Key takeaways

• Proposed state legislation to extend full, equal collective bargaining rights to all state and local government workers can help Virginia:
  • reduce the state’s large public-sector pay gap
  • improve public services
  • reduce staff vacancies and turnover
  • decrease racial and gender wage disparities
• Strong collective bargaining rights and increased unionization rates are highly correlated with numerous, widely shared benefits including higher wages, more equitable state economies, and healthier democracies.
• Virginia currently has one of the largest public-sector pay gaps in the nation. State and local government employees in Virginia earn, on average, 26.7% less than private-sector peers with similar education and experience.
• The public-sector pay gap varies across states and is largest in states like Virginia where most public employees lack collective bargaining rights. In Virginia, collective bargaining is currently banned for state employees and only recently became permitted for some local government employees.

In 2026, Virginia lawmakers are poised to consider transformative legislation that would extend full collective bargaining rights to public employees at all levels of state and local government. The benefits of comprehensive collective bargaining rights would extend far beyond affected public employees who would enjoy better working conditions. Stronger state collective bargaining laws can help improve the quality of public services and economic outcomes for all Virginians.

Data show that strong collective bargaining laws help states address persistent public-sector pay gaps, reduce staff vacancies and turnover, and lead to higher unionization rates (Morrissey and Sherer 2024). Increased unionization rates are highly correlated with numerous, widely shared benefits including more equitable state economies and healthier democracies (McNicholas et al. 2025).

For Virginia, expanding public-sector bargaining is a critical next step in building an economy that works for all. The expansion will reverse a long history of anti-worker state policies that have suppressed wages and limited workers’ power in the labor market by blocking pathways to unionization. Such policies have resulted in greater income inequality and persistent racial and gender wage disparities (Bivens and Shierholz 2018; Mishel and Bivens 2021). Strong, comprehensive state legislation covering public employees’ labor rights is also especially important at a moment when the federal government has been attacking the jobs, working conditions, and union contracts of over 235,000 federal civil servants residing in Virginia, and threatening long-standing federal protections of all workers’ rights (EPI 2025b; Oakford and Poydock 2025). 

This report examines how public-sector workers with limited or no collective bargaining rights fare compared with public-sector workers with well-established collective bargaining rights. To do so, we estimate pay differences between state and local government workers and private-sector workers with similar education and experience. In this analysis, Virginia is among a minority of states in which state employees have no bargaining rights and only some local government employees have limited bargaining rights. By contrast, 27 states have well-established collective bargaining rights for state and local government workers (Table 1).

The right to bargain collectively over pay is associated with higher unionization rates (union membership as a share of the workforce) in a given state. This report shows that collective bargaining rights and union strength help state and local government workers narrow the pay gap with private-sector workers. We show that the pay gap for public employees is significantly larger when these workers have weak or no bargaining rights, like public employees in Virginia, which has one of the largest public-sector pay gaps in the nation (-26.7%).

Virginia public employees lack collective bargaining rights

Proposed legislation in Virginia would, for the first time in the state’s history, guarantee that all state and local government employees enjoy labor rights similar to those of their private-sector peers (whose rights to collectively bargain are covered under the federal National Labor Relations Act) (HB 1263 and SB 378). The Virginia Assembly passed similar legislation (HB 2764 and SB 917) in 2025, only to have it vetoed by then-Governor Glenn Youngkin (McGinley 2025). 

Virginia is one of a handful of Southern states that for decades explicitly banned public employees and employers from entering into collective bargaining agreements. In 2020, Virginia took an important step toward making collective bargaining newly optional for local governments, but the state’s policies remain out of step compared with most states. Virginia lacks a statewide collective bargaining statute covering all local government employees and still has a ban in place barring state employees from collective bargaining (Borja 2022).

As shown in Table 1, the majority of states and Washington, D.C., already ensure collective bargaining rights for most public employees, including state workers. Many states have had statewide public-sector bargaining statutes in place for decades (Rueben 1996; Sanes and Schmitt 2014). Such laws typically set clear, uniform guidelines for union elections and contract negotiation processes and establish state labor boards charged with fostering productive labor-management relations (including timely contract settlements), ensuring broad awareness of and compliance with statutory guidelines, and mediating or adjudicating disputes as needed.

Table 1

Who are public employees in Virginia?

In 2024, approximately 560,000 Virginians worked in state and local government occupations (BLS-CES 2020–2025). This includes teachers and school staff, firefighters, transit operators, law enforcement, administrative staff, and employees serving the state’s public safety, transportation, health care, judicial, corrections, and higher education systems. As shown in Table 2, 21.2% of Virginia state government employees and 20.4% of Virginia local government employees are Black, and 57.3% of state government employees and 64.5% of local government employees are women. Many public-sector workers in the state are highly educated. Virginia public-sector workers are more than twice as likely to have advanced degrees as private-sector workers and are much less likely to have a high-school level or less education.

Table 2

Anti-union state policies are rooted in racism and harm all Virginia workers

Virginia’s ban on union contracts for public employees is a Jim Crow-era policy with deep roots in the history of slavery and white supremacy. After the passage of federal labor laws accelerated worker organizing in the 1930s, Virginia joined several Southern states in adopting anti-union state laws designed to prevent multiracial union organizing and suppress Black workers’ wages and power (Childers 2023). The Virginia Assembly first took an explicit stance on public-sector bargaining in response to the unionization of Black hospital employees at the University of Virginia in 1946, via a joint resolution declaring it against the public policy of the state to negotiate with public employee unions (a stance later affirmed by state supreme court decisions and codified in statute in 1993). Virginia was also among the first states to adopt anti-union so-called right-to-work legislation in 1947, an anti-labor policy jointly promoted by white supremacist organizations and industry groups intent on slowing the growth of unions to maintain access to cheap labor—especially in Southern states (The Commonwealth Institute 2022; Watts 2021; Pierce 2017, 2018; Sherer and Gould 2024).

As a result of these long-standing anti-union state policies, unionization rates in Virginia for both public- and private-sector workers are well below national averages.

Figure A

Narrowing Virginia’s large public-sector pay gap

Across the country, public-sector employees earn less than their private-sector counterparts, and this pay gap has widened in recent years. In the latest available five-year period (September 2020–August 2025), state and local government employees earned, on average, 17.2% less than private-sector employees with similar education and experience. The size of the public-sector pay gap varies across states and is largest in states like Virginia where most public employees lack collective bargaining rights. Public-sector workers with strong bargaining rights experience a narrower pay gap (-14.3%) than those with weak (-19.6%) or no bargaining rights (-22.5%) (see Table 3).

Virginia currently has one of the largest public-sector pay gaps in the nation. Among all 50 states, Virginia’s -26.7% public-sector pay gap appears to be the second highest, though differences among states clustered at the bottom of the rankings are not statistically significant. (Pay gap statistics are for full-time wage and salary workers ages 18–64, based on the authors’ analysis of pooled September 2020–August 2025 Current Population Survey microdata downloaded from Flood et al. 2025 and EPI 2025a.)

Compensation packages of public employees, on average, include more robust benefits than those of private-sector workers, but Virginia’s public-sector compensation gap remains large, even when factoring in more robust benefits. Benefits are an estimated 32.0% of pay for private-sector workers in the South Atlantic region and an estimated 51.3% of pay for Virginia public-sector workers. Factoring in benefits, Virginia’s public-sector compensation gap shrinks to a still sizable 16.0% (authors’ estimate based on BLS-ECEC 2020–2025 and Public Plans Data 2020–2024; see Morrissey and Sherer 2024 for methodology).1

Table 3

Addressing high staff vacancy and turnover rates in Virginia’s public sector

The growing public-sector pay gap has become a particular concern at a moment when low pay has created serious challenges to recruiting and retaining teachers and other public employees across the country (Cooper and Martinez Hickey 2022; MissionSquare Research Institute 2023; Wething 2024a, 2024b; Martinez Hickey 2025). Virginia has faced particularly acute staffing shortages in public education and in units of state government in recent years (Manzanares 2025; Cantor 2025).

The latest (2025) biennial compensation report from the state’s Department of Human Resource Management notes that “Years without any salary adjustments in the past have made it difficult for state agencies to build a proactive and sustainable approach to addressing compensation, recruitment and retention concerns” (VDHRM 2025). Between 2001 and 2023, low average salary increases for state workers (just 2.9% per year, compared with 3.4% annually in the private sector) have led to high vacancy and turnover rates. As of 2024, roughly 1 in 5 (22.4%) state jobs were unfilled, and the median salary across the state workforce was just $61,305—a full $5,000 less than the median city employee salary in Richmond, which has adopted its own collective bargaining ordinance (McGinley 2025).

Chronic state employee staffing shortages are already having direct impacts on the health, safety, and quality of life of Virginians. To take one example, in 2025 the Virginia Department of Juvenile Justice (DJJ) drew headlines after reporting that inability to adequately staff large facilities for incarcerated youth had led to unsafe conditions, lockdowns, increased restrictions on out-of-cell time, and a lack of rehabilitative services. DJJ directors indicated ongoing difficulty recruiting for open positions, despite participating in job fairs, college and university visits, outreach to military and veteran communities, and offering signing bonuses and referral incentives (Manzanares 2025). The root causes of understaffing identified by Virginia state agencies like DJJ—from burnout and high workloads to low starting salaries, lackluster raises, and difficult or unsafe working conditions—are precisely the topics that a structured collective bargaining process would allow state agencies to address, with direct input from frontline employees.

