Chuck,
I'll let Jack speak for himself on your issues/concerns. He's in the middle
of writing a book on the subject, so what follows is excepts from his research
addressing your remarks.
Pax,
Dale
Dear Dale:
I have the
following quick comments on the remarks of Chuck Pezeshki. Most of his comments
actually support my views, only I don't think he realizes it. I apologize in
advance for some of the long pastes below. but since I am writing a book
reviewing the literature on public education, I have lots of ammo already
prepared and I can see no sense in repeating my self.
1. Chuck's major
point seems to be that teachers salaries are too low. Well, the only market test
of teachers salaries is whether or not schools are able to hire faculty in
sufficient numbers and quality. Except for math and science, the teachers market
is in excess supply, indicating that salaries are undoubtedly generally too
high. For openers, I am pasting here the evidence I have gathered on this
subject.
------------------------------------------------
Summary of Evidence on Above-Market Wages of Public School
Teachers
Surplus of
Teachers. A larger reason for the NEA's drive to keep teacher salary
determination out of the market place is the perennial general over-production
and availability of teachers relative to those needed in the public schools. For
example, in 1996 there were about 2.2 million teachers employed in the US. Yet,
census data shows that there were about 6 million people in the US with bachelor
degrees in education. (Feistritzer. 1998) For all the talk and spin about
teacher "shortages", the fact of the matter is that teachers markets generally
are in excess supply. Only about half of newly certified education college
graduates each year end up actually being employed as teachers, with the rest
going elsewhere in the private sector, where they remain as a heavy supply
overhang on the teachers' market. (Ballou and Podgursky. 1997, pp. 56-57) In
Idaho, the State Board of Education (2001) recently issued a report that showed
a large and growing surplus of teachers in Idaho. Predictably, as I indicated
above, the numbers were fraudulently represented as showing a shortage.
(Wenders. 2002)
Teacher Attrition. The above-market level of teachers' pay is
also confirmed by teachers' low turnover and attrition rates. In any state, 92
to 96% of the teachers are retained each year. (Barro. 1992, p. 148) In Idaho,
the retention rate is at least 92.4%, and the net resignation rate is at most
5.4% annually. (Wenders. 2002, p. 3) Due to teachers moving from one state to
another national attrition rates are even lower. The U-shaped relationship
between the attrition rate and age means that generally teachers only leave
their jobs early or late in their careers. Once past the first few years, they
generally stay and ride the salary grids upward until retirement. (Barro. 1992,
pp. 148-57) All this means that teachers rarely leave for better paying jobs in
the outside market economy because they are very well paid for teaching. And, as
I shall point out below in more detail, since benefits for teachers are
generally much higher than in the private sector, this often means teachers find
it attractive to retire early, often to become double dippers by becoming
teachers in other jurisdictions. Compared to the private sector, teachers are
very well paid and, except for the most talented, leave teaching at a very low
rate.
Comparable Compensation. Private sector benefits are usually
substantially less than for public employees. Table 691 of the Statistical
Abstract of the United states, (http://www.census.gov/prod/www/
statistical-abstract-us. html), reports the ratio of total compensation to
salary as 1.158 for the private sector, and 1.3133 for the government sector,
for 1998. The Pennsylvania study found that teachers' benefits as a percentage
of total salary to be 36.1%, and in the private sector they were 23%. (Wynne and
Watters 1991, Table 2) (As I note below, this article also has an excellent
discussion of the issues and problems of comparing teachers salaries and
compensation with that of comparable employees in the private sector.) Public
school teachers' benefits are much higher than in private schools. (McLaughlin
and Broughman. 1997, Table 3.13)
By how much is public school teachers' compensation above market? Since
market determined pay for public school teachers has not been tried for a long
time, we cannot observe what has not happened. In their study comparing
compensation between teachers and other comparable employees in Pennsylvania,
Wynne and Watters (1991) found comparable employees to earn between 68% and 74%
of public school teachers' compensation. Private schools pay average salaries of
about 66% of those in the public schools, and private starting salaries are
about 74% of those in public schools. (Ballou and Podgursky. 1997, Table 6.1, p.
131) Taking into account experience and education, private schools pay salaries
about 60 percent of those in local public schools. (U. S. Department of
Education. 1998) An NCES working paper found raw private school teacher salaries
to be 64% of public school teachers'. (McLaughlin and Broughman. 1997, Table
3.12) As noted below, since benefits are higher in the public sector generally,
and higher for public than in private schools, these differentials under-state
the difference in total compensation between public and private
schools.
Of course, there
are differences in teachers and teaching between public and private schools so
their teachers' pay is not strictly comparable. Since a large fraction of the
private schools have a religious affiliation, and practice selective admissions,
private school teachers may be willing to work for less because of the
attraction of this religious affiliation and different students. The same holds
because of the greater independence given to private school teachers. On the
other hand, private schools tend to hire teachers from more selective colleges
and fewer from colleges rated below average. Private schools have
proportionately more secondary teachers who have an academic major but about the
same who major in math and science. Because of this, combined with greater pay
flexibility, private schools hire and keep teachers of higher quality. And
private schools may have to pay more because few grant tenure, whereas tenure is
virtually universal in public schools after two to three years. These elements
of non-comparability go both ways as they affect public and private teacher pay
comparisons. (Ballou and Soler. 1998; Ballou and Podgursky.
1997)
The big
difference between private and public schools is that the former must compete
for students in a marketplace where public education is free. In private
schools, there is intense pressure to keep costs down and teachers' unions are
rare. In this environment, private schools take advantage of the general teacher
surplus by paying only what is necessary to recruit the kind of teachers needed
to satisfy their customers--parents. They face the same potential pool of
teachers and manage to hire superior teachers at far less
cost.
Because of
the general surplus of teachers and their low rates of attrition, there is no
question that public school teachers' pay is well above market. By how much is
subject to some uncertainty, but on average it is probably 25-40 percent, all
other things equal, with the best estimate probably closer to the latter
percent. This result is consistent with the economics literature on the salary
premiums (rents) earned by educators. (Coase. 1974; Lott. 1987; West. 1967) It
also is consistent with the comparative per pupil costs in public an private
education.
------------------------------
References
Ballou, Dale, and Michael Podgursky. 1997.
Teacher Pay and Teacher Quality. Kalamazoo, MI: W.E. Upjohn Institute for
Employment Research.
Ballou, Dale, and Stephanie Soler. 1998. "Addressing
the Looming Teacher Crunch" Washington, DC. Progressive Policy Institute.
(http://www.ppionline.
org/ppi_ci.cfm?contentid=1652&knlgAreaID=110&subsecid=135)
Barro,
Stephen M. 1992. "Models for Projecting Teacher Supply, Demand, and Quality: An
Assessment of the State of the Art." In Teacher Supply, Demand, and Quality,
Erling E. Boe and Dorothy M. Gifford, eds. Washington, DC: National Academy
Press.
Coase, Ronald. 1974. "The Market for Goods and the Market for
Ideas" American Economic Review. 64 (May): 384-91.
Feistritzer, C. Emily. 1998. "The Truth About the
'Teacher Shortage'". The Wall Street Journal, January
28.
Idaho State Board of Education. 2001. Idaho's MOST Forecast
Report: Idaho Teacher Supply and Demand 2000-2010. Boise, ID: Idaho State
Board of Education. October 19, 2001. http://www.sde.state.id.us/MOST/
ForecastStudyUpdate.htm
Lott, John R., Jr. 1987. "Why is Education
Publically Provided?" The Cato Journal. 7 (Fall): 475-502.
McLaughlin,
Donald H., and Stephen Broughman. 1997. Private Schools in the United States: A
Statistical Profile. National Center for Education Statistics (NCES). Working
Paper NCES 97-459.
United States Department of Education, National Center
for Education Statistics. 1998. Private School Universe Survey, 1997-98.
Washington, D.C.: National Center for Education Statistics.
Wenders, John
T. 2002a. "Analysis of Idaho's MOST Forecast Report: Idaho Teacher Supply and
Demand 2000-2010" The Idaho Alliance for Traditional Values. February 8, 2002.
(http://www.uidaho.edu/~jwenders/Essays
%20In%20Persuasion/New/Teacher_Supply_and_Demand.pdf)
Wynne, David J.,
and Charles W. Watters. 1991. "Teacher Compensation: How it Compares with the
Private Sector" Government Union Review 12, No. 3 (Summer):
31-43.
-----------------------------------
JTWenders
8/1/02
-----------------------------------------------------------------
2. There is no
question that pay for math and science teachers is too low, but it is a non
sequitur to argue that this is a reason for raising all salaries. To
put it in context, having to pay higher wages to attract engineering professors
is no reason to also pay phys ed. professors more. The sub-markets for teachers
in different subjects are quite different, as they are at the college
level. In my view, any engineering graduate is subject matter qualified to teach
math, and probably most science, in high school. Yet, the artificial
certification and licensing requirements, and salaries that fail to recognize
that math and science teachers have higher paying opportunities outside of
teaching, keep engineering grads, like Chuck's wife, out of the
profession. My major point is that the salary grid, by failing to reward
superior performance and subject field, keeps better teachers out of the
profession and creates the shortages of math and science teachers that we
observe. Much of what Chuck says supports my point. Think of it in the following
way: what would happen in Universities if all professors were forced on a salary
grid that failed to reward performance and differentiate between, say,
engineering and education professors? That is exactly what has happened in the
public schools.
3. There is
evidence that by failing failing to reward performance, the salary grid causes
the better teachers to leave.
4. There is no
evidence that education courses produce better teachers. Lots of time and
zillions of dollars of resources are wasted on the artificial licensing and
certification requirements. Note all the silly hoops Chuck's wife is having to
go thru to get into teaching. She's the kind of person that the salary grid and
the artificial licensing and certification requirements keep out of the field.
Given the general low quality of students in the Colleges of Education, I am not
surprised that she is the best in her class. But this is the very kind of person
that the salary grid keeps out of the profession.
5. I am not
obsessed with the fact that teachers have summers off. This is simply one
attractive features of teaching, and one which makes the rewards of the
profession incomparable with the monetary rewards of other professions. I, for
one, for 40 years willingly accepted lower pay in return for other features of
the teaching profession, summers off being one of these features that was
important to me. For others, the higher pay associated with a 12 mo. job is more
important. Life is choice.
6. It is worth
emphasizing that teachers' compensation is greatly underestimated by reporting
only teachers' pay. Benefits in the public sector, and for teachers
specifically, are usually about twice what they are in the private sector. In
Idaho, teacher benefits are a little under 30% of salary, so when the NEA
reports the average teacher salary to be about $36k, compensation is really
about $48k, which is why the NEA never mentions the value of benefits.
I can back up any
of the above statements with facts, and would be quite willing to do so if
anyone is interested. You can communicate my remarks to anyone you choose.
For what its
worth, I am pasting below a summary of the evidence on the waste in public
education in the US.
Regards,
Jack
---------------------------------------------------
How much waste is in the US public school
system?
The obvious
way to estimate public school rents is to compare its costs of operation with
those in the private school sector, which, because they are faced with clear
parental school choice, have much greater incentives to operate efficiently.
This effort is hampered somewhat by the fact that there is no systematic
collection of private school costs. Further, private schools seem to be more
eclectic, ranging from religious schools to elite boarding schools. The fact
that most of the private schools have some kind of religious affiliation raises
the issue of how to deal with some employees there who are paid less than market
wages. Never the less, the statistics that exist, taken together with various
reasonable ways of adjusting the data for private school peculiarities, can give
us an estimate of the efficiency advantages of private
education.
1.
Salaries and benefits are the largest operating costs of any school in lower
education. Using data from the 1987-88 NCES Schools and Staffing survey, Ballou
and Podgursky (1997. Table 6.1) found the average public and private school
teacher salaries to be $26,458 and $17,434 respectively. This shows that private
salaries are on the average 65.9% of those in public schools. In these data, an
attempt was made to adjust for teachers who were members of religious orders by
excluding all Catholic teachers who were never married. In 1993-94 private
school salaries were 64% of public school teachers'. (McLaughlin and Broughman.
1997, Table 3.12) Both these data sets ignore benefits, which, as I shall
discuss in some detail in Chapter 5 below, are much higher in the public school
sector. The data show the benefits are about 31.3% of salary in the public
sector as a whole and 15.8% in the private sector. Benefits averaged 29.2% of
salary for public school teachers from 1994-99. There is also evidence that
private school teachers are of higher quality. On the whole, private school
teachers' salaries are probably in the range of 60% to 75% of those in public
schools, all other things being equal, with the best estimate probably closer to
the lower figure. Clearly, a large portion of the rents in public school
education have been captured by the public school teachers.
2.
Lott (1987, p. 476), using data from NCES, estimated private expenditures per
pupil in private Catholic schools to be 54.7% of those in public schools in
1976-77, and 51.6% in 1977-78. Again an adjustment was made for lower paid
religious teachers by doubling their pay for computational
purposes.
3. I have been able to uncover
only one other study that tried to estimate per pupil expenditures for US
private schools. (Garet, et al. 1995) Using various estimating techniques, this
study found private per pupil costs for all private schools in 1991-92 to range
between $3,375 and $3,550, or about 67.2% and 70.7% of public school current
costs for this year, which were $5023 per pupil (NCES. 2001). (It is also worth
noting that the reported public school costs exclude the costs of state
bureaucrats, which are not insignificant.) When the elite, college preparatory,
schools are excluded, private school costs fall to about $2883 per pupil, or
57.4% of the comparable public school cost.
For Catholic
schools alone, the costs are $2378 per pupil, or 47.3% of public school costs.
The latter estimate is consistent with the results found by Lott for Catholic
schools considering that Lott made a salary adjustment for the low pay for
religious teachers.
For other religious schools (other than Catholic and Lutheran) the per
pupil cost estimate was $3048, and for non-sectarian schools the estimate was
$2967. These latter estimates might be more relevant than those of the Catholic
and Lutheran schools for they probably do not include religious (non-lay)
teachers who accept lower pay. These schools per pupil costs are 60.7% and 59.1%
of comparable public school expenditures, respectively.
All things considered, it would seem reasonable to assume that private
schools operate at about 55 to 60% of the costs of public schools. Or
conversely, about 40 to 45% of public school expenditures are dissipated or
wasted. These are not insignificant monies. For 2000-01, NCES estimated total
current expenditures for public schools to be about $333 billion (NCES. 2001,
Table 161). Assuming an additional 17% for capital outlays and interest, this
brings total estimated US public school expenditures to about $392 billion.
Applying the waste estimates of 40-45%, this shows that US public education
wastes about $157 to $176 billion annually. That is about 1.59 to 1.79% of gross
domestic product. Aside from producing an inferior education, the waste in
public schools represent a very significant drain on the US
economy.
-----------------------------------------------
References
Ballou,
Dale, and Michael Podgursky. 1997. Teacher Pay and Teacher Quality.
Kalamazoo, MI: W.E. Upjohn Institute for Employment Research.
Garet,
Michael, Tsze H. Chan, and Joel D. Sherman. 1995. Estimates of Expenditures
for Private K-12 Schools, National Center for Education Statistics, NCES
Working Paper: #95-17. May
Lott, John R., Jr. 1987. "Why is Education
Publically Provided?" The Cato Journal. 7 (Fall): 475-502.
McLaughlin,
Donald H., and Stephen Broughman. 1997. Private Schools in the United States: A
Statistical Profile. National Center for Education Statistics (NCES). Working
Paper NCES 97-459.
National Center for Education Statistics (NCES).
2001. Digest of Education Statistics, 1996a, 2001. US Department of
Education, Office of Educational Research and Improvement. NCES 96-133. NCES
2002-130. (http://nces.ed.gov/)
United States Department of Education,
National Center for Education Statistics. 1998. Private School Universe
Survey, 1997-98. Washington, D.C.: National Center for Education
Statistics.
--------------------------------
JTWenders
8/1/02