What to Watch on Jobs Day: How big is the teacher shortfall?
On Friday, the Bureau of Labor Statistics will release September’s numbers on the state of the labor market. As usual, I’ll be paying close attention to nominal wage growth as well as the prime-age employment-to-population ratio, which are two of the best indicators of labor market health. Friday’s report will also give us a chance to examine the “teacher shortfall”—the gap between local public education employment and what is needed to keep up with growth in the student population.
Thousands of local public education jobs were lost during the recession which began in 2008, and those losses continued deep into the official economic recovery, even as more students started school each year. This has been true of public sector jobs in general—continued austerity at all levels of government has been a drag on public sector employment, which has failed to keep up with population growth.
Teacher strikes in several states over the last few years have highlighted deteriorating teacher pay as a critical issue. My colleagues Sylvia Allegretto and Larry Mishel find that average weekly wages of public school teachers have fallen over the last two decades and the teacher wage penalty continues to grow, reaching a record 21.4% in 2018. My colleagues Emma García and Elaine Weiss have further documented shortcomings and teacher shortages and recently how much teachers have to pay out of their own pockets for school supplies for their classrooms. Low pay makes it harder to attract and retain teachers who have the qualifications associated with teacher effectiveness in the classroom.
The costs of a significant teacher employment gap are high, consequences measurable: larger class sizes, fewer teacher aides, fewer extracurricular activities, and changes to curricula. Last year, the local public education job shortfall remained large. To solve this problem, state and local governments need to fund more teaching positions and raise pay to close the teacher pay gap and attract and retain the qualified teachers our children deserve. On Friday, I will compare where jobs in public education should be, using the pre-recession ratio, student population growth, and the most recent jobs numbers.
I’ll also be looking at broader labor market trends. Despite an unemployment rate that continues to hover around 3.7%, the labor market is displaying signs that we are still not yet at full employment. The prime-age employment-to-population ratio remains just below its 2007 peak, and significantly below (1.9 percentage points below) its height in 2000, which is the closest we’ve come to a full employment economy in recent history.
Nominal wage growth, meanwhile, is still below levels consistent with the Federal Reserve’s inflation target combined with long-term potential productivity growth, where it would be expected to be in a stronger economy. Wage growth has been particularly disappointing because it provides further evidence that the deceleration experienced in the first half seems to be holding. And, the Fed’s current path suggests an acknowledgement that the economy seems to be cooling rather than heating up. Reaching genuine full employment should be the main concern of the Fed and other policymakers so that workers—white and black, young and old—see the benefits of tight labor markets in their job prospects and wages.
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