Why are teachers and other talkers paid less than engineers and other doers?

Basic Economics: Prices are set by supply and demand
Basic Economics: In a free market, prices are set by supply and demand

This meme makes fun of unionized public school teachers, who feel entitled to the same salary and benefits as doctors, software engineers, etc. in the private sector. So, the point of this meme is simple, it’s to point out that the teachers who belong to teacher unions are ignorant of basic economics, specifically, the law of supply and demand.

When there is more demand for a product or service than there is a supply for it, then prices go up. When there is more supply for a product or service than there is a demand for it, prices go down.

A good place to see this explained is in a book by famous black economist Thomas Sowell. Thomas Sowell has written many books, but he wrote one book in particular for people who have no knowledge of basic economics. It’s called “Basic Economics: A Citizen’s Guide to the Economy“. And the first few chapters explain how prices are set by supply and demand:

  1. What is Economics?
  2. The Role of Prices
  3. Price Controls
  4. An Overview of Prices

It turns out that there are two views of how wages are set in an economy:

The labor theory of value (LTV) is a theory of value that argues that the economic value of a good or service is determined by the total amount of “socially necessary labor” required to produce it.

LTV is usually associated with Marxian economics… The LTV is central to Marxist theory, which holds that the working class is exploited under capitalism, and dissociates price and value. Marx did not refer to his own theory of value as a “labour theory of value”.

Mainstream neoclassical economics tends to reject the need for a LTV, concentrating instead on a theory of price determined by supply and demand.

Marxists economists believe that the value of a good or service is determined by the “social utility” of the work produced. But classical (“free market”) economists believe that value is determined by the scarcity of the good or service relative to the demand from consumers.

So, a Marxist economist might say “teaching English to 5 year olds is valuable because it is relevant and meaningful”. But, a classical economist would say “conducting a security audit on distributed point-of-sale system is valuable, because very few people can do it, but many people want it”.

I’ve noticed that school teachers and non-STEM university students and professors are very likely  to hold to the labor theory of prices and wages. Robert Nozick wrote a paper about why this happens. It turns out that “wordsmiths” (his word) are conditioned by their performance in the classroom to expect success in the free market economy. But when they find that their “brilliance” in English poetry, Medieval history, or lesbian dance theory has no value to anyone else, they complain that the economy is being manipulated by powerful people. Marxism is a coping mechanism for people who value academic acclaim more than doing something useful for their neighbors. The Marxists study easy things that no one cares about, and then they can’t get paid because millions of people can do them. The free market people focus on the customer, so they study hard things like computer science and petroleum engineering that are in demand from customers. And they get paid more.

Starting and Mid-Career salaries by profession (click for larger image)
Starting and Mid-Career salaries by profession (click for larger image)

Consider this article from College Pulse about a survey of 10,590 undergraduate students:

Students with certain majors are far more likely than their peers to approve of socialism. Philosophy majors, in particular, have a positive view of socialism. Nearly 8 in 10 (78%) say they view the economic system favorably, followed by 64% of anthropology majors, and 58% of both English and international relations majors. Accounting and finance majors are least likely to view socialism positively (20% and 22% respectively).

Do you know what accounting and finance students have to study? Basic economics.

As soon as I got my first job as a software engineer, and finished my study of Christian apologetics, the very next thing I studied was economics. It was Dr. Jay Richards who got me interested in it, when I heard him speaking about economics in an apologetics lecture for Stand to Reason. I contacted him, and he recommended the works of two famous economists, F. A. Hayek and Thomas Sowell. And that’s what I want to recommend to you, too. Our continued liberty and prosperity depends on ordinary Americans taking the time to educate themselves about basic economics.

5 thoughts on “Why are teachers and other talkers paid less than engineers and other doers?”

  1. Marxists yearn for the precapitalistic age, even as they can’t comprehend how capitalism makes their life of words possible.

    “In the precapitalistic ages writing was an unremunerative art. Blacksmiths and shoemakers could make a living, but authors could not. Writing was a liberal art, a hobby, but not a profession. It was a noble pursuit of wealthy people, of kings, grandees and statesmen, of patricians and other gentlemen of independent means. It was practiced in spare time by bishops and monks, university teachers and soldiers. The penniless man whom an irresistible impulse prompted to write had first to secure some source of revenue other than authorship.”

    Mises, Ludwig von (1956). The Anti-Capitalistic Mentality

    Liked by 1 person

  2. I’ll take your post for a little tangent:

    There’s always Dunning-Kruger (cognitive bias).

    My now retired senior pastor quoted various surveys of educators (and mind you, he is still a seminary professor and was when he was a senior pastor) —

    When teachers were asked “As compared to your PEERS” [note the wording: it’s not compared to the general population] “…where do you rank yourself in terms of teaching ability.”

    Realistically, you should expect somewhere around half say they are above average and half should think they are below average.

    However, teachers thought they were all above average, and the higher up you were teaching, the more they thought they were in the top quarter *as compared to their peers*.

    Are there any ways to remove bad teachers? Not really — short of committing fraud of having Homeland Security take away your computer due to inappropriate materials or if you’re male, having relationships with students (okay, sometimes female teachers get a slap on the wrist, sometimes they get lambasted), most teachers’ jobs are pretty safe. (Except for private schools, effectively teachers are government employees…)

    Engineering? Well, as we know, it’s hard to get into an engineering program. It’s hard to graduate. There are schools that deliberately do weed-out classes for the first couple of years. I can’t think of any friend who did engineering (even not from my alma mater) who wasn’t an A student in math. You can’t survive engineering without being a very good STEM student.

    Upon graduating, you still have to work on technical skills. There are many things school won’t teach you.

    And then if you are incompetent or ineffective or your pay doesn’t correlate to your abilities, you are going to lose your job.

    Liked by 1 person

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