interpret a teacher’s annual salary as being applied to the time between when the school year starts and ends.
With K–12 teaching being an integrated market, reducing public school pay would affect the ability of schools more generally to attract teachers, including private schools. These critiques of the levels of teacher relative pay, however, do not address the substantial erosion of teacher relative pay in recent decades. With roughly 125 students in each entering class, the school strikes an “excellent” balance with “its affordability, reputation, small class size, and excellent faculty.
If teachers currently enjoy a compensation and wage advantage, then the advantage was substantially greater in 1980 or 1960.
If so, then it is curious that teaching is not an employment magnet comparable to the financial sector. Because our class consists of only 128 people, all of my professors know my name.”University of Cincinnati runs several “amazing” legal institutes and research centers focused on unique topics such as domestic violence, law and psychiatry, and corporate law. Also, R & B need not include paid leave in their calculations because paid leave is captured in March CPS annual wages. How do you explain why the brightest students from the most elite schools are not adopting teaching as their permanent career?
Through these centers, students can earn credit hours while doing fulfilling and useful work in the community.
How can R & B argue simultaneously that teaching has low-cognition workers but exceptional pay?
Many students make particular note of the Ohio Innocence Project, an institute at the University of Cincinnati through which students conduct substantive work to impact legislative reform, and work on real criminal cases.
Moreover, if teaching has been and remains so attractive, then why is it the only predominantly female high-paying occupation?
Students also have the opportunity to research and write for the school’s renowned publications, including the Human Rights Quarterly, Law Review, and Freedom Center Journal. While students at other schools might scramble for spots on the school’s law review or clinic programs, “Since the school is small, each student can participate in and get involved in a number of organizations.”Thanks to an “ambitious but not overly competitive student body,” the learning environment is charged, but not cutthroat, at University of Cincinnati. A 3L attests, “While academic achievement is always a numbers game in law school, the atmosphere at UC is nonpretentious and noncontentious.” When it comes to the job and internship placements, University of Cincinnati maintains a “deep and well-regarded history as a legal educational institution” both locally and nationally. However, students are optimistic that the school will consider remodeling the law school along with other campus projects.



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