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Researchers Say Cutting Teacher Pay is Not the Solution for Economic Woes

By Ilana Kowarski

Educators across the country tell stories of how lost jobs and lost funding have left them struggling to make ends meet this year.

“I can’t afford to buy anything that isn’t a necessity,” says first-grade teacher Lysa Sassman, one of many California educators whose salary has been slashed. “I grocery shop based on what’s on sale, and I can’t tell you the last time I’ve gone out to dinner or gone on a vacation.”

“Every teacher I know is making sacrifices,” she says. “Some have lost homes and cars.”

But it’s not just teachers who are hurting from budget cuts, furloughs, and layoffs. According to recent research, low educator pay is also causing long-term economic harm.

A National Problem

In the wake of the recession, many politicians have tried to balance budgets by reducing the number of dollars spent in public school classrooms. 

But researchers say this policy is misguided. A few weeks ago, the nonprofit, nonpartisan Economic Policy Institute (EPI) released a report, “Debunking the Myth of the Overcompensated Public Employee,” stating that public employees were underpaid, and that lowering their wages would be unwise.

The EPI and others argue that cutting school budgets and teacher salaries will hurt the economy by giving teachers less spending power and students less earning power. Economists say this policy will leave the next generation of American workers academically ill-prepared and unable to compete in a global economy.

EPI report author Jeffrey H. Keefe predicted that teachers would bear the brunt of recent pressure to decrease government spending.

“They do not deserve bullying or our ridicule. . . [or] condemnation by elected officials and the media looking for scapegoats,” wrote Keefe, a professor of labor and employment relations at Rutgers University.

New Jersey Education Association researcher Bob Willoughby agrees and argues that cutting teacher compensation would be unfair. “When the economy was good, nobody came to us with a golden platter,” he says.  “Now that the economy is bad, politicians want to take away the little we have.”

“If teaching is one of the most important professions, then why are teachers so underpaid?” he asks.

The Teaching Penalty

That’s a good question, says EPI President Lawrence Mishel. His 2008 book, The Teaching Penalty: Teacher Pay Losing Ground, revealed that public school teachers in 2006 earned an average of 15.1% less per week than similarly educated workers and $154 less per week than those in comparable professions, such as journalism and nursing.

“There’s much discussion about the importance of teachers, but given that teachers already suffer a wage penalty, making further cuts is going to move us in the wrong direction,” he says. 

“This misguided solution is going to exacerbate the challenge of recruiting and retaining quality teachers,” he says.

Pay cuts and layoffs have discouraged talented students from becoming teachers, says K.C. Walsh, president of the Oak Grove Educators Association in California.

“You have to look at promising and idealistic young people, and you have to tell them that they might not be able to teach even though that is what they have wanted to do their entire lives,” she says. “You have to say, I don’t know if there is going to be a job for you.”

The jobs outlook isn't as grim as it might have been. After months of lobbying by NEA, Congress passed the education jobs/FMAP bill by a vote of 247-161. New figures from the U.S.Department of Education estimate that some 161,000 educators who had received pink slips will be heading back to school this fall as a result of this win.  

‘Faulty Economics’

Getting the best and brightest teachers is something most Americans want, according to a 2010 Gallup/Phi Delta Kappa poll, in which the majority said that improving teacher quality should be a top national priority.

Why, then, are politicians campaigning to slash education budgets, or even refusing to spend federal money allocated for education?  NEA researcher Michael Petko says the reason lies in “faulty economics.”

“Many people don’t realize that, dollar per dollar, education funds are going to increase state income and produce more jobs than money spent in any other sector in the economy,” he says.

Petko says recent NEA research supports his view.  In 2004, NEA conducted two studies on the economic impact of education spending, “K-12 Education in the U.S. Economy” and “The Effects of State Public K-12 Education Expenditures on Income Distribution.”

These studies revealed a statistically significant correlation between education spending and economic development. Study authors argued that increasing education spending would decrease poverty and promote economic growth, and that decreasing education spending would do the opposite.

For each dollar a state saved per student, 0.4% fewer small businesses would come to the state and bring jobs, the researchers found.

NEA researcher Richard Sims says economic stagnation is just one of the many negative consequences of cutting education budgets. Reducing classroom spending will also make it harder for Americans to compete in the international job market against the Chinese and others who are increasing how much they invest in their children’s education, he says.

Sims observes that the United States now spends less than many peer nations on primary and secondary education.  In 2009, the United States only spent 25% of its per capita GDP on secondary education, while Austria spent 30% and Italy spent 29%, according to the Organization for Economic Cooperation and Development (OECD).

If teacher salaries continue to decrease, the quality of American education will decline, and America will fall further behind, Sims argues. He says that paying teachers well is critical to maintaining education quality.

“It is standard economics and common sense that, if you want to attract talent, you increase pay—you certainly do not decrease it,” he says.

VIDEO: Meet Flora Roddy. She's an NEA member, administrative secretary, and one of a growing number of ESPs who do not earn a living wage. This is her story.


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