Market Forces & Regional Teaching Salaries
Teacher’s salaries for Alaska, Hawaii, Illinois, California, New England states (except Vermont, New Hampshire, and Maine), and Mid-Atlantic states were, on average, higher than the US average of $47,000 in 2005. Call these the ‘well-off’ states. Conversely, except for Colorado and Georgia, teacher’s salaries from all southeastern and southwestern states were lower than the US average. Call these the ‘reduced’ states. The same is true for starting teacher’s salaries. Average US starting teacher’s salaries were $32,000 in 2005; this figure was only $29,500 in ‘reduced’ states, while in ‘well-off’ states this figure was $35,000.
Based on salary alone (corrected for regional differences in cost of living), there is less perceived and real risk for southern states to hire teachers than ‘well-off’ northeastern states. Econometric analysis has found little correlation between students' achievement and their teachers' characteristics, such as certification, teachers' test scores, their verbal ability, or their education beyond a bachelor's degree. Employers are largely flying in the dark when trying to select the most qualified teachers, adding to overall perceived risk. The market has been attempting to correct this geo-educational wage discrepancy. In the past 10 years teacher’s salaries in ‘well-off’ states have declined, while teacher’s salaries in ‘reduced’ states have markedly increased (though still well below US average).
With respect to these ‘reduced’ states, annual percent increases of teacher’s salaries are typically greater than annual percent increases of salaries in the private sector. In other words, teacher’s salaries have been growing at a faster rate than private sector salaries in the past ten years, thus increasing the school’s demand for teachers in these ‘reduced’ states. The opposite is true in ‘well-off’ states; private sector salaries have grown at a faster rate than teacher’s salaries, decreasing school’s demand for more teachers.
Adding to these market forces, 10-year turnover rates in the educational sector is comparatively high relative to other sectors. This turnover rate appears greater in ‘reduced’ states than in ‘well-off’ states, meaning most southern schools need to replace teachers more quickly than ‘well-off’ states. A recent survey reports that one in every three teachers who leave the profession cites low salary as a reason for their premature (before 10 years) departure. Increasing college tuition and overall inflation has burdened new teachers who see their starting salaries year after year lose purchasing power.
For instance, a teacher in Alabama would expect to start out with a $31,000 salary (the US average), while a seasoned teacher would receive $38,000 (well below the average of $47,000). The same teacher starting out in Washington (an ‘average’ state) would start out with the average $31,000, and see his/her fellow seasoned teachers make $46,000. Substantial salary increases from starting salaries in ‘reduced’ states are not typical. Eventually, seasoned teachers in such states may just get fed up with their stagnate salaries and either find tenure at more lucrative states, obtain higher teaching degrees, or switch job sectors all together.
Based on salary alone (corrected for regional differences in cost of living), there is less perceived and real risk for southern states to hire teachers than ‘well-off’ northeastern states. Econometric analysis has found little correlation between students' achievement and their teachers' characteristics, such as certification, teachers' test scores, their verbal ability, or their education beyond a bachelor's degree. Employers are largely flying in the dark when trying to select the most qualified teachers, adding to overall perceived risk. The market has been attempting to correct this geo-educational wage discrepancy. In the past 10 years teacher’s salaries in ‘well-off’ states have declined, while teacher’s salaries in ‘reduced’ states have markedly increased (though still well below US average).
With respect to these ‘reduced’ states, annual percent increases of teacher’s salaries are typically greater than annual percent increases of salaries in the private sector. In other words, teacher’s salaries have been growing at a faster rate than private sector salaries in the past ten years, thus increasing the school’s demand for teachers in these ‘reduced’ states. The opposite is true in ‘well-off’ states; private sector salaries have grown at a faster rate than teacher’s salaries, decreasing school’s demand for more teachers.
Adding to these market forces, 10-year turnover rates in the educational sector is comparatively high relative to other sectors. This turnover rate appears greater in ‘reduced’ states than in ‘well-off’ states, meaning most southern schools need to replace teachers more quickly than ‘well-off’ states. A recent survey reports that one in every three teachers who leave the profession cites low salary as a reason for their premature (before 10 years) departure. Increasing college tuition and overall inflation has burdened new teachers who see their starting salaries year after year lose purchasing power.
For instance, a teacher in Alabama would expect to start out with a $31,000 salary (the US average), while a seasoned teacher would receive $38,000 (well below the average of $47,000). The same teacher starting out in Washington (an ‘average’ state) would start out with the average $31,000, and see his/her fellow seasoned teachers make $46,000. Substantial salary increases from starting salaries in ‘reduced’ states are not typical. Eventually, seasoned teachers in such states may just get fed up with their stagnate salaries and either find tenure at more lucrative states, obtain higher teaching degrees, or switch job sectors all together.
Sources
1) American Federation of Teachers. Survey and Analysis of Teacher Salary Trends 2005.
http://www.aft.org/salary/2005/download/AFT2005SalarySurvey.pdf
2) Falch T & Strøm B. Teacher Turnover and Non-pecuniary Factors. Economics of Education Review. Dec 2005; 24(6): 611-631.
3) Hanushek EA, Kain JF, & Rivkin SG. Why Public Schools Lose Teachers. The Journal of Human Resources. Spring 2004; 39(2): 326-354.
4) Monk DH. Recruiting and Retaining High-Quality Teachers in Rural Areas. The Future of Children. Spring 2007; 17(1): 155-174.
5) Rothstein R & Podgursky MJ. How to Improve the Supply of High Quality Teachers. Brookings Papers on Education Policy 2004, 25-39.
6) Roza, M & Hill PT. How Within-District Spending Inequities Help Some Schools to Fail. Brookings Papers on Education Policy. 2004, 201-218.
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