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New study: total compensation of public school teachers is 52% greater than fair market value

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Whenever advocates of greater spending on education try to argue that teachers are not paid enough, they always compare teachers to other workers to other workers in terms of years spent in college. On that view, a software engineer with 6 years of college (B.S. and M.S. in computer science) is the same as an English teacher with 6 years of “Education college” (B.Ed and M.Ed in education). But is the ability to write code to perform real-time commercial transactions in a distributed database environment really deserving of the same total compensation as teaching 6-year olds how to read Dr. Seuss books? Is the supply of each skill set the same? Is the demand for each skill set the same? What should the price of each kind of labor be?

Let’s see what this new study from the American Enterprise Institute says.

Excerpt:

The teaching profession is crucial to America’s society and economy, but public-school teachers should receive compensation that is neither higher nor lower than market rates. Do teachers currently receive the proper level of compensation? Standard analytical approaches to this question compare teacher salaries to the salaries of similarly educated and experienced private-sector workers, and then add the value of employer contributions toward fringe benefits. These simple comparisons would indicate that public-school teachers are undercompensated. However, comparing teachers to non-teachers presents special challenges not accounted for in the existing literature.

First, formal educational attainment, such as a degree acquired or years of education completed, is not a good proxy for the earnings potential of school teachers. Public-school teachers earn less in wages on average than non-teachers with the same level of education, but teacher skills generally lag behind those of other workers with similar “paper” qualifications.

Here’s what the study shows:

  • The wage gap between teachers and non-teachers disappears when both groups are matched on an objective measure of cognitive ability rather than on years of education.
  • Public-school teachers earn higher wages than private- school teachers, even when the comparison is limited to secular schools with standard curriculums.
  • Workers who switch from non-teaching jobs to teaching jobs receive a wage increase of roughly 9 percent. Teachers who change to non-teaching jobs, on the other hand, see their wages decrease by roughly 3 percent. This is the opposite of what one would expect if teachers were underpaid.
  • Pension programs for public-school teachers are significantly more generous than the typical private sector retirement plan, but this generosity is hidden by public-sector accounting practices that allow lower employer contributions than a private-sector plan promising the same retirement benefits.
  • Most teachers accrue generous retiree health benefits as they work, but retiree health care is excluded from Bureau of Labor Statistics benefits data and thus frequently overlooked. While rarely offered in the private sector, retiree health coverage for teachers is worth roughly an additional 10 percent of wages.
  • Job security for teachers is considerably greater than in comparable professions. Using a model to calculate the welfare value of job security, we find that job security for typical teachers is worth about an extra 1 percent of wages, rising to 8.6 percent when considering that extra job security protects a premium paid in terms of salaries and benefits.

And they conclude:

We conclude that public-school teacher salaries are comparable to those paid to similarly skilled private sector workers, but that more generous fringe benefits for public-school teachers, including greater job security, make total compensation 52 percent greater than fair market levels, equivalent to more than $120 billion overcharged to taxpayers each year.

Well, maybe teachers are overpaid – but that would be OK if they were somehow super intelligent and productive.

Are teachers intelligent?

CBS Moneywatch explains what the research shows about teachers.

Excerpt:

Research over the years has indicated that education majors, who enter college with the lowest average SAT scores, leave with the highest grades.   Some of academic evidence documenting easy A’s for future teachers goes back more than 50 years!

The latest damning report on the ease of majoring in education comes from research at the University of Missouri, my alma mater.  The study, conducted by economist Cory Koedel shows that education majors receive “substantially higher” grades than students in every other department.

Koedel examined the grades earned by undergraduates during the 2007-2008 school year at three large state universities that include sizable education programs — University of Missouri, Miami (OH) University and Indiana University.  The researcher compared the grades earned by education majors with the grades earned by students in 12 other majors including biology, economics, English, history, philosophy, mathematics, chemistry, psychology and sociology.