Addressing racial and gender pay gaps to improve recruitment and retention of workers of color and women

The public-sector pay gap disproportionately affects Black workers and women, who are more likely to be employed in public-sector jobs and who are disadvantaged in the broader labor market (Childers 2025). Strengthening collective bargaining rights for government workers in Virginia therefore promises to narrow the pay gap and reduce racial and gender inequalities in public institutions and across the labor market.

For example, a 2024 RAND report showed that Black teachers nationally receive lower average salaries and pay raises than white teachers do, a difference linked directly to the fact that Black teachers were less likely to live in states where public educators had collective bargaining rights. The inadequacy of pay is one of the main reasons teachers report for leaving the profession, further contributing to the demographic mismatch between teachers and students (e.g., nationwide over half of all students are children of color, but the teaching workforce remains around 80% white) (Steiner et al. 2024; Gopalan 2025). Likewise, data show that in states like Wisconsin where legislators have weakened formerly strong collective bargaining rights in the past two decades, resulting decreases in unionization levels and worker wages have measurably widened public-sector pay gaps and gender pay gaps (Nack et al. 2019; García and Han 2021; Biasi and Sarsons 2022).

Building on success and remedying limitations of current state law that only permits local collective bargaining

In 2020, Virginia partially lifted its long-standing ban on public-sector collective bargaining with legislation creating an “opt-in” system that has allowed local governments to set their own policies on whether and how to bargain with their own employees. While this opening fell far short of creating a consistent statewide framework for collective bargaining, it has resulted in at least 17 of Virginia’s largest cities, counties, and school boards adopting collective bargaining ordinances and creating new pathways to union contracts for substantial numbers of public employees—including, for example, 27,000 teachers and school staff and 12,000 county employees in Fairfax County; nearly 4,000 City of Richmond employees; and others (Borja 2022; Sharma 2022; Khalil 2023; Lukert 2024; Pope 2025; Walter 2026).

The local “opt-in” system was a positive step forward that has already revealed high levels of interest in collective bargaining among Virginia workers. The system resulted in new union contracts covering tens of thousands of frontline educators and civil servants, providing an initial boost to Virginia’s historically low unionization rate.

Significant limitations of the new “opt-in” system have also quickly become clear. As noted above, the major shortcoming of the current law is that it does not ensure equal collective bargaining rights for all public employees. Virginia state employees remain barred from collective bargaining, and in local government where collective bargaining is permitted (but not required), workers continue to lack collective bargaining rights, unless they are able to persuade local officials to adopt and then implement a collective bargaining ordinance. When localities do adopt such ordinances, they may vary in strength and effectiveness (Overman 2023).

As a result, Virginia’s current “opt-in” system for local collective bargaining has generated an uneven patchwork of highly variable (and potentially unstable) collective bargaining policies across the state. Some local governments have continued to block workers’ path to a union contract by rejecting appeals from their own employees to adopt local collective bargaining ordinances (Murphy 2024; Cooper 2025; Lytle 2025; Wilkinson 2025). Because current state law leaves the burden of collective bargaining policy development up to each individual local government, some jurisdictions have expressed interest in or support for collective bargaining while remaining reluctant to invest the necessary time or scarce administrative or legal resources to developing and implementing a local ordinance. Even in larger local jurisdictions with strong collective bargaining ordinances now in place, the “opt-in” system remains fragile and highly vulnerable to instability whenever turnover occurs among elected leaders or administrators with experience necessary to maintain unique local labor-management systems.

Creating a state labor board to provide efficiency and stability for all Virginia public employers and employees

A proposed state labor board equipped to administer a statewide, uniform collective bargaining framework would serve all Virginia state and local government entities and provide consistency, efficiency, stability, and economies of scale. All Virginia public employers and employees would benefit from access to a central, independent state board with capacities to advise public employers and employees about collective bargaining procedures, administer union elections, and mediate contract negotiations. The creation of such state capacities is also especially important at moment when federal labor agencies with similar capacities have been eliminated or rendered non-functional. Indeed, across the country, many states are relying more than ever on their existing state labor boards, and in some cases, are exploring paths to expanding state labor board capacities in order to ensure consistent protections of workers’ rights to unionize and collectively bargain (H.B. 3005; Walter and Madland 2025).

Conclusion

In 2026, Virginia lawmakers should seize the opportunity to enact strong, comprehensive collective bargaining legislation that covers all state and local government workers and creates a state labor board to administer the new system. Under Virginia’s current state law (where collective bargaining is banned for state employees and allowed only for some local government workers), pay for Virginia public employees has lagged far behind that of private sector counterparts with similar education and experience.

Stronger collective bargaining rights can help shrink Virginia’s large public-sector pay gap, reduce racial and gender pay gaps, and improve recruitment and retention of qualified public employees. Removing barriers to unionization for public employees is also a critical step toward reversing the impacts of long-standing anti-worker state policies in Virginia that have for decades suppressed all workers’ wages and contributed to growing income inequality. Lastly, state action to shore up public employee rights is especially important at moment when the federal government is attacking civil servants, public education, health care, and all public services. By extending full collective bargaining rights to historically excluded state and local government workers, state lawmakers can help lead the way to a more vibrant, equitable economy rooted in multiracial democracy in Virginia, the South, and the nation.

Notes

1. If anything, our comparison likely minimizes the public-sector compensation gap in Virginia by comparing benefits for private-sector workers in the South Atlantic region to public-sector workers throughout the country because public-sector data for the South Atlantic region is not available from the Bureau of Labor Statistics. Our comparison does account for the fact that Virginia pension benefits are less generous than public pensions in many parts of the country, though possibly not in two Northern Virginia counties with their own retirement systems. It does not fully account for other differences in benefits between Virginia public-sector workers and their counterparts in other states, though it does account for the fact that public-sector workers in Virginia are covered by Social Security (not true in some states) and adds 1% for public-sector retiree health benefits that are not included in BLS compensation statistics. Finally, it compares all public-sector workers with all private-sector workers, when arguably the better comparison would be between public-sector workers and private-sector workers employed by large employers, who tend to provide more generous benefits than small employers.

References

Biasi, Barbara, and Heather Sarsons. 2022. “Flexible Wages, Bargaining, and the Gender Gap.” Quarterly Journal of Economics 137, no. 1 (February): 215–266. https://doi.org/10.1093/qje/qjab026.

Bivens, Josh, and Heidi Shierholz. 2018. What Labor Market Changes Have Generated Inequality and Wage Suppression? Employer Power Is Significant but Largely Constant, Whereas Workers’ Power Has Been Eroded by Policy Actions. Economic Policy Institute, December 2018.

Borja, Mel. 2022. “How Public-Sector Workers Are Building Power in Virginia.” Working Economics Blog (Economic Policy Institute), February 18, 2022.

Brannick, Priya. 2019. The Janus Impact and Grading of State Public Sector Labor Laws. Commonwealth Foundation, August 2019.

Brannick, Priya M., and Andrew Holman. 2022. The Battle for Worker Freedom in the States: Grading State Public Sector Labor Laws. Commonwealth Foundation, September 2022.

Bureau of Labor Statistics (BLS-CES). 2020–2025. Current Employment Survey, State and Area Employment Data. Accessed January 2026.

Bureau of Labor Statistics (BLS-ECEC). 2020–2024. Employer Costs for Employee Compensation data. Accessed January 2026.

Cantor, Dave. 2025. “Virginia Corrections Department has 2,400 Open Positions.” Virginia Public Radio, August 14, 2025.

Childers, Chandra. 2023. Rooted in Racism and Economic Exploitation: The Failed Southern Economic Development Model. Economic Policy Institute, October 2023.

Childers, Chandra. 2025. “Disinvestment in the Public Sector Undermines Opportunities for Black Women Across the South: Trump Cuts Further Threaten Key Services for Working People Across the Nation.” Working Economics Blog (Economic Policy Institute), July 7, 2025.

Commonwealth Foundation. 2021. “Public Sector Labor Law Database.” Accessed May 9, 2021.

Cooper, David, and Sebastian Martinez Hickey. 2022. Raising Pay in Public K–12 Schools Is Critical to Solving Staffing Shortages: Federal Relief Funds Can Provide a Down Payment on Long-Needed Investments in the Education Workforce. Economic Policy Institute, February 2022.

Cooper, Tracy. 2025. “Portsmouth Workers Frustrated by Private Collective Bargaining Talks.” 13 News Now, July 22, 2025.

Dippel, Christian, and Zachary Sauers. 2019. “Does Increased Union Power Cause Pension Under-Funding in the Public Sector?” (preliminary draft). September 23, 2019.

Economic Policy Institute. 2025a. Current Population Survey Extracts, Version 2025.12.18, https://microdata.epi.org.

Economic Policy Institute. 2025b. How Many Federal Employees Live in Your State? Accessed January 12, 2026.

Flood, Sarah, Miriam King, Renae Rodgers, Steven Ruggles, J. Robert Warren, Daniel Backman, Etienne Breton, Grace Cooper, Julia A. Rivera Drew, Stephanie Richards, David Van Riper, and Kari C.W. Williams. IPUMS CPS: Version 13.0 . Minneapolis, MN: IPUMS, 2025. https://doi.org/10.18128/D030.V13.0.

Frandsen, Brigham R., and Michael Webb. 2017. “Public Employee Pensions and Collective Bargaining Rights: Evidence from State and Local Government Finances.” Hutchins Center Working Paper no. 35, The Brookings Institution, October 2017.

García, Emma, and Eunice Han. 2021. The Impact of Changes in Public-Sector Bargaining Laws on Districts’ Spending on Teacher Compensation. Economic Policy Institute, April 2021.

Gopalan, Maithreyi. 2025. “Why Does Teacher-Student Demographic Representation Matter for Student Success?” HEDCO Institute for Evidence-Based Educational Practice, October 15, 2025.

