Teacher Pay Penalty

EPI has a good article on Teacher salaries. I stole part of it to paste on Angry Bear

The Teacher Pay Penalty reached a record high in 2024: Three decades of leaving public school teachers behind, Economic Policy Institute

Over the past three decades, stagnant weekly wages of public school teachers have fallen further and further behind those of college graduates who chose other careers, resulting in an ever increasing teacher pay gap that hit a record high in 2024.

• Over the last decade, inflation-adjusted weekly wages for teachers declined by $46.39 but increased by $220.46 for other college graduates.

• The regression-adjusted relative gap between the weekly wages of teachers and college graduates working in other professions grew to a record 26.9% in 2024, a significant increase from 6.1% in 1996.

• On average, teachers earned 73.1 cents for every dollar relative to the earnings of other similar professionals in 2024—much less than the 93.9 cents earned in 1996.

• Although teachers typically receive better benefits packages than other professionals, this “benefits advantage” is not sufficiently large to offset the growing wage penalty that teachers face. In 2024, the teacher total compensation gap was -17.1%.

• Across states, relative teacher pay gaps span from -10.0% in Rhode Island to -38.5% in Colorado. The relative teacher pay penalty was at least 25% in 20 states.

Why this matters

Closing the pay gap between public teachers and similarly educated professionals is essential to attracting and retaining qualified educators, boosting student achievement, and securing the future of public education.

Simple level differences: Weekly wage trends

The trends in the average weekly wages of public school teachers and other college graduates are shown in Figure A. These data are national annual averages adjusted only for inflation (i.e., not regression-adjusted). It is important to keep in mind that real improvements in living standards require wages to outpace inflation, which has been the case for other college graduates but not for teachers. 

As shown in Figure A, the inflation-adjusted weekly wages for teachers were relatively flat from 1996 through 2021, indicating that teacher wages, on average, were just keeping up with the rate of inflation. By 2024, teacher wages were 5.3% less than they were on average in 1996. The average weekly wages of other college graduates also experienced a stretch of stagnation, but for a shorter time span (2002–2014), after which real increases ensued. Since 1996, the wages of other college graduates increased by just over 30%.

Addressing the long-term stagnation of teacher wages requires that future increases in pay exceed future rates of inflation to recover the loss in wages since 2021 and to drive an increasing trend in teacher wages.

Relative differences: Regression-adjusted trends

The average weekly wages discussed in Figure A are simple averages (i.e., they are not regression-adjusted) for teachers and other college graduates; they represent the underlying data used in the regression analyses. Regression estimation helps to account for ways the two groups may differ fundamentally which typically affect pay on margins such as age, educational attainment, race/ethnicity, and state of residence. For instance, all else being equal, one would expect experienced workers to earn more than younger workers who are just starting out in their careers. Controlling for age within a regression model therefore accounts for such differences across the two samples. Thus, standard regression techniques are used to estimate weekly wages of public school teachers relative to other similarly situated college graduates working in other professions, which can provide a more apples-to-apples comparison of earnings.

Regression Based Results

Regression-based results are reported in Figure B. They show how much less (or more) teachers earn in weekly wages relative to other college graduates, estimated via regression analysis. A weekly wage “penalty” for teachers is reported when the regression estimates suggest that teachers, all else equal, are paid less than other college graduates. A penalty appears as a negative number in Figure B. When teachers are paid relatively more, the number is positive and is referred to as a “premium.” Estimates are reported for all teachers (which includes a gender control), as well as separately for women and men.

The main takeaway from Figure B is the nearly 30-year trend of relative teacher weekly wages increasingly falling behind those of other similarly qualified professionals. Pre-1994, the teacher wage gap averaged 8.7%, but the shortfall worsened considerably starting in the mid-1990s. The teaching penalty hit a record of 26.9% in 2024, which was slightly worse than the penalty recorded in 2023 (26.6%). Otherwise, on average, teachers earned 73.1 cents on the dollar in 2024, compared with what similar college graduates earned working in other professions—much less than the relative 93.9 cents on the dollar that teachers earned in 1996.

Separating the analysis by gender shows that in the pre-1994 period, the relative female teacher weekly wage (i.e., comparing female teachers with other female college graduates) was at a premium that averaged 3.3%. But starting in 1996, the female gap quickly went from parity to a penalty, landing at a 21.5% penalty in 2024.

The simple average weekly wages (inflation-adjusted) of female teachers compared with their nonteaching counterparts grew in lock step from 1979 until they started to diverge in the late-1990s. They were close to parity in 1996, when other female college graduates earned just 0.7% more than female teachers. But this divide grew nearly every year—reaching 40.9% in 2024.

Relative teacher weekly wage penalties by state

One last point or comparison. The author has reported the relative teacher weekly wage penalty in the United States was 26.9% in 2024. There is also much variation across the country. To produce regression estimates by state, I pool six years (2019–2024) of CPS data to assure ample sample sizes for each state. Again, I compare public school teachers with nonteacher college graduates within each state and estimate regression-adjusted weekly wage gaps for each state and the District of Columbia.

As in previous reports, Figure C shows that in no state does the relative (i.e., regression-adjusted) weekly wage for teachers equal or surpass that of their nonteaching college graduate counterparts. The results are sorted from the largest (38.5%) to the smallest (10.0%) penalties across the United States.

The teaching penalty was at least 25% in 20 states and at least 30% in nine states. In those nine states, teachers on average earn less than 70 cents on the dollar compared with similar college graduates in their respective states—ranging from 69.2 cents on the dollar in Kentucky to 61.5 cents in Colorado.