Education majors enjoyed grade point averages that were .5 to .8 grade points higher than students in the other college majors. At the University of Missouri, for instance, the average education major has a 3.80 GPA versus 2.99 GPA (science, math, econ majors), 3.12 GPA (social science majors) and 3.16 GPA (humanities majors).

So it is easy for teachers with lower SAT scores to get much higher grades than other applicants to non-teaching programs with much higher SAT scores. It doesn’t sound like the smartest people go to teachers college. Nor does it sound as if they learn anything very challenging when they are there.

Are teachers doing a good job of teaching useful skills?

CNN sheds some light on how well teachers perform.

Excerpt:

Last week, the College Board dealt parents, teachers and the education world a serious blow. According to its latest test results, “SAT reading scores for the high school class of 2011 were the lowest on record, and combined reading and math scores fell to their lowest point since 1995.”

The reading scores, which stand at 497, are noticeably lower than just six years ago, when they stood at 508. And it’s just the second time in the last 20 years that reading scores have dropped so precipitously in a single year.

[…]The 2011 budget for the Department of Education is estimated to top $70 billion, while overall spending on public elementary and secondary education is about $600 billion a year. By comparison, in 1972, before the Department of Education even existed, SAT critical reading scores for college-bound seniors were above 525, more than 20 points higher than they are today, while today’s math scores are only slightly better than in 1972.

So, not only are these highly-paid teachers less intelligent (on average) than other college applicants, but they also fail to educate our children properly. And we are forced to pay them, through taxes, regardless of how they perform. Our children who are suffering from this failed monopoly.

Do teacher unions improve teacher quality?

And do you know who protects bad teachers from being fired, and prevents good teachers from being paid more?

This is why we need to abolish the federal Department of Education and teacher unions. Why are we paying these people ridiculous salaries and benefits to fail our children?

Must-see videos on education policy

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Unemployed college graduate ran up $90,000 of debt while studying English

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Occupy Wall Street vs Tea Party
Occupy Wall Street vs Tea Party

And do you think he is out looking for jobs with his English degree? NO!

The L.A. Times explains. (H/T Dennis Prager)

Excerpt:

For almost a week, Nate Grant has sat cross-legged on a wall at the Occupy Wall Street encampment, holding a cardboard sign that bears his scrawled grievance: “Students Ought Not Be a Means of Profit.”

[…]It doesn’t take long before any conversation in the strikingly youthful crowd in Lower Manhattan turns to the loans many of the twenty-somethings have racked up. It’s not a central theme, like corporate greed and unemployment, but rather a subtext to all the chanting and marching.

Grant left Ithaca College in upstate New York in May with a degree in English and $90,000 in private and federal loans.

An honor student in high school, he could have had a “free ride” if he had gone to a public university in his home state. But he loaded up on student loans so he could enroll in Ithaca’s communications program to study film directing. Within a year, Grant became disenchanted with the program and switched his major.

Unable to find a good job that pays a decent wage using his degree, Grant decided this summer to join the military, hoping to take advantage of a student loan repayment program that could shave $60,000 off his debt.

“I just felt I had to do something to get this monkey off my back,” he said.

Since graduation Grant has been living with his parents in Little Egg Harbor, N.J., and doing odd jobs.

Oh, I hope this turnip doesn’t join the military. Although it would be good for him to get yelled at. It might help him to get his head out of his ass.

The entire student loan system should be privatized so that students who want to study subjects that are highly politicized cannot pay for it with anyone else’s money.

The use of taxpayer funds for college education has to be changed BEFORE the students can run up tens of thousands in debt. Loans should only be granted by corporations to students who are studying math, science, technology and engineering. It’s so easy for the government to hand out taxpayer money for degrees that are more about indoctrination than they are about producing a return on the investment. But it would be a lot less likely to happen if the person doing the lending actually expected to get the money back. We need to grow up as a society. There is no free lunch, somebody has to pay.

UPDATE: My bad, it looks as if some of the Occupy Wall Street protesters are being paid after all. Maybe he is one.

