Turning to the census data, Figure 3 shows how inefficient each state is at converting new per-pupil education spending into per-pupil teaching wages (higher teaching salaries and new teaching hiring, including teaching assistants). Nationally, only 7 cents of every new dollar invested in education from 2002 to 2020 went to education salaries. Massachusetts has led the nation in effectively translating new education spending into teacher salaries. But even in this case, it only amounted to 34 cents per new education dollar per student.
This lens allows for better comparisons between states making varying amounts of new investments in public education. For example, Nebraska ranked 33rd nationally in revenue growth from 2002 to 2020 and 29th in average teacher salaries. However, as Figure 3 shows, Nebraska converted 32 cents of every new dollar into higher education spending, ranking second in the nation during this period. By contrast, Pennsylvania ranked sixth in per-pupil revenue growth and 10th in average teacher salaries. But from 2002 to 2020, the state underperformed the national average by putting only 5 cents of every new dollar into education payroll spending. Pennsylvania has invested more money in public education than Nebraska over the past 20 years and has higher overall teacher salaries, but Nebraska has done much better at putting new money into classrooms.
States with higher spending growth rates generally do better at converting new money into education benefits. That is, states with slower spending growth (Ohio, Mississippi) were more efficient at putting new money into education benefits than states with higher spending growth (California, New Jersey). And states with low spending growth, like Georgia and Missouri, shouldn't be left out of the loop. less A per-student teaching stipend is funded. No state is doing a very good job of raising new funding for education salaries, which suggests the problem is systemic.
Why raising teacher salaries is easier said than done
Why do states prioritize teacher pay so poorly? First, salary is not the only component of total compensation. From 2002 to 2020, the compensation gains teachers made were largely wiped out by higher benefit costs. Figure 1 shows an increase of nearly $1,000 (79%) in per-student education benefit costs, consisting primarily of retirement and health care costs. For every new dollar that went into education pay, $4 went to benefits. Importantly, the increase in benefit costs is primarily due to increased unfunded liabilities in teacher pension systems, which explains why states with poor pension systems, such as Pennsylvania and New Jersey, have not achieved adequate teacher pay increases despite sufficient K-12 investments. It helps.
Second, A Crossroads in Public Education details how states are prioritizing hiring new staff, especially non-teaching staff, such as school-level support staff, over increasing salaries for existing teachers. Nationally, overall public school staff increased 13.2% from 2002 to 2020, while enrollment increased 6.6%. The number of non-teaching staff alone increased by 20%. The issue of welfare costs also arises here. This is because new employees are also affected by rising non-salary compensation costs.
But most fundamentally, compensation and staffing decisions are made primarily at the district level, and district leaders have different incentives than governors or state lawmakers. While state officials may focus on comparing teacher salaries with other states, district leaders are more concerned with day-to-day school operations and competing with neighboring districts for staff. Additionally, district budget officials are risk-averse, so they tend to deploy new funds toward adding marginal support staff rather than increasing teacher salary schedules that tie teachers to their long-term work. As a result, district leaders rarely plan to take advantage of staff reductions or reuse funds for raises.
To be fair, local leaders may have limited authority to make these kinds of astute budget decisions, especially in districts with strong teachers unions. Chief budget officers in Los Angeles or Chicago would roll their eyes if you presented them with long-term budget trade-offs. Even if you desperately need to fix your financial situation, your collective bargaining agreement will never allow it. And because nearly a quarter of America's public school students live in one of the 120 largest school districts, a handful of contracts in union-friendly states can have a big impact on overall staffing and salary trends.
In particular, Figure 3 shows that union stronghold states are generally doing better at raising new funding for teacher salaries. This trend is corroborated by research showing that stronger collective bargaining agreements are associated with higher teacher salaries. But even as a strong union presence prompts district leaders to take steps like: Comparative Better Just because they're using the new money to pay teacher salaries doesn't mean they'll do it. good The task of balancing other budget priorities increases. Teachers unions also have competing incentives, such as adding more members and ensuring disproportionate benefits for senior members, both of which oppose widespread pay increases. Union-friendly states tend to have higher hiring rates and higher benefit costs.
There are no easy solutions
If the goal is to increase teacher pay through new funding, state lawmakers may need to force the issue on local school districts. The country must first strengthen its pension system and free up dollars for salaries. But beyond that, the tools states already use, such as minimum state wage schedules, maximum class sizes, and staffing prescriptions, would need to be put on steroids.
Of course, such an approach would reduce school district autonomy and shake up local salary schedules. It's unclear how strictly funding restrictions can be enforced for wealthy school districts that are funded primarily by local property tax revenue. Likewise, less wealthy areas with less money to go around will have their hands most tightly tied. To see just how difficult this option is, take a look at how Arkansas districts are handling a $14,000 increase in starting teacher salaries in the most recent statewide salary schedule. The state's 71 districts have resorted to condensing salary schedules to temporarily ensure teachers of all experience levels receive equal pay until local leaders fully determine how the new law will impact their budgets.
The only other option currently available within the public education system is what the state is currently doing, but it is equally unattractive. The hope is that much of the new money will go into the education system and some of it will flow to teacher salaries.