Han, Eunice S. 2019. “The Impact of Teachers Unions on Teachers’ Well-Being Under Various Legal Institutions: Evidence from District–Teacher Matched Data.” American Educational Research Association 5, no. 3 (August). https://doi.org/10.1177/2332858419867291.

H.B. 1263, 2026 H.D., Reg. Sess. (Va. 2026).

H.B. 2764, 2025 H. D., Reg. Sess. (Va. 2025).

H.B. 3005, 2025 Gen. Assemb. (Ill. 2025).

International Association of Fire Fighters (IAFF). n.d. “Collective Bargaining” (web page). Accessed May 2024.

Khalil, Jahd. 2023. “Hundreds of Richmond City Employees Select Unions.” Virginia Public Media, June 23, 2023.

Lukert, Luke. 2024. “Fairfax Co. Teachers Vote Overwhelmingly for Collective Bargaining Rights.” WTOP, June 11, 2024.

Lytle, Derek. 2025. “Virginia Beach School Board Sits Divided on Collective Bargaining.” 13 News Now, November 11, 2025.

Manzanares, Keyris. 2025. “Virginia Juvenile Justice System Strained by Staffing Shortages.” Virginia Public Media, April 9, 2025.

Martinez Hickey, Sebastian. 2025. “The School Bus Driver Shortage Has Improved Slightly but Continues to Stress K–12 Public Education.” Working Economics Blog (Economic Policy Institute), November 3, 2025.

McGinley, Sophie. 2025. Building a More Equitable Commonwealth: The Case for Collective Bargaining Rights for Virginia State Employees. The Commonwealth Institute, August 2025.

McNicholas, Celine, Margaret Poydock, Heidi Shierholz, and Hilary Wething. 2025. Unions Aren’t Just Good for Workers—They Also Benefit Communities and Democracy. Economic Policy Institute, August 2025.

McNicholas, Celine, Lynn Rhinehart, Margaret Poydock, Heidi Shierholz, and Daniel Perez. 2020. Why Unions Are Good for Workers—Especially in a Crisis Like COVID-19: 12 Policies That Would Boost Worker Rights, Safety, and Wages. Economic Policy Institute, August 2020.

Mishel, Lawrence, and Josh Bivens. Identifying the Policy Levers Generating Wage Suppression and Wage Inequality. Economic Policy Institute, May 2021.

MissionSquare Research Institute. 2023. State and Local Government Employment Trends, 2023 (issue brief). May 17, 2023.

Morrissey, Monique, and Jennifer Sherer. 2024. The Public-Sector Pay Gap Is Widening. Unions Help Shrink It. Economic Policy Institute, August 2024.

Murphy, Ryan. 2024. “Virginia Beach Rejects Collective Bargaining for City Employees.” WHRO Public Media, April 30, 2024.

Nack, David, Michael Childers, Alexia Kulwiec, and Armando Ibarra. 2019. “The Recent Evolution of Wisconsin Public Worker Unionism Since Act 10.” Labor Studies Journal 45, no. 2: 147–165. https://doi.org/10.1177/0160449X19860585.

National Conference of State Legislators (NCSL). n.d. “Collective Bargaining database.” Accessed May 2024.

National Council on Teacher Quality (NCTQ). 2019. “Collective Bargaining Laws database.” Updated January 2019.

National Education Association (NEA). 2020. “Collective Bargaining Laws for Public Sector Education Employees,” November 2020 (unpublished document used by permission).

New Mexico Public Employee Labor Relations Board. 2023. Public Sector Collective Bargaining by State.

Oakford, Patrick, and Margaret Poydock. 2025. “Trump Is the Biggest Union-Buster in U.S. History: More Than 1 Million Federal Workers’ Collective Bargaining Rights Are at Risk.” Working Economics Blog (Economic Policy Institute), September 2, 2025.

Overman, Stephenie. 2023. “In Virginia, ‘Patchwork’ of Ordinances Makes Public-Sector Organizing a Maze.” Virginia Mercury, January 16, 2023

Pierce, Michael. 2017. “The Origins of Right-to-Work: Vance Muse, Anti-Semitism, and the Maintenance of Jim Crow Labor Relations.” The Labor and Working-Class History Association, January 12, 2017.

Pierce, Michael. 2018. “Vance Muse and the Racist Origins of Right-to-Work.” Expert Forum (American Constitution Society), February 22, 2018.

Pope, Michael. 2025. “Fairfax County May Soon Be the Home of the Largest Collective Bargaining Agreement in Virginia.” WVTF, September 10, 2025.

Public Plans Data. 2001–2024. Center for Retirement Research at Boston College, MissionSquare Research Institute, National Association of State Retirement Administrators, and the Government Finance Officers Association. Accessed January 5, 2026.

Rueben, Kim. 1996. “Extended NBER Public Sector Collective Bargaining Law Data Set” [Stata and Excel files]. Downloadable data available at www.nber.org/research/data/nber-public-sector-collective-bargaining-law-data-set (see last paragraph on this web page). Accessed January 12, 2026.

Ruggles, Steven, Sarah Flood, Matthew Sobek, Daniel Backman, Grace Cooper, Julia A. Rivera Drew, Stephanie Richards, Renae Rodgers, Jonathan Schroeder, and Kari C.W. Williams. IPUMS USA: Version 16.0 . Minneapolis, MN: IPUMS, 2025. https://doi.org/10.18128/D010.V16.0

Sanes, Milla, and John Schmitt. 2014. Regulation of Public Sector Collective Bargaining in the States. Center for Economic and Policy Research, March 2014.

S.B. 378, 2026 S., Reg. Sess. (Va. 2026).

S.B. 917, 2025 S., Reg. Sess. (Va. 2025).

Sharma, Rahul Chowdry. 2022. “Where Can Public Sector Employees Collectively Bargain in Virginia? Increasingly, the Commonwealth’s Most Populous Cities and Counties.” Virginia Mercury, July 28, 2022.

Sherer, Jennifer, and Elise Gould. 2024. “Data Show Anti-Union ‘Right-to-Work’ Laws Damage State Economies: As Michigan’s Repeal Takes Effect, New Hampshire Should Continue to Reject ‘Right-to-Work’ Legislation.” Working Economics Blog (Economic Policy Institute), February 13, 2024.

Shimabukuro, Jon O., and Julie M. Whittaker. 2014. Federal Labor Relations Statutes: An Overview. Congressional Research Service (CRS) R42526. Updated September 5, 2014.

Steiner, Elizabeth D., Ashley Woo, and Sy Doan. 2024. Larger Pay Increases and Adequate Benefits Could Improve Teacher Retention: Findings from the 2024 State of the American Teacher Survey. RAND Institute, November 20, 2024.

The Commonwealth Institute. 2022. History of Labor in Virginia: An Interactive Timeline and Map. Accessed January 12, 2026.

Valletta, Robert G., and Richard B. Freeman. 1988. “The NBER Public Sector Collective Bargaining Law Data Set.” Appendix B in When Public Employees Unionize, edited by Richard B. Freeman and Casey Ichniowski. NBER and Univ. of Chicago Press.

Virginia Department of Human Resource Management (VDHRM). 2025. Biennial Compensation Report. November 2025.

Walter, Karla. 2026. Virginia Workers’ Biggest Win in Decades Could Come in 2026. Center for American Progress, January 12, 2026.

Walter, Karla, and David Madland. 2025. Union Trigger Laws 101 How States Can Protect Workers if Federal Labor Law Falls. Center for American Progress, November 19, 2025.

Watts, Parker. 2021. “Labor Day Reflections on Race, Power, and Organized Labor in Virginia.” The Commonwealth Institute, September 1, 2021.

Wething, Hilary. 2024a. “Today’s Teacher Shortage Is Just the Tip of the Iceberg: Part I.”“Today’s Teacher Shortage Is Just the Tip of the Iceberg: Part I.” Working Economics Blog (Economic Policy Institute), October 9, 2024.

Wething, Hilary. 2024b. “Today’s Teacher Shortage Is Just the Tip of the Iceberg: Part II.” Working Economics Blog (Economic Policy Institute), October 16, 2024.

Wilkinson, Nolan. 2025. “Proposal to Allow Frederick City Employees to Unionize Tabled.” The Frederick News-Post, September 25, 2025.

Throughout 2025, the Trump administration has discriminated against Black and brown federal employees—and taken actions that make it easier for all employers to follow suit—by weaponizing the enforcement of antidiscrimination laws against the people they were justifiably created to protect. This includes redirecting EEOC priorities toward so-called “DEI-motivated race and sex discrimination and anti-American national origin bias,” restricting use of disparate impact liability, and effectively ending enforcement of equal employment laws for the civilian federal contracting workforce by gutting the Office of Federal Contract Compliance Programs. The administration’s actions clearly demonstrate how risky it is for workers not to have the protections of a legally binding union contract.

A key element of any union contract is protection from unfair and arbitrary dismissals. For school employees, as for so many, the greatest risk is an employer who plays favorites. Whenever an employer has the unfettered right to decide who stays and who goes, workers suffer. In K–12 education, the risk of layoff is a persistent issue because school districts face endemic funding challenges and are frequently forced to reduce staffing levels. Because educator unions don’t want to give principals and superintendents the right to pick and choose who gets laid off based on their own whims, they have traditionally fought for seniority protections, often known as “last in, first out,” or LIFO. Under LIFO contract provisions, seniority is the sole determining factor in layoff decisions, with newer teachers laid off before more senior ones.