Excerpt:

The former New York office for ACORN, the disbanded community activist group, is playing a key role in the self-proclaimed “leaderless” Occupy Wall Street movement, organizing “guerrilla” protest events and hiring door-to-door canvassers to collect money under the banner of various causes while spending it on protest-related activities, sources tell FoxNews.com.

The former director of New York ACORN, Jon Kest, and his top aides are now busy working at protest events for New York Communities for Change (NYCC). That organization was created in late 2009 when some ACORN offices disbanded and reorganized under new names after undercover video exposes prompted Congress to cut off federal funds.

NYCC’s connection to ACORN isn’t a tenuous one: It works from the former ACORN offices in Brooklyn, uses old ACORN office stationery, employs much of the old ACORN staff and, according to several sources, engages in some of the old organization’s controversial techniques to raise money, interest and awareness for the protests.

Sources said NYCC has hired about 100 former ACORN-affiliated staff members from other cities – paying some of them $100 a day – to attend and support Occupy Wall Street. Dozens of New York homeless people recruited from shelters are also being paid to support the protests, at the rate of $10 an hour, the sources said.

At least some of those hired are being used as door-to-door canvassers to collect money that’s used to support the protests.

Sources said cash donations collected by NYCC on behalf of some unions and various causes are being pooled and spent on Occupy Wall Street. The money is used to buy supplies, pay staff and cover travel expenses for the ex-ACORN members brought to New York for the protests.

In one such case, sources said, NYCC staff members collected cash donations for what they were told was a United Federation of Teachers fundraising drive, but the money was diverted to the protests.

Sources who participated in the teachers union campaign said NYCC supervisors gave them the addresses of union members and told them to go knock on their doors and ask for contributions—and did not mention that the money would go toward Occupy Wall Street expenses. One source said the campaign raked in about $5,000.

I should have known that this was not so much grass roots as astroturf.

News

Why do conservatives accuse Obama of engaging in “class warfare”?

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From the left-leaning Politico. (H/T Dennis Prager)

Excerpt:

Obama has characterized Republican votes against his jobs bill — which are predicated, at least in part, over concern that new, temporary spending financed by tax increases will not help the economy — as a rejection of the most wholesome of American workers.

“They said no to more jobs for teachers, no to more jobs for cops and firefighters,” Obama said during a speech Wednesday to the administration’s Forum on American Latino Heritage, “no to more jobs for construction workers and veterans, no to tax cuts for small-business owners and middle-class Americans.”

But in these same remarks, Obama also subtly suggested something far worse — that his opponents are racially biased.

“I ran for president for the same reason many people came to this country in the first place,” he explained. “Because I believe America should be a place where you can always make it if you try, a place where every child, no matter what they look like [or] where they come from should have a chance to succeed. I still believe in that America. I believe we can be that America again.”

The clear suggestion is that someone has made this country a place where what a child looks like can hinder them — and Obama is the one who can erase the discrimination that has been permitted to return.

First lady Michelle Obama made this point more explicitly at a Washington fundraiser the night before.

“Will we be a country where opportunity is limited to just the few at the top?” the first lady asked. “Or will we give every child — every child — a chance to succeed, no matter where she’s from, or what she looks like, or how much money her parents [have]? Who are we? That’s what’s at stake here.”

Her suggestion that “what’s at stake here” in the 2012 race is whether a child will be judged by color is an outrage, implying that a Republican victory would result in discrimination.

Obama’s rhetoric has become increasingly shrill. I find it very alarming that the President of the United States is somewhere to the left of celebrity blowhards like Michael Moore. How does he expect to negotiate with people in good faith when he is constantly impugning their motives and caricaturing their policies?

In other news, Herman Cain, who is black, leads by 8 points in the Iowa Caucuses. Wouldn’t it be funny to see Barack Obama, who is only half-black, take on Herman Cain in a debate, and accuse him of racism? The rich, pampered Ivy-league ACORN trainer against the businessman with a Masters in Computer science from Purdue, whose mother was a cleaning woman, and whose father worked three jobs.