The ‘Underpaid Teachers’ Myth

Applying the same method, telemarketers don’t make enough and nurses are overpaid.

By Jason Richwine and Andrew G. Biggs. Mr. Richwine is a public-policy analyst based in Washington. Mr. Biggs is a resident scholar at the American Enterprise Institute.

"Take the annual reports on public-school teacher pay produced by the Economic Policy Institute—a Washington think tank whose board includes the president of the American Federation of Teachers. The 2019 edition claims the nation’s public-school teachers were underpaid by a record 21.4% in 2018, with state-level teacher-pay penalties ranging from 0.2% in Wyoming to 32.6% in Arizona. The think tank’s figures have been mentioned hundreds of times in media coverage of disputes over teacher pay in states such as Arizona, Kentucky and Oklahoma.

To measure the teacher pay gap, EPI researchers compare teacher salaries with the salaries of people who have the same number of years of education and the same demographic characteristics. This model assumes that education is interchangeable—that a bachelor’s degree in education has the same market value as a bachelor’s in engineering, and a master’s in education is worth the same as a master’s in business administration.

In the real world, employees are paid not only for the number of years they sat in a classroom, but according to the supply of and demand for the skills they developed there—skills that obviously vary across occupations. Nursing, for example, demands both technical knowledge and enormous attention to detail, as even a momentary lapse can endanger a patient’s life. You can’t reasonably conclude that nurses are “overpaid” simply because they earn more than typical college graduates. And it’s just as illogical to assume that teachers are underpaid because they earn less—yet dozens of state and national media sources repeat the EPI figures as fact.

If you accept the Economic Policy Institute’s findings, ludicrous conclusions follow. We used the same census data and the same techniques to figure out if other professions were “overpaid” or “underpaid.” We could just as easily write papers publicizing the 25% “firefighter pay premium” or the 10% “massage therapist pay penalty” based on their methods. We could complain that aerospace engineers are overpaid by 38%, and we could demand justice for telemarketers who are shortchanged by 26%.

If public-school teachers were truly underpaid, we might expect teachers to reap much higher salaries when they switch to nonteaching jobs. They don’t. We also might expect to see public-school teachers paid less than those in private schools. In fact, public-school teacher salaries are roughly 16% higher than in nonreligious private schools. We might expect that teachers would receive lower salaries than people whose jobs had similar skill requirements. The Bureau of Labor Statistics’ National Compensation Survey, which includes job-skill requirements, fails to show a teacher pay penalty."