However, LIFO has a tremendous drawback: It hinders efforts to recruit and retain Black and brown teachers. In Minneapolis, for example, only 20% of Minneapolis teachers are people of color, even though fully two-thirds of the student body is Black or brown. Similar patterns are observed nationally. Almost half (49.5%) of K–12 students in the U.S. are Black, Hispanic, or Asian American and Pacific Islander, compared with only 24.4% of teachers. As studies have long documented, LIFO contributes to this disparity because even if a school district is able to hire more Black and brown teachers, they will be the first let go as more senior white teachers are retained.

At the same time, however, teachers’ unions are right to fight for layoff provisions that take away the arbitrary power of school districts to pick and choose who they keep. A core function of unions has always been to protect workers across occupations from being subject to the whims of supervisors. Indeed, Black and Hispanic workers report higher levels of unfair dismissals, suggesting that racial inequities would persist or even get worse in the absence of union protections. Union protections are also critical to narrowing pay disparities. According to a 2024 Rand report, Black teachers received lower average salaries and pay raises than white teachers. This difference was further linked to the fact that Black teachers were less likely to live in states with collective bargaining. The inadequacy of pay is one of the main reasons teachers report for leaving the profession, further contributing to the demographic mismatch between teachers and students.

This is the conundrum that MFE sought to address when the union went on strike in 2022: preserving protections against unfair dismissal while mitigating the inequities of LIFO. The solution they reached in 2022, a solution approved by 76% of MFE’s majority-white membership, was elegant and fair. The contract does not guarantee that Black or brown teachers will be protected from layoffs, contrary to the claims of right-wing groups that the contract is “woke” and “racially discriminatory.” Rather, the contract states that, when the district is forced to lay off teachers, it will protect teachers from populations that are “underrepresented among licensed teachers in the district.”

This means the contract’s protections can and will shift over time, as the composition of the teaching workforce changes. If and when Black teachers are no longer underrepresented in the district, they will no longer be afforded special protections against layoffs. Indeed, if someday it is white teachers who are underrepresented, the same contract provisions would apply to them. Far from embedding racial discrimination into the contract, these provisions support the development of a diverse teaching workforce while protecting worker rights.

The goal of a diverse teaching workforce is not just a noble one but also supports the success and well-being of students of color. Research indicates that the presence of teachers who reflect the diversity of the student body is linked to lower rates of suspension, lower dropout rates, greater college aspirations, and improved test scores. The contract MFE fought for will support the careers of Black and brown teachers and will lead to a teaching staff that looks more like its students, while continuing to protect all educators from arbitrary dismissal. The Department of Justice’s claims are a complete distortion of reality. Sadly, that is what we have come to expect from this administration, which seems dead set on rolling back decades of civil rights protections and abdicating the 60-year position of the federal government in setting a higher standard for employing a workforce that represents the diversity of the U.S. population. Hopefully, the courts will recognize this and allow Minneapolis Public Schools to continue its innovative program to protect a diverse workforce.

Providing teachers with compensation commensurate with that of similarly educated and experienced professionals is necessary to retain and attract qualified workers into the teaching profession. Worsening trends in teacher pay influence students’ career choice. While there are many important factors impacting teacher retention and the recruitment of highly qualified students into the profession, one that consistently lands near the top of any list is pay.3 And closing the growing pay gap between teachers and other college graduate professionals is critical to public education, as teacher quality is the most important school-related factor influencing student achievement.4

Data and relevant information

In analyzing differences in pay between public school teachers and other college graduates, I use two sources of data, both from the Bureau of Labor Statistics (BLS).5 First, I use Current Population Survey Outgoing Rotation Groups (CPS-ORG) data for the weekly wage analyses (BLS 2024a). I focus on weekly wages, as opposed to weekly hours worked or the length of the work year, to account for the “summers off” issue that affects teachers but not other college graduates.6 The sample is restricted to full-time workers (working at least 35 hours per week) aged between 18 and 64, with at least a bachelor’s degree, because teachers today need at least a bachelor’s degree to teach.

The sample is further limited to those who reported their wage information directly (those who didn’t respond and whose wages were estimated by BLS are excluded).7 To preserve data confidentiality, the BLS records weekly wages only up to a defined threshold, so the wage amounts above this threshold aren’t specifically identifiable in the data. This is called top-coding. Historically, the threshold was rarely updated. As a result, a growing share of workers are assigned top-coded wages that are below their actual wages, which has generated a growing understatement of college graduate wages relative to those of teachers. I replace original top-coded values with Pareto-distribution implied means above the original CPS top-code separately for men and women.8 My regression analyses also use CPS demographic variables (e.g., gender, race/ethnicity, state of residence, marital status, and age).

The BLS’s National Compensation Survey’s Employer Costs for Employee Compensation program (BLS 2024b) is the second data source. Specifically, I pull data on employer costs per hour worked for detailed categories of compensation for “primary, secondary, and special education school teachers” in the public sector, and the same data for “civilian professionals,” which is the broadest category available that largely corresponds to college graduates. “Benefits,” in this analysis, refer to employer costs for health and life insurance, retirement plans, and payroll taxes (covering Social Security, unemployment insurance, and workers’ compensation).

The remaining components of compensation are “W-2 wages,” a measure that corresponds to the wages captured in the CPS data used above. W-2 wages are the wages reported to employees and to the Internal Revenue Service. They include “direct wages,” defined by the BLS as “regular payments from the employer to the employee as compensation for straight-time hourly work, or for any salaried work performed” and other wage items, including “supplemental pay.” Supplemental pay includes premium pay for overtime, bonus pay, profit-sharing, and paid leave.

Findings

I present results of this research in four sections. I begin with trends in the simple (not regression-adjusted) average weekly wages for public school teachers and other college graduates from 1979 through 2024 (adjusted for inflation). Second, I report annual estimates of the national teacher weekly wage gap using standard regression techniques to control for systematic differences in age, education, state of residence, and other factors known to affect wage rates. Third, I present the regression-adjusted estimates of the teacher wage gap for each state and the District of Columbia in a figure and a map. Lastly, I factor in nonwage benefits are to estimate a total compensation penalty that accounts for the estimated teacher wage penalty, along with the teacher “benefits advantage,” to estimate a total compensation differential at the national level (which is not possible to calculate for each state).

Simple level differences: Weekly wage trends

The trends in the average weekly wages of public school teachers and other college graduates are shown in Figure A. These data are national annual averages adjusted only for inflation (i.e., not regression-adjusted). It is important to keep in mind that real improvements in living standards require wages to outpace inflation, which has been the case for other college graduates but not for teachers. 

Figure A

As shown in Figure A, the inflation-adjusted weekly wages for teachers were relatively flat from 1996 through 2021, indicating that teacher wages, on average, were just keeping up with the rate of inflation. By 2024, teacher wages were 5.3% less than they were on average in 1996. The average weekly wages of other college graduates also experienced a stretch of stagnation, but for a shorter time span (2002–2014), after which real increases ensued. Since 1996, the wages of other college graduates increased by just over 30%.

Addressing the long-term stagnation of teacher wages requires that future increases in pay exceed future rates of inflation to recover the loss in wages since 2021 and to drive an increasing trend in teacher wages.

Relative differences: Regression-adjusted trends

The average weekly wages discussed in Figure A are simple averages (i.e., they are not regression-adjusted) for teachers and other college graduates; they represent the underlying data used in the regression analyses. Regression estimation helps to account for ways the two groups may differ fundamentally which typically affect pay on margins such as age, educational attainment, race/ethnicity, and state of residence. For instance, all else being equal, one would expect experienced workers to earn more than younger workers who are just starting out in their careers. Controlling for age within a regression model therefore accounts for such differences across the two samples. Thus, standard regression techniques are used to estimate weekly wages of public school teachers relative to other similarly situated college graduates working in other professions, which can provide a more apples-to-apples comparison of earnings.9

Regression-based results are reported in Figure B. They show how much less (or more) teachers earn in weekly wages relative to other college graduates, estimated via regression analysis. A weekly wage “penalty” for teachers is reported when the regression estimates suggest that teachers, all else equal, are paid less than other college graduates. A penalty appears as a negative number in Figure B. When teachers are paid relatively more, the number is positive and is referred to as a “premium.” Estimates are reported for all teachers (which includes a gender control), as well as separately for women and men.

Figure B

The main takeaway from Figure B is the nearly 30-year trend of relative teacher weekly wages increasingly falling behind those of other similarly qualified professionals. Pre-1994, the teacher wage gap averaged 8.7%, but the shortfall worsened considerably starting in the mid-1990s. The teaching penalty hit a record of 26.9% in 2024, which was slightly worse than the penalty recorded in 2023 (26.6%). Otherwise, on average, teachers earned 73.1 cents on the dollar in 2024, compared with what similar college graduates earned working in other professions—much less than the relative 93.9 cents on the dollar that teachers earned in 1996.

Separating the analysis by gender shows that in the pre-1994 period, the relative female teacher weekly wage (i.e., comparing female teachers with other female college graduates) was at a premium that averaged 3.3%. But starting in 1996, the female gap quickly went from parity to a penalty, landing at a 21.5% penalty in 2024.

My previous research (using decennial Census data) confirmed that, over a longer timeframe, the relative wage estimates for female teachers moved from significant premiums to large penalties. For example, I documented that relative female teacher earnings were at a 14.7% premium in 1960, which lessened to 10.4% in 1970 and to near parity in 1980 (pre-1979 years not shown in Figure B). Using the estimates from 2024, the cumulative change has been a 36.2 percentage-point deterioration in the relative wage of female teachers since 1960.10

There is an important story behind the declining relative wages experienced by female teachers. Historically, the teaching profession relied on a somewhat captive labor pool of educated women who had few employment opportunities. This is thankfully no longer the case, but increased opportunity costs are a part of the story and reflected in these results. Expanding opportunities for women enabled them to earn more as they entered occupations and professions from which they were once barred.

In fact, the simple average weekly wages (inflation-adjusted) of female teachers compared with their nonteaching counterparts grew in lock step from 1979 until they started to diverge in the late-1990s. They were close to parity in 1996, when other female college graduates earned just 0.7% more than female teachers. But this divide grew nearly every year—reaching 40.9% in 2024.

Conversely, the trends in the weekly wages of male teachers compared with other male college graduates were never at parity. But like their female counterparts, men also experienced a considerable increase in the pay gap—from 24.1% in 1996 to 81.7% in 2024.11 Therefore, the regression-adjusted relative wages of male teachers have seen sizable penalties throughout the timeframe of this paper (1979–2024) and in my earlier analyses using 1960, 1970, and 1980 decennial Census data. Over the long run, the male relative penalty worsened from 20.5% in 1960 to 36.3% in 2024.12

The growing male teacher penalty partly explains why approximately three in four teachers today are women—a ratio that has not changed much since 1960. The pay penalty experienced by male teachers is unfortunate given the recent statistics and reporting of boys struggling in school. Performing poorly in school is associated with problems encountered later in life—including addiction, mental and physical health issues, and involvement with the criminal justice system.13 Further, Thomas Dee (2010) found that a teacher’s gender has large effects on student test performance, teacher perceptions of students, and students’ engagement with academic material.

So, it is not surprising that today a much smaller share of educated women choose the teaching profession over expanding opportunities with better pay—even as three of four teachers are women. Moreover, the very large male teaching penalty that persists today goes a long way in explaining why men who may want to teach are compelled to choose other career paths, which are on average much more lucrative.

Relative teacher weekly wage penalties by state

Thus far I have reported that the relative teacher weekly wage penalty in the United States was 26.9% in 2024. But there is much variation across the country. To produce regression estimates by state, I pool six years (2019–2024) of CPS data to assure ample sample sizes for each state. Again, I compare public school teachers with nonteacher college graduates within each state and estimate regression-adjusted weekly wage gaps for each state and the District of Columbia.

Figure C

As in previous reports, Figure C shows that in no state does the relative (i.e., regression-adjusted) weekly wage for teachers equal or surpass that of their nonteaching college graduate counterparts. The results are sorted from the largest (38.5%) to the smallest (10.0%) penalties across the United States.

The teaching penalty was at least 25% in 20 states and at least 30% in nine states. In those nine states, teachers on average earn less than 70 cents on the dollar compared with similar college graduates in their respective states—ranging from 69.2 cents on the dollar in Kentucky to 61.5 cents in Colorado.

Figure D depicts a map of the state penalties reported in Figure C.

Figure D

Adding benefits to the analysis

In this section, I examine the teachers’ “benefits advantage” and how it impacts total compensation. The benefits advantage refers to the view that, on average in the U.S., teachers generally receive a larger share of their total compensation as benefits—such as health or other insurance and retirement plans—compared with other professionals. Keep in mind that a larger share of total compensation via benefits means a smaller wage share, given that total compensation is made up of these two components. Here, I calculate how the relatively more generous benefits package for teachers may partially offset the large teacher wage penalty.

The BLS Employer Costs for Employee Compensation (ECEC) series measures the average employer cost per employee hour worked for total compensation, wages and salaries, benefits, and costs as a share of total compensation. I compare benefits packages of primary, secondary, and special education public school teachers with those of comparable workers (specifically, workers in professional occupations).14 Table 1 shows a summary of my calculations.

Table 1

The first two columns in Table 1 under “W-2 wage share of compensation” report the share of W-2 wages that make up total compensation for professionals in all occupations and for state and local K–12 public school teachers. The shares of compensation for W-2 wages and benefits add up to 100. The W-2 shares allow for an examination of how important wages are relative to benefits in the total compensation package.

In 2024, W-2 wages made up 69.6% of teachers’ total compensation, while the share was 78.9% for nonteaching professionals. That means that for every dollar of teachers’ total compensation, 69.6 cents went to wages and 30.4 cents went to benefits. For nonteaching professionals, 78.9 cents went to wages and 21.0 cents went to benefits. Therefore, for every dollar of total compensation, public school teachers receive more in benefits than other professionals, but less in wages. I refer to this as the “benefits advantage.”15

The columns under “public school teachers” in Table 1 provide the information needed to assess total compensation on average for the United States. The “wage penalty” column reports the teacher wage penalty estimates from Figure B, followed by the benefits advantage calculation for teachers. Combining the two gives us a measure of how teachers compare with other professionals on total compensation, which is reported in the last column. Per usual, the benefits advantage for teachers partially offset their estimated relative wage disadvantage, but still left teachers with a significant total compensation gap of -17.1% in 2024—up slightly from -16.7% in 2023. This slight change was due to a 0.2 percentage point decrease in the teacher benefits advantage, and a 0.3 percentage point increase in the teacher wage penalty.

Over the last five years (2020–2024), the benefits advantage that favors teachers varied from 8.8% to 9.9%, but over the same timeframe the teacher wage penalty grew substantially. Thus, in 2024, the teacher total compensation gap widened to -17.1%—the largest on record. Of course, even if the teacher benefits advantage could exceed the large teacher wage penalty, the standard of living for teachers would likely fall, as they would have little in the way of earnings to make ends meet.

Final thoughts

The success of teachers and public education is critically important to students, their families, and communities. It is hard to think of a profession that is more consequential than teaching. After all, one of our highest ideals as a country is to educate each and every child regardless of means, and the future of the U.S. economy depends on this. The highest standard is still worth fighting for, even as we have repeatedly fallen short of the ideal.16

To that end, are teachers sufficiently supported and compensated in the U.S to retain current staff and recruit a pool of highly skilled college students into the profession? The trends documented in this series over the last three decades have no doubt already had profound consequences on teacher retention and recruitment as evidenced in research on teacher staffing challenges (Fortin and Fawcett 2023; NCES 2023), college students forgoing teaching careers citing pay as a main barrier (Croft, Guffy, and Vitale 2018), parents actively steering their children into professions that pay better than teaching (PDK 2019), fast-tracking credentials in response to shortages of permanent teachers (Povich 2023), the heavy use of unqualified teachers (Tamez-Robledo 2023; Lopez and Van Overschelde 2024), and the reliance of unqualified substitute teachers (Franco and Kemper Patrick 2023).

The quality of a public education greatly hinges on our efforts to sufficiently invest in our schools and teachers. This includes the public school workforce and its infrastructure along with all the essential wrap-around services. I have long asserted that providing teachers a standard of living commensurate with similar nonteacher professionals is not simply a matter of fairness. Teacher pay is a central issue in public education; it affects our ability to retain currently credentialed teachers, address teacher shortages, and ensure teaching remains an attractive career option for a large pool of highly qualified students.

Targeted and sustained investments in public education are needed to mitigate (let alone reverse) the growing teacher pay penalty. Funding efforts at the local and state levels, along with support from the federal government, are needed to improve teacher pay and compensation. Additionally, public-sector collective bargaining should be upheld and expanded, given the role of unions in advocating for improved job quality and better pay.

Regrettably, sustained and effective policy interventions capable of mitigating, much less substantially improving, the trends outlined in this long-running series have been lacking. This is a troublesome reality, especially in the United States—a country that has more than enough resources and wealth to be the envy of public education around the world.

Notes

Notes

1. See Allegretto, Corcoran, and Mishel 2004, 2008; Allegretto and Tojerow 2014; Allegretto and Mishel 2016, 2018, 2019; and Allegretto 2023 and 2024.

2. The teacher sample does not include kindergarten or pre-kindergarten; if included, the teacher pay penalties would even larger. 

3. See Blad 2024; Merod 2023; and Steiner, Woo, and Doan 2023.

4. For example, high quality teachers can increase test scores (see Rockoff 2004); students taught by highly effective teachers are more likely to attend college, earn higher salaries, and are less likely to have children as teenagers (see Chetty, Friedman, and Rockoff 2014); international evidence points to a positive association of teacher cognitive skills and student performance (see Hanushek, Piopiunik, and Wiederhold 2019).

5. Allegretto and Mishel 2019, Appendix A provides a comprehensive discussion of the data and methodologies that were used to produce our teacher weekly wage and total compensation estimates. 

6. In Allegretto and Mishel 2019, we provide evidence that teachers work weekly hours similar to those of other professionals.

7. Our earlier work documents that BLS’s imputation method overstates teacher earnings, which is not the case for the other college graduate sample (Allegretto, Corcoran, and Mishel 2008, 9).

8. For more about top-code adjustments, see Economic Policy Institute 2024b.

9. The wage model includes controls for both public and private school teachers. The weekly wage penalty estimates are based on the coefficient on the public school teacher indicator. Regression for all teachers includes a gender control. The percentage gap is calculated as (eb -1) x 100. See Allegretto and Mishel 2019, Appendix A, for specification details.

10. See Allegretto, Corcoran, and Mishel 2008 for 1960, 1970, and 1980 estimates using decennial censuses.

11. Not shown but available upon request from the author.

12. The 1960 results are not shown in Figure B. They can be found in Allegretto, Corcoran and Mishel 2008, 7.

13. See Abrams 2023.

14. The ECEC provides compensation data for a narrower category of “primary, secondary, and special education school teachers” and for a broader category of “teachers.” I analyze the narrower category, which closely matches the definition of teachers in the CPS-ORG data, using data limited to state and local public-sector workers. The inclusion of kindergarten and special education teachers in the benefits analysis does not produce any more substantial differences than if they were excluded (as they are in the CPS sample used to estimate the wage penalty). Greater methodological detail is provided in Appendix A of Allegretto and Mishel 2019.

15. My analysis accounts for differences in annual weeks worked, as it is based on the usual weekly wages of teachers and other college graduates, not hourly wages or annual earnings. One reason health and pension costs are higher for teachers is that teacher health benefits are provided for a full year, while teacher salaries are for less than a full year.

16. See Allegretto, Garcia, and Weiss 2022. This paper describes inequities in public education funding. We also argue that the federal government should play a larger role in funding public education.

References

Abrams, Zara. 2023. Boys Are Facing Key Challenges in School. Inside the Effort to Support Their Success. American Psychological Association, April 2023.

Allegretto, Sylvia A. 2023. The Teacher Pay Penalty Still Looms Large. Economic Policy Institute and the Center for Economic and Policy Research, September 2023.

Allegretto, Sylvia A. 2024. Teacher Pay Rises In 2023—But Not Enough to Shrink Pay Gap with Other College Graduates. Economic Policy Institute and the Center for Economic and Policy Research, September 2024.

Allegretto, Sylvia A., Sean P. Corcoran, and Lawrence Mishel. 2004. How Does Teacher Pay Compare? Methodological Challenges and Answers. Washington, D.C.: Economic Policy Institute.

Allegretto, Sylvia A., Sean P. Corcoran, and Lawrence Mishel. 2008. The Teaching Penalty: Teacher Pay Losing Ground. Washington, D.C.: Economic Policy Institute.

Allegretto, Sylvia A., Emma García, and Elaine Weiss. 2022. Public Education Funding in the U.S. Needs an Overhaul: How a Larger Federal Role Would Boost Equity and Shield Children from Disinvestment During Downturns. Economic Policy Institute, July 2022.

Allegretto, Sylvia A., and Lawrence Mishel. 2016. The Teacher Pay Gap Is Wider Than Ever: Teachers’ Pay Continues to Fall Further Behind Pay of Comparable Workers. Economic Policy Institute, August 2016.

Allegretto, Sylvia A., and Lawrence Mishel. 2018. The Teacher Pay Penalty Has Hit a New High: Trends in the Teacher Wage and Compensation Gaps Through 2017. Economic Policy Institute, September 2018.

Allegretto, Sylvia A., and Lawrence Mishel. 2019. The Teacher Weekly Wage Penalty Hit 21.4 Percent in 2018, a Record High. Economic Policy Institute, April 2019.

Allegretto, Sylvia A., and Ilan Tojerow. 2014. Teacher Staffing and Pay Differences: Public and Private Schools. Monthly Labor Review. U.S. Department of Labor, Bureau of Labor Statistics, September 2014.

Blad, Evie. 2024. Teachers Report Lower Pay, More Stress Than Workers in Other Fields. Education Week, June 19, 2024, sec. Teaching & Learning, Teaching Profession.

Bureau of Labor Statistics (BLS). 2024a. Current Population Survey.

Bureau of Labor Statistics (BLS). 2024b. Employer Costs for Employee Compensation Historical Listing: National Compensation Survey, data tables accessed July 11, 2024.

Chetty, Raj, John N. Friedman, and Jonah E. Rockoff. 2014. Measuring the Impacts of Teachers II: Teacher Value-Added and Student Outcomes in Adulthood. American Economic Review 104, no. 9 (September 2014): 2633–2679.

Croft, Michelle, Gretchen Guffy, and Dan Vitale. 2018. Encouraging More High School Students to Consider Teaching. ACT Research & Policy, June 2018.

Dee, Thomas S. 2010 The Why Chromosome. Education Next, January 26, 2010.

Economic Policy Institute (EPI). 2024a. Current Population Survey Extracts, Version 2025.7.10, https://microdata.epi.org. Accessed August 9, 2024.

Economic Policy Institute (EPI). 2024b. “Methodology: Wage Variables.” EPI Microdata Extracts documentation.

Fortin, Jacey, and Eliza Fawcett. 2023. How Bad Is the Teacher Shortage? Depends Where You Live. New York Times, August 29, 2023.

Franco, Marguerite, and Susan Kemper Patrick. 2023. State Teacher Shortages: Teaching Positions Left Vacant or Filled by Teachers Without Full Certification. Learning Policy Institute, July 2023.

Hanushek, Eric A., Marc Piopiunik, and Simon Wiederhold. 2019. Do Smarter Teachers Make Smarter Students? Education Next, February 20, 2019.

Lopez, Minda, and James P. Van Overschelde. 2024. Unlicensed Teachers Now Dominate New Teacher Hires in Rural Texas Schools. The Dallas Observer, June 20, 2024.

Merod, Anna. 2023. Low Pay, Long Hours Top Reasons Teachers Consider Leaving. K-12 Dive, September 12, 2023.

National Center for Education Statistics (NCES). 2023. Most Public Schools Face Challenges in Hiring Teachers and Other Personnel Entering the 2023-24 Academic Year. October 2023.

Phi Delta Kappan (PDK). 2019. Teaching: Respect but Dwindling Appeal. The 50th Annual PDK Poll of the Public’s Attitudes Toward the Public Schools. Supplement to Kappan magazine.

Povich, Elaine S. 2023. Plagued By Teacher Shortages, Some States Turn to Fast-Track Credentialing. Stateline, July 24, 2023.

Rockoff, Jonah E. 2004. The Impact of Individual Teachers on Student Achievement: Evidence from Panel Data. American Economic Review 94, no. 2; 247–52. May 2004.

Steiner, Elizabeth D., Ashley Woo, and Sy Doan. 2023. All Work and No Pay — Teachers’ Perceptions of Their Pay and Hours Worked: Findings from the 2023 State of the American Teacher Survey. RAND Corporation, September 12, 2023.

Tamez-Robledo, Nadia. 2023. These States Have the Most ‘Underqualified’ Teachers Stepping in to Fill Open Positions. EdSurge, April 4, 2023.

While some states managed to expand education spending in the ensuing recovery, many states did not, and in some cases, their education spending relative to their capacity to spend on education, is actually lower than it was before the Great Recession. This is especially the case in the South, where public education spending is declining in real terms (adjusted for inflation), even as Southern states grow more prosperous.

One way to get a sense of how effectively states are investing in education is to examine the ratio of per-pupil education expenditures to GDP per capita. We use per-pupil spending and per capita GDP to reflect the fact that public education spending depends on the growth of the share of school-age children (ages 5–18), but also on broader economic growth. Essentially, as the broader economy grows (particularly through productivity growth), public education spending must match this growth to continue to attract resources of consistent quality and quantity.

The clearest example to illustrate this dynamic is teacher salaries. To keep a high-quality pool of potential teachers, it is not enough for teacher salaries to rise with inflation, they must also rise enough to keep pace with other highly educated workers. If teachers’ pay does lag relative to that of other professions of highly educated workers, the supply of willing, high-quality teachers will shrink, and children’s education will suffer. If the ratio of per-pupil spending to per capita GDP is falling over time, then society’s educational investment effort can be said to be lagging, and we are not spending enough to keep a consistent quality and quantity of resources available for educating kids. 

Figure A shows the change in the ratio of per-pupil spending to per capita GDP between 2007 and 2019. We end in 2019 to avoid changes related to the pandemic. A positive change means that education spending grew as a share of GDP, indicating that states are spending a larger share of their economic capacity on education funding.

Figure A

A majority of states have seen declining education expenditures relative to their state capacity. Many of those are in the South and Midwest, while many of the states with increasing expenditures relative to state capacity are in the Northwest and West. Moreover, the range of state spending on expenditures increased over time. In 2007, the difference between the state that spent the most on education and the state that spent the least, relative to GDP, was 0.24 percentage points. In 2019, the difference was up to 0.27 percentage points.

Eight states—Alabama, Arizona, Florida, Georgia, Idaho, Indiana, Nevada. and North Carolina—saw their real per-pupil education expenditures decline even while their per capita GDP went up. These eight states had the capacity to expand educational opportunities for their state’s children but have gone in the opposite direction instead.

It should not be a surprise that five of those eight states are in the South. As EPI has documented extensively in its Rooted in Racism series, Southern states have drastically disinvested in public services across the board, so that even while those states are seeing growing prosperity on paper, that prosperity is not being used to make life better for working families.

As states adjust to the end of the pandemic-era boost in federal education funding, which masked declines in state funding, they should evaluate their education spending and ensure that it is keeping up with their prosperity. States that invest in education not only support their students, who will be future workers, but are also likely to be states with higher productivity. States with falling rates of investment effort (spending as a share of GDP) should devote more resources to ensure that all children have access to an excellent public education.

There are two key problems in the teacher labor market. Since at least 2018, and especially since the onset of the COVID-19 crisis, labor market data has clearly signaled a textbook labor shortage for public school teachers. Closing this shortage and attracting—and retaining—enough teachers to fill currently vacant positions should be a high priority for policymakers at all levels of government. To accomplish this, the obvious strategy is to increase the attractiveness of teaching jobs—both through higher compensation for teachers, but also via investments that make teaching easier and more rewarding.

But even closing the current mismatch between vacancies and hiring in teacher labor markets would not imply a socially optimal level of investment in the teacher labor force or public education more broadly. Shortages occur when supply lags demand. And demand for teachers is driven by policymakers’ decisions about how much society should invest in education for kids. If this demand is low, hiring enough teachers to meet it is easy, but it does not address the underinvestment in public education.

This post focuses on the first problem: Today’s labor markets clearly show the supply of willing teachers is lagging demand. It documents the shortage and highlights solutions. A forthcoming post will focus on the second problem: Demand for teachers and other educational inputs is a political decision, and we have long stinted on this investment. There is no market system that ensures society is spending sufficiently on education and hence that demand for teachers is truly healthy relative to unmet social needs.

Some good news: Education employment has recovered since COVID-19 recession

The COVID-19 pandemic and the ensuing transition to remote learning reduced employment not just for teachers, but also for school bus drivers, cafeteria staff, special education professionals, and English language learning instructors, among others. Figure A shows employment changes since the start of the pandemic in the private sector (the dark blue line) and in state and local government education (lighter two blue lines). K–12 teachers comprise 45% of local education and post-secondary (college) teachers comprise 30% of state education, making these industries good proxies for teacher labor markets. At the beginning of the COVID-19 recession, both the public education sector and the private sector saw enormous job losses, but this was more pronounced in the private sector. 

Figure A

However, employment in the private sector bounced back to pre-recession levels much quicker than in state and local government: By April 2022, private-sector employment growth had rebounded back to pre-COVID-recession levels, whereas state and local government education were still 7% and 4%, respectively, below pre-recession levels. It wasn’t until October 2023 that employment in local government education finally caught up to pre-recession levels and not until February 2024 that employment in state government education caught up. Today, employment in these sectors is about 1% above where it was in February 2020.

If we use state and local government education employment in February 2020 as a benchmark, one might conclude that the teacher shortage has been resolved. And this employment bounce-back was no small feat: The COVID-19 pandemic exacerbated teaching difficulties and increased political polarization of the classroom. And many teachers reported additional stress during this period. Districts utilized their Elementary and Secondary School Emergency Relief funds to staff up in the wake of the pandemic—choices that clearly worked (see other examples here and here). Hiring enough teachers to get back to the February 2020 pre-COVID-19 benchmark should be celebrated. But it’s not the end of the story.

Despite gains at the national level, disparities in teaching labor markets remain

The overall measure of employment used in Figure A obscures the unevenness of the recovery from the COVID-19 pandemic, as some schools recovered much faster than others. Disparities in schools being able to fill education positions persist and some positions remain harder to fill than others. Figure B shows the share of schools that reported feeling understaffed entering the August 2023 school year using a survey of nearly 4,000 public schools. The figure reveals that lower-poverty, majority-white schools are less likely to report feeling understaffed than high-poverty schools or schools with majority students of color. Only 42% of low-poverty schools reported feeling understaffed, compared with 57% of higher-poverty schools. Similarly, only 41% of schools that were less than 25% minority said they felt understaffed, compared with 49% of schools comprised of students that were 75% or more minority.

Figure B

The overall progress on the education shortages also varies by position type. A survey that scraped recent job postings in the state of Washington found that elementary education teacher positions got filled nearly twice as quickly as special education, English as a second language, and STEM positions. 

Despite recovered employment levels, a textbook teaching shortage remains

Even before COVID-19 destabilized education, the education labor market had long been characterized by indicators of chronic shortages. In the years leading up to the pandemic, the teacher labor market saw high job vacancy and quits rates and stagnant hires. Figure C provides historical context on job flows in state and local government education from 2001 to present. The figure shows that hires roughly kept pace with job openings until early 2018, when job openings started outpacing hires. Teachers were already growing less willing to accept teaching jobs and their associated compensation rates and working conditions in the period leading up to the COVID-19 pandemic.

Figure C

The slow hiring of new teachers might be less damaging if the teachers that were hired stayed in their role for a long time. However, in the lead up to the COVID-19 pandemic, the quits rate also steadily rose from 0.60 in January 2013 to 0.83 in February 2020. Even before the pandemic, teachers were leaving the profession at high rates. Today, the quits rate remains elevated and job openings still outpace hires. One sign of positivity is that the vacancy rate is trending down faster than the hires rate, suggesting that progress is being made in matching teacher demand and supply. But an overall historical and current picture shows a pronounced teaching shortage that existed well before the COVID-19 pandemic.

Conclusion and policy advice

Teacher shortages existed in the lead up to COVID-19. These shortages were exacerbated in the wake of the pandemic as the attractiveness of teaching—both in terms of relative pay and work conditions—plummeted relative to many other jobs held by similarly educated workers. Today’s labor market for teachers is characterized by an excess of openings relative to hires and a rising quits rate (and one that is historically high for the profession).

One of the biggest contributing factors to teacher shortages is low teacher compensation. As of 2023, teachers were paid 26.6% less than workers with similar education credentials. Improving teacher pay would not only draw more eligible candidates into applying for jobs but would also help retain teachers longer and improve the quality of the teacher workforce—a key component influencing student achievement. 

Normally, labor shortages are resolved by market competition pushing up wages. But because this isn’t the type of labor market for education, it won’t happen for teachers. In education, teacher pay is not set in a perfectly competitive labor market where employers are private, profit-seeking entities. The labor shortage will only be solved by policymakers affirmatively deciding to raise the pay of the nation’s public school teachers and undertake investments that help children’s education and make the job of teaching them in our public schools easier and more rewarding.

The impact of a national teaching shortage is profound and will impact students for year to come. Teaching shortages lead to larger class sizes, stressed and over-burdened teachers, and financial strain on the education system. Teaching quality will be threatened and education disparities will harden, with students in high-poverty districts losing out the most.

Data and relevant information

In analyzing differences in pay between public school teachers and other college graduates, I use two sources of data, both from the Bureau of Labor Statistics (BLS).2 First, I use Current Population Survey Outgoing Rotation Groups (CPS-ORG) data for the weekly wage analyses (BLS 2024a). I focus on weekly wages, as opposed to weekly hours worked or the length of the work year, to account for the “summers off” issue that affects teachers but not other college graduates.3 The sample is restricted to full-time workers (working at least 35 hours per week) aged between 18 and 64, with at least a bachelor’s degree, because teachers today need at least a bachelor’s degree to teach. The sample is further limited to those who reported their wage information directly (those who didn’t respond and whose wages were estimated by BLS are excluded).4 To preserve data confidentiality, the BLS records weekly wages only up to a defined threshold, so the wage amounts above this threshold aren’t specifically identifiable in the data. This is called top-coding. The threshold, however, is rarely undated. As a result, a growing share of workers are assigned top-coded wages that are below their actual wages, which has generated a growing understatement of college graduate wages relative to those of teachers. EPI replaces original top-coded values with Pareto-distribution implied means above the CPS top-code for men and women.5

I use a second data source to assess benefits: the BLS National Compensation Survey’s Employer Costs for Employee Compensation series (ECEC 2024a). Specifically, I pull data on employer costs per hour worked for detailed categories of compensation for “primary, secondary, and special education school teachers” in the public sector, and the same data for “civilian professionals,” which is the broadest category available that largely corresponds to college graduates. “Benefits,” in my analysis, refer to employer costs for health and life insurance, retirement plans, and payroll taxes (covering Social Security, unemployment insurance, and workers’ compensation).

The remaining components of compensation are “W-2 wages,” a measure that corresponds to the wages captured in the CPS data used above. W-2 wages are the wages reported to employees and to the Internal Revenue Service. They include “direct wages”—defined by the BLS as “regular payments from the employer to the employee as compensation for straight-time hourly work, or for any salaried work performed”—and other wage items, including “supplemental pay.” Supplemental pay includes premium pay for overtime, bonus pay, profit-sharing, and paid leave.

Findings

I present the results of my research in four sections. I first show the trends in the simple (not regression-adjusted) average weekly wages for public school teachers and other college graduates from 1979 through 2022 (adjusted for inflation). Second, I report annual estimates of the national teacher weekly wage gap using standard regression techniques to control for systematic differences in age, education, state of residence, and other factors known to affect wage rates. Third, I present regression-adjusted estimates of the teacher wage gap for each state and the District of Columbia. Lastly, nonwage benefits are factored in to estimate a total compensation penalty that accounts for the estimated teacher wage penalty, along with the teacher “benefits advantage,” to estimate a total compensation differential at the national level (which is not possible to calculate for each state).

Simple level differences: weekly wage trends

I start by showing the level of average weekly wages of public school teachers and other college graduates in Figure A. These data are national annual averages adjusted only for inflation (i.e., not regression-adjusted). For there to be real improvements in living standards for teachers, nominal increases in pay would need to exceed the rate of inflation—in other words, the inflation-adjusted trends in Figure A would have to be increasing.

Figure A

As shown in Figure A, inflation-adjusted teacher wages were relatively flat from 1996 through 2021, indicating that teacher wages, on average, were just keeping up with the rate of inflation. This was also the case for the wages of other college graduates but for a shorter time span (2002–2014), after which real increases ensued.

Figure A shows that there was a small increase in teachers weekly wages of 1.7% ($24.00) in 2023, but it was nowhere near enough to undo the 8.8% decline that occurred in 2022—leaving the series near its post-1996 low point. From 1996 through 2023, teacher wages fell by 5.1%, mostly due to the steep decline in teacher weekly wages in 2022. Conversely, the wages of other college graduates increased 30.0% over that timeframe; their wages increased significantly from 2014 onwards and experienced a slight decline in 2022. 

Addressing the long-term stagnation of teacher wages requires that future increases in pay exceed future rates of inflation to recover the big loss in wages that occurred in 2022. Local and state politicians, community leaders, and the public can help by highlighting the severity of the issue in their communities. Meaningfully boosting teacher pay requires a concerted effort by local and state governments—with support from the federal government—to pass the right policies.

Relative differences: regression-adjusted trends

The weekly wages discussed above are simple averages (not regression-adjusted) for teachers and other college graduates. However, the two groups may differ fundamentally in ways that typically affect pay on margins—such as age, educational attainment, race/ethnicity, and state of residence. For instance, all else being equal, one would expect experienced workers to earn more than younger workers who are just starting out in their careers. Controlling for age within a regression model therefore accounts for such differences across the two samples. Thus, I use standard regression techniques to estimate weekly wages of public school teachers relative to other similarly situated college graduates working in other professions, which can provide a more apples-to-apples comparison of earnings.6 I report regression-adjusted estimates for all teachers (which includes a gender control), as well as separately for women and men. 

Results presented in Figure B show how much less (or more) teachers earn in weekly wages relative to other college graduates, estimated via regression analysis. A weekly wage “penalty” for teachers is reported when the regression estimates suggest that teachers, all else equal, are paid less than other college graduates. A penalty appears as a negative number in Figure B. When teachers are paid relatively more, the number is positive and is referred to as a “premium.”

Figure B

Starting in 1979 and throughout this series, relative weekly wages for all teachers have lagged behind those of other similarly qualified professionals (middle line Figure B). Pre-1994, the teacher wage gap averaged 8.7%, but the shortfall worsened considerably starting in the mid-1990s. The teaching penalty hit a record of 26.6% in 2023, which was slightly worse than the penalty recorded in 2022 (26.4%). Otherwise, on average, teachers earned 73.4 cents on the dollar in 2023, compared with what similar college graduates earned working in other professions—much less than the relative 93.9 cents on the dollar that teachers earned in 1996.

As shown in Figure B, the relative female teacher wage, compared with other female professionals, was at a premium that averaged 3.3% in the pre-1994 period. But starting in 1996, the female wage gap quickly went from parity to a penalty, landing at a 21.4% penalty in 2023, slightly worse than the 21.3% gap estimated in 2022.

My previous research (using decennial Census data) confirmed that, over a longer timeframe, the relative wage estimates for female teachers moved from significant premiums to large penalties. For example, I documented that relative female teacher earnings were at a 14.7% premium in 1960, which lessened to 10.4% in 1970 and to near parity in 1980 (pre-1979 years not shown in Figure B). Using the estimates from 2023, the cumulative change has been a 36.1 percentage-point deterioration in the relative wage of female teachers since 1960.7

There is an important story behind the declining relative wages of female teachers. Historically, the teaching profession relied on a somewhat captive labor pool of educated women who had few employment opportunities. This is thankfully no longer the case, but increased opportunity costs are a part of the story and reflected in much of this research. Expanding opportunities enabled women to earn more as they entered occupations and professions from which they were once barred. Today, a much smaller share of educated women chooses the teaching profession over expanding opportunities with better pay. Simply maintaining the quality of the current labor market pool for teachers will require significant raises in real teachers’ pay to compete with other professions for female workers. Otherwise, the quality of education will be compromised.

The relative wages of male teachers have seen sizable penalties throughout the timeframe of this paper (1979–2023) and my analyses using 1960, 1970, and 1980 decennial Census data. Over the long run, the male penalty worsened from 20.5% in 1960 (not shown in Figure B) to 36.3% in 2023. The very large male teaching penalty that persists today goes a long way in explaining why men who may want to teach may be compelled to choose other career paths, which are on average much more lucrative. The large male teacher penalty partly explains why approximately three in four teachers are women—a ratio that has not changed much since 1960.

Relative teacher weekly wage penalties by state

I have reported that the overall teacher weekly wage penalty was 26.6% in 2023. But there is much variation across states. To produce regression estimates by state, I pool six years (2018–2023) of CPS data to assure ample sample sizes for each state. Again, I compare public school teachers with nonteacher college graduates within each state and estimate regression-adjusted weekly wage gaps for each state and the District of Columbia.

Figure C

As in previous reports, Figure C shows that in no state does the relative (regression-adjusted) weekly wage for teachers equal or surpass that of their nonteaching college graduate counterparts. The bars are sorted from the largest (38.4%) to the smallest (9.0%) penalties across the US.

There are seven states where teachers, on average, earn less than 70 cents on the dollar compared with similar college graduates in their respective states. The states with the largest penalties are Colorado (38.4%), Arizona (32.9%), Virginia (32.0%), Oklahoma (31.8%), New Hampshire (31.6%), Minnesota (31.0%), and Alabama (31.0%). Unsurprisingly, the first four states listed had huge walkouts in response to low pay and public education funding in 2018–2019.8

Figure D is a map presentation of the state penalties reported in Figure C.

Figure D

Adding benefits to the analysis

The weekly wages analyzed to this point make up a significant part of compensation, but to capture the total compensation of teachers and nonteaching professionals, I add in other benefits of employment, such as health and other insurance, and retirement plans. Teachers generally receive a higher share of their compensation as benefits compared with other professionals, partially offsetting the weekly wage penalty. In this section, I examine teachers’ “benefits advantage” and how it impacts relative total compensation.

The BLS Employer Costs for Employee Compensation (ECEC) series measures the average employer cost per employee hour worked for total compensation, wages and salaries, benefits, and costs as a share of total compensation. I compare benefits packages of primary, secondary, and special education public school teachers with those of comparable workers (specifically, workers in professional occupations).9 Table 1 shows a summary of my calculations.

Table 1

The first two columns in Table 1 under “W-2 wage share of compensation” report the share of W-2 wages that make up total compensation for professionals in all occupations and for state and local K–12 public school teachers. The shares of compensation for W-2 wages and benefits add up to 100. The W-2 shares allow for an examination of how important wages are relative to benefits in the total compensation package.

In 2023, W-2 wages made up 69.6% of teachers’ total compensation, whereas the share was 79.0% for nonteaching professionals. That means that for every dollar of teachers’ total compensation, 69.6 cents went to wages and 30.4 cents went to benefits. For professionals, 79.0 cents went to wages and 21.0 cents went to benefits. Therefore, for every dollar of total compensation, public school teachers receive more in benefits than other professionals. I refer to this as the “benefits advantage.”10

The columns under “public school teachers” in Table 1 provide the information needed to assess total compensation on average for the United States. The “wage penalty” column reports the teacher wage penalty estimates from Figure B, followed by the benefits advantage calculation for teachers. Combining the two gives us a measure of how teachers compare to other professionals on total compensation, which is reported in the last column. Per usual, the benefits advantage for teachers partially offsets their estimated relative wage disadvantage, but still left teachers with a significant total compensation gap of 16.7% in 2023, which is close to the 17.0% calculated in 2022. This slight improvement was due to a 0.5 percentage point change in the teacher benefits advantage, and a 0.2 percentage point change in the wage penalty.

The benefits advantage that favors teachers has grown considerably over the timeframe of study: It went from 2.4% in 1993 to 9.9% in 2023. However, the growing benefits advantage was not nearly enough to offset the much larger growth in the teacher wage penalty that grew from 2.7% to 26.6% over the same timeframe.

Final thoughts

Are teachers sufficiently compensated in the U.S. to retain current staff and recruit a pool of highly skilled college students into the profession? Not by a long shot. The trends this series has documented over the last two decades have no doubt had profound consequences on teacher retention and recruitment. Research related to the issues presented in this report has expanded considerably and grapples with the challenges facing public education and the teaching profession in the United States. This includes research on teacher staffing challenges (Fortin and Fawcett 2023; NCES 2023); college students forgoing teaching careers citing pay as a main barrier (Croft, Guffy, and Vitale 2018); parents actively steering their children into professions that pay better than teaching (PDK 2019); fast-tracking credentials in response to shortages of permanent teachers (Povich 2023); the heavy use of unqualified teachers (Tamez-Robledo 2023; Lopez and Van Overschelde 2024); and unqualified substitute teachers (Franco and Kemper Patrick 2023).

It is hard to think of a more consequential profession than teaching. Teachers have the future of the country in front of them daily. The quality of a public education greatly hinges on our efforts to take care of the teaching workforce and sufficiently fund schools. Too often and in too many places, we are failing to attain one of our highest ideals as a nation: our promise to educate every child without regard to means. This is a question of political will, with profound implications for our children, their families and communities, and the future of our nation.

About the author

Sylvia A. Allegretto is a senior economist at the Center for Economic and Policy Research and a research associate at the Economic Policy Institute. She worked for 15 years at the Institute for Research on Labor and Employment at the University of California, Berkeley, where she co-founded the Center on Wage and Employment Dynamics (CWED). CWED’s body of work on wage floors has been highly influential in academia and policy circles. Allegretto co-authored two editions of The State of Working America while at EPI and continues her work on teacher compensation, public education, and labor markets. Dr. Allegretto provides frequent commentary on economic trends. She has a Ph.D. in economics from the University of Colorado, Boulder.

Notes

1. See How Does Teacher Pay Compare (Allegretto, Corcoran, and Mishel 2004); The Teacher Penalty (Allegretto, Corcoran, and Mishel 2008); and the following issue briefs and reports in the series: Allegretto, Corcoran, and Mishel (2011); Allegretto and Tojerow (2014); Allegretto and Mishel (2016, 2018, and 2019); and Allegretto (2022 and 2023).

2. Allegretto and Mishel (2019, Appendix A) provides a comprehensive discussion of the data and methodologies that were used to produce our teacher weekly wage and total compensation estimates. 

3. In Allegretto and Mishel (2019), we provide evidence that teachers work weekly hours similar to those of other professionals.

4. Our earlier work documents how the BLS imputation method overstates teacher earnings, which is not the case for the other college graduate sample (Allegretto, Corcoran, and Mishel 