One Way to Improve Teacher Salaries

Update 9/11/14:

In a bit of propitious timing, Tamara Hiller and Lanae Erickson Hatalsky of the Third Way released a new report today detailing the need for better loan assistance for teachers. They find that only 31.7% of teachers are even aware of federal loan assistance programs for teachers.

Additionally, they cite data showing that more than two-thirds of teachers have student loan debt. Teachers with only a bachelor's degree have an average of $20,000 in loan debt, while teachers with a Masters degree have a whopping $50,000 in loan debt. 

This report simply makes the proposals outlined below that much better of an idea. I also support Hiller and Hatalsky's proposals for streamlining loan assistance programs. 

I've also updated this post to include a link to a new study comparing American teachers to teachers in other countries that was just released. 

In yesterday's post on educational reform, I advocated for higher teacher salaries, and promised to offer one method of doing so today. Realistically, raising local taxes to boost teacher salaries isn't happening. Nor would that address the problem of low paid private school teachers.

As such, I thought that I'd offer a more realistic option that is based upon our history of governing, and our current economic situation. 

In addition to leading to better and more innovative teaching, increased teacher salaries would also provide a myriad of other societal benefits. The promise of increased salaries would also provide a powerful incentive for teachers to give up tenure voluntarily and take part in shaping a merit-based pay structure. 

How can we achieve this goal in our current economic climate? 

Congress should making teaching salaries fully tax exempt. Additionally, any person willing to teach at a school in a high risk area for 5 years ought to have all federal student loans forgiven.

Americans have long preferred what historian Brian Balogh calls Government Out of Sight, and as such, lawmakers frequently implement policy through the tax code (preferring tax breaks to government handouts).

Lobbyists’ superior knowledge of the tax code and legislative process has allowed them to add many tax breaks for the wealthiest Americans without scrutiny. By contrast, exempting teaching salaries from income tax would be a simple provision, easily understandable by the masses, beneficial to the 3.7 million American teachers (this number has likely increased in the last two years), and offering the potential to solve many major problems, including the flight of business overseas, poverty, and a failed educational system, all at a relatively low cost. 

    The educational system is inadequate partly because America’s best and brightest have little incentive to take up teaching because of the noncompetitive teacher salaries (the average starting salary was $36,141 in 2012-2013).

Great teachers could inspire youth who today have little hope for success, and who often turn to crime and delinquency out of desperation and hopelessness. Additionally, many students who don’t turn to crime often pay little attention in school because they simply aren’t inspired by their teachers.

Even the most skilled and experienced teachers can be uninspiring because they are forced to work multiple jobs to make ends meet. Thus they come to school exhausted and simply don’t have the time to lesson plan creatively or reach out to students. While their classes might be sufficient for naturally motivated and talented students, they simply cannot capture the imaginations of students who are less focused, confused, or who find school dry and boring.

In an increasingly competitive global marketplace we can no longer afford to lose these students, who often leave school without the skills they need to be economically competitive (and thus end up dependent on welfare programs). 

To get capable, energized, focused teachers, we must compensate them at a level commensurate with their training (a 2011 study reported that teachers make 14% less than their peers with similar training and educational attainment and a 2010 report indicates that primary school teachers make 67% of what the average college educated American worker makes. A new study also shows that American teachers work harder than their peers in other countries, and get paid less well for their extra effort)

That is a daunting prospect at a time when the local governments responsible for paying teachers are hemorrhaging red ink and voters are increasingly resistant to tax increases. By contrast, exempting teaching salaries from federal income tax would provide a large raise for teachers (an average of $14,095) without strapping local communities with further budget problems. In the scheme of the federal budget, the estimated maximum potential cost of this initiative is small.

At a cost $52.154 billion per year (likely it would cost far less because that estimate assumes that teachers pay a 25% tax rate on the average teacher salary of $56,383 — here's data on teacher salaries by state), the cost would represent roughly 1.4% (see this table for FY2011 government outlays) of what the government spent in FY2011.

Even loan-forgiveness would likely minimally affect the overall federal budget (which is likely be roughly $3.8 trillion in FY2014 including $1.1014 trillion in discretionary spending. This benefit could even be paid for by closing other tax loopholes that provide less widespread benefit to society. 

Unlike the phalanx of corporate loopholes, the provision would be easy to administer; teachers could simply submit evidence of teaching status in lieu of filing a tax return. 

This proposal also offers the added benefit of reducing the glut of recent college graduates struggling to find jobs that allow them to pay college loans (a 2013 report showed that 7 out of 10 college students have student loan debt, with the average debt being $29,400) and move out on their own (a 2012 study shows that 49% of college graduates between 2006-2011 failed to find full time work), thereby benefitting their parents, who have increasingly been asked to support children into their twenties and thirties. 

This proposal even incorporates the ideas of conservatives who oppose most government spending and who advocate school choice. Rather than being a handout, it rewards work that benefits our communities. Additionally, it applies equally to public and private school teachers, thereby benefitting private and parochial schools, without harming public schools and without running afoul of the Constitution’s Establishment Clause. 

 Why teachers and not say, police officers or firefighters? Those crucial jobs go to Americans with less education and training, and therefore, in many cases, fewer school debts, which necessitate higher salaries to survive. In an era of skyrocketing deficits, we must prioritize government dollars, and in a competitive marketplace, the only way to get our best young talents to eschew business, i-banking, or law for teaching is to pay them competitively.

Finally, unlike many other critical public service jobs, teaching is an investment in America’s future—better teachers will result in a more skilled work-force that can grow the economy, thereby resulting in more revenue to better compensate other important public servants. 

America is at a crossroads and the key to a brighter future is an inspired and well educated population, and this plan would help to achieve that goal.

A few more links detailing how out of whack our teacher salaries are, both in terms of what other professionals make and what teachers in other countries make: 

Mckinsey Report 

The Teacher Salary Project