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EconomicPolicyInstitute March 14, 2008

Because of your interest in education matters, we are sending this announcement regarding three recent reports released by EPI on teacher pay and the achievement gap. All research on the subject is posted on our education page.

Teacher’s wages are falling further behind
For all the attempts to improve education in recent years, one tactic apparently hasn’t been tried: Raising wages to draw top talent to the vocation of teaching. In fact, according to an EPI study released last week, relative pay for public school teachers has been falling rather dramatically, even when benefits and time off are taken into consideration. The Teaching Penalty

The Teaching Penalty, by EPI research associates Sylvia Allegretto and Sean Corcoran and President Lawrence Mishel, shows that weekly earnings for teachers have lost ground any way you slice it–by education, by gender, and by age. The report is available in book form and is posted in full on our Web site.

The trends are shown graphically in this recent Snapshot. In 2006, public school teachers earned 15.1% less than other employees with comparable education credentials and experience–a substantial jump since 1996, when the disadvantage was only 4.3%. Men were particularly disadvantaged–by 25.5%, compared to 10.5% for women–because in the larger economy, men tend to earn more. Mishel explains that teachers did not share in the earnings gains experienced by most U.S. workers in the late 1990s. When wages stagnated for all college graduates in the new millennium, those of teachers fared even worse.

Merit pay schemes in other professional fields point to potential problems when used in education
Education policy makers designing incentive plans for teachers have paid insufficient attention to similar experiences in other fields. This paper [PDF] by Richard Rothstein describes the perverse consequences that have followed the adoption of incentive pay systems in health care, job training and welfare administration. Because of such consequences, private sector performance incentives have changed to rely primarily on subjective evaluations, not easily-corrupted quantitative measurements. In the public sector and service professions like teaching, performance incentives run the risk of subverting the intrinsic motivation of agents. The paper notes, however, that despite goal distortion, gaming, and corruption, performance incentive plans may nonetheless improve average performance on measured dimensions.

A report card on racial equity in a broader sense
The “achievement gap” usually refers to the difference between black and white students’ basic-skills test scores. But education and youth development also includes critical thinking, social skills, work ethic, citizenship and community responsibility, physical health, emotional health, appreciation of the arts and literature, and preparation for skilled work. Greater equity in outcomes requires narrowing the achievement gap in each of these areas. In this “Report Card on Comprehensive Equity,” Richard Rothstein, Rebecca Jacobsen, and Tamara Wilder estimate the black-white achievement gaps in each of these aspects of education and youth development, and illustrate the types of data gathering which should be undertaken for ongoing measurement of these gaps.

Noteworthy: Richard Rothstein, an EPI research associate and author of the previous two studies, was honored by the American Education Finance Association for his writings on education in books, his New York Times column, and elsewhere. In selecting Rothstein for the prestigious annual award, AEFA officials praised his work for its “accuracy, objectivity, and insight.”

From the EPI Blog
Elise Gould
New Wages and Salaries Data from the Employment Cost Index Show Yet Again It’s Not Quite Time To Declare Mission Accomplished  
Valerie Wilson
Who Among African Americans is Counted in the Labor Market and in the Voting Booth?
Josh Bivens
Yes, GDP Is Up. But the Recovery Hasn’t Broken Through.
Joshua Smith
Myths and Facts About Corporate Taxes, Part 3: Are American Companies’ Profits Trapped Overseas?
Joshua Smith
High-income Households Pay a Large Share of US Taxes—But This Doesn’t Make Our Tax System Progressive
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