Are teachers underpaid?

NewImageFordham’s Michael Podgursky argues that the Labor Department doesn’t take into consideration the generous benefits of government school teachers — benefits that no one in the private sector gets!

Public school teachers and other public employees receive far more generous pension benefits than private-sector workers. The value of those benefits isn’t calculated accurately in Labor Department statistics, he writes.

Let’s say that the Fordham Institute contributes $1 to a 403(b) plan for its employee (we’ll call him Mike). D.C. Public Schools makes a contribution of $1 for Mary, a public school teacher, to its teacher retirement fund. Mike invests his $1 in a low risk government bond and earns 2 percent for twenty years. The D.C. teacher retirement fund, by contrast, assumes that it will earn 7.5 percent over the long run and gives out benefits to Mary accordingly. Moreover, these promises to Mary are legally binding and can’t be cut, so from Mary’s point of view, this is a risk free benefit.

At the end of twenty years, Mike has $1.49 in his account, but Mary has a benefit worth $4.25.

He cites a 2011 analysis by Andrew Biggs and Jason Richwine which found “workers who switch from non-teaching jobs to teaching jobs receive a wage increase of roughly 9 percent,” while “teachers who change to non-teaching jobs . . . see their wages decrease by roughly 3 percent.”

San Francisco Bay Area districts with high housing costs are offering “bonuses that can range from $1,000 to $10,000 for hard-to-fill positions in special education, math, science, dual immersion language, and for speech pathologists and school psychologists,” reports the San Jose Mercury News.