Author Topic: Are teachers underpaid? Let's find out BY DAVID HARSANYI  (Read 342 times)

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Are teachers underpaid? Let's find out BY DAVID HARSANYI
« on: July 26, 2014, 09:03:11 PM »
http://washingtonexaminer.com/are-teachers-underpaid-lets-find-out/article/2551288

Are teachers underpaid? Let's find out
BY DAVID HARSANYI | JULY 25, 2014 | 11:43 AM

A teacher in South Dakota with a bachelor's degree and 10 years of experience earns $33,600 per year, which is less than the average auto repair worker. This grievance against salary injustice is nothing new, of course, but this particular example comes to us from a new national study by the Center for American Progress, which details the chicken feed teachers are forced to subsist on as they altruistically keep your hopeless children literate.

Teachers are underpaid. In politics and also in everyday life, this is almost universally accepted. Everyone admires teachers. Everyone wants good teachers for their children. And naturally, liberals believe that contrasting these salaries will emphasize the irrationality and unfairness of the marketplace.


But it doesn't. And the first and most obvious reason it doesn't is that teachers actually do quite well for themselves when you consider the economic realities of their profession.

A 2012 study conducted by the Heritage Foundation found that workers who switched from private employment to teaching most often took an hourly pay increase, whereas most of those who left teaching for the private sector took pay decreases. More specifically, a few years back, using Bureau of Labor Statistics and National Compensation Survey numbers, the Manhattan Institute looked at the hourly pay of public-school teachers in the top 66 metropolitan areas in the country. It found that teachers pulled in about $34.06 per hour. Journalists, who have the vital job of protecting American democracy, earned 24 percent less. Architects, 11 percent less. Psychologists, 9 percent less. Chemists, 5 percent less.

It's also worth asking what an average auto mechanic might be willing to give up for the security of tenure. What would a guaranteed pension and a lifetime of health care be worth to a plumber? Considering how hard unions fight to keep these things, I imagine they're worth quite a bit.

Then there is the matter of demand -- or lack of it. According to Andrew Coulson at the Cato Institute, since 1970 the public-school workforce has roughly doubled, from 3.3 million to 6.4 million (predominately teachers), while over the same period, the enrollment of children rose by only 8.5 percent -- or a rate that was 11 times slower. Recently, the National Council on Teacher Quality found that schools are training twice as many elementary-school teachers as they need every year.

With this kind of surplus, the question we really should be asking is: How are teachers' salaries so high?

The second and less obvious problem with the mechanic-teacher comparison is the snobbish suggestion -- thrown around by teachers unions and their allies all the time — that working with your hands is less meaningful or valuable to society than working with kids.

Now auto technicians make an average of $35,790 nationally, with 10 percent of them earning more than $59,590, according to BLS data. According to a number of experts from large car companies, there will be a serious shortage of mechanics in the near future, as demand is expected to grow 17 percent from 2010 to 2020. That's 848,200 jobs, according to USA Today. And judging from the information, mechanics are asked to learn increasingly high-tech skills to be effective at their jobs. It wouldn't be surprising if their salaries soon outpaced those of teachers.

"The bottom line," says the Center for American Progress, "is that mid- and late-career teachers are not earning what they deserve, nor are they able to gain the salaries that support a middle-class existence."

Alas, neither liberal think tanks nor explainer sites have the capacity to determine the worth of human capital. And contrasting the pay of a person who has a predetermined government salary with the pay earned by someone in a competitive marketplace tells us little. Public-school teachers' compensation is determined by contracts negotiated long before many of them even decided to teach. These contracts hurt the earning potential of good teachers and undermine the education system. And it has nothing to do with what anyone "deserves."

So if teachers believe they aren't making what they're worth -- and they may well be right about that -- let's free them from union constraints and let them find out what the job market has to offer. Until then, we can't really know. Because a bachelor's degree isn't a dispensation from the vagaries of economic reality. And teaching isn't the first step toward sainthood. Regardless of what you've heard.

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Offline Chieftain

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Re: Are teachers underpaid? Let's find out BY DAVID HARSANYI
« Reply #1 on: July 26, 2014, 09:32:50 PM »
False choice.  The reason teachers are underpaid is because of the proliferation of highly compensated, non-teaching "Administrators" in the schools, as well as an enormous staff that's required in large part to keep up with all of the required documentation for local, state and federal reporting, and administration of and accounting for incredible amounts of public money.


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Re: Are teachers underpaid? Let's find out BY DAVID HARSANYI
« Reply #2 on: July 26, 2014, 10:39:43 PM »
Gov't employed teachers are also almost impossible to fire in many states. The best you can do with incompetent ones is switch them to a different school or into an administrative job. And all the while they're earning great pensions and lifetime health care that is a serious drain on city and state funds.

But there are a lot of other gov't jobs that do the same thing. Teachers in private schools are much more likely to be good at their jobs (and worth more). Mechanics who work on gov't jobs are just as likely to be in it for the pensions and health care.

Gov't doesn't seem to get the best employees, but they sure get ones who want to stay employed in the same job.  :smokin:

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Re: Are teachers underpaid? Let's find out BY DAVID HARSANYI
« Reply #3 on: July 26, 2014, 10:52:14 PM »
The comparison between a teacher and an auto mechanic is false on at least two bases:  First, teachers don't work 12 months out of the year, auto mechanics do (unless they get laid off).  Teachers generally work about 9 months, or 75%, of the year.  If the salary of $33,600 is annualized, it's the equivalent of an annual salary of $44,800.

Second, teachers get platinum-plated health and retirement benefits that no auto mechanic gets.  For 2014, the average monthly premium for a platinum Obamacare policy in South Dakota for a single non-smoker aged 30 was $333, or $3,996 a year.  Public sector unions generally have platinum level plans and the premiums are paid wholly by the government involved, therefore it's reasonable to assume that the average teacher in SD gets the equivalent of an Obamacare platinum plan.  Further, even though teachers only work 9 months out of 12, their insurance premiums are paid for all 12 months, therefore the monthly average must be multiplied by 12 to determine the additional monetary benefit SD teachers receive just for health insurance.  I got my values for the SD Obamacare policies here:  http://dlr.sd.gov/insurance/consumers/consumer_documents/sd_exchange_rates_individual.pdf

Adding in just the insurance premiums of $3,996 brings the average SD teacher's total compensation up to $48,796 on an annualized basis.

With respect to pension contributions, according to this webpage, 12% of a SD teacher's salary is contributed to the pension fund, 6% from the teacher and 6% from the employer.  That means that, in addition to everything else, a SD teacher earning the average of $33,600 gets another $2,016 in financial benefit from the taxpayers.

Adding in the annual employer (i.e., taxpayer) contribution of $2,016 brings the average SD teacher's total compensation up to $50,812 on an annualized basis.

The median income in 2014 for a single individual in SD is approximately $39,000 based on the bankruptcy rules as a source for the 2014 median income for a single individual in SD (the median income for each state is used to determine whether an individual can file a chapter 7 bankruptcy, so the figures are reasonably accurate; the source I used is here:  http://www.totalbankruptcy.com/chapter-7/requirements/median-income-tables.aspx).


So, now that we're a little closer to comparing apples to apples, and not to oranges grown on Mars, let's see what we get.

Median 2014 annual income for an individual in SD:  $39,000

Annualized 2014 annual income - including all financial benefits - for the average teacher in SD:  $51,000 (rounded to the nearest thousands).

Conclusion?  Not only are teachers in South Dakota not underpaid, they are in fact quite highly paid, with total annualized compensation of 131% of the median income in 2014 for an individual in SD.

Based on the salary data from salary.com for an auto mechanic in Rapid City, SD, the median annual pay for an auto mechanic in Rapid City, SD is about $32,000 (rounded to the nearest thousands).  That is (a) substantially less than what the average teacher in SD gets paid, on an annualized basis, and (b) still less than the actual cash compensation the average teacher in SD receives (which also means the article's data is in error - the average teacher in SD does not get less than the average auto mechanic).

Note that I am not adding in any additional financial benefits like health insurance or retirement for auto mechanics because most auto mechanics don't get anything of that nature.  However, to be sporting, let's assume that the median auto mechanic in SD gets 100% of his/her health insurance premium paid for by his/her employer (SD has a coverage rate of 89%, mostly through employers, so this assumption is not entirely unreasonable, although it is extremely conservative).  From the figures above, we know that the average annual insurance premium for a 30 y.o. non-smoker individual is $3,996, or $4,000 when rounded to the nearest thousands.

Adding that conservatively assumed insurance premium benefit brings the 2014 median annual income for an auto mechanic in Rapid City, SD to approximately $36,000.

So, even if we make the very conservative assumption that the average auto mechanic in SD gets his/her health insurance completely paid for by his/her employer, the average auto mechanic in SD still gets only about 71% of the annualized total compensation that the average teacher in SD receives.


Bottom line conclusion:  the article is patently false.  When all financial benefits are taken into account, and even if we make the conservative assumption that the average auto mechanic in SD gets his/her health insurance paid for by the employer, the average teacher in SD is paid substantially more than the average auto mechanic on an annualized basis.


Just goes to show, there are lies, there are damned lies, and then there are statistics, which are useful only when the sources and bases for those statistics are stated, otherwise, statistics are worse than damned lies.



Further data on SD teachers' compensation can be found at this webpage: http://www.teaching-certification.com/salaries-benefits/south-dakota-teaching-salaries-and-benefits.html
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Offline speekinout

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Re: Are teachers underpaid? Let's find out BY DAVID HARSANYI
« Reply #4 on: July 26, 2014, 11:30:07 PM »
Good analysis, Oceander. I think the job security for the teachers is also worth a lot. The mechanic can get fired or laid off if he slacks off or if business is bad; the teacher is guaranteed a job for life. There's no way to quantify that, I don't think, but it sure makes a difference to the employee.

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Re: Are teachers underpaid? Let's find out BY DAVID HARSANYI
« Reply #5 on: July 27, 2014, 07:19:56 AM »
Quote
Bottom line conclusion:  the article is patently false.
Now, come on. You just took one segment of the article—one that doesn't even really fit in with the rest of the article—and disproved that tiny segment. In doing so, you actually proved the whole point of the article, that public school teachers are in fact very well compensated. Too well, perhaps.

Might I add some further context: it's interesting that the CAP chooses South Dakota as their reference point. South Dakota is (1) predominantly rural, (2) dirt-poor, and (3) home to a large number of Indian reservations that contribute to points (1) and (2). I also note that the education system is funded through taxes; thus, poor areas have less to extort than wealthy areas.

I'll give a counterexample of Western New York. New York has the highest per-teacher salary in the nation. Yet Western New York, especially south of the Buffalo suburbs, has many of the same issues. Rural and poor, yet because of New York's extremely public-employee-friendly laws, a teacher can earn $40,000 a year in salary alone to start, plus 5% raises in a typical year, plus step and longevity bonuses above and beyond that. Of course property taxes are through the roof and values are through the floor; we have a homestead exemption, but it only covers $30,000 and all it really does is push that burden onto the state government. It's not uncommon to see the local schools 80% dependent (or worse) on state aid, even with some of the highest property tax rates in the country. (Of course, New York also requires a master's degree to teach permanently, so the common New Yorker isn't eligible for a teaching job. They have to keep the riff-raff out, you know.)
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Re: Are teachers underpaid? Let's find out BY DAVID HARSANYI
« Reply #6 on: July 27, 2014, 09:01:30 PM »
Now, come on. You just took one segment of the article—one that doesn't even really fit in with the rest of the article—and disproved that tiny segment. In doing so, you actually proved the whole point of the article, that public school teachers are in fact very well compensated. Too well, perhaps.

Might I add some further context: it's interesting that the CAP chooses South Dakota as their reference point. South Dakota is (1) predominantly rural, (2) dirt-poor, and (3) home to a large number of Indian reservations that contribute to points (1) and (2). I also note that the education system is funded through taxes; thus, poor areas have less to extort than wealthy areas.

I'll give a counterexample of Western New York. New York has the highest per-teacher salary in the nation. Yet Western New York, especially south of the Buffalo suburbs, has many of the same issues. Rural and poor, yet because of New York's extremely public-employee-friendly laws, a teacher can earn $40,000 a year in salary alone to start, plus 5% raises in a typical year, plus step and longevity bonuses above and beyond that. Of course property taxes are through the roof and values are through the floor; we have a homestead exemption, but it only covers $30,000 and all it really does is push that burden onto the state government. It's not uncommon to see the local schools 80% dependent (or worse) on state aid, even with some of the highest property tax rates in the country. (Of course, New York also requires a master's degree to teach permanently, so the common New Yorker isn't eligible for a teaching job. They have to keep the riff-raff out, you know.)

So teachers are paid significantly more than auto mechanics in NY, too.  Just adds insult to injury.

I'm also, at least indirectly, attacking the malicious tactic of comparing apples to oranges by only comparing cash compensation between two groups of workers where one group also receives substantial non-cash benefits, like health care and retirement benefits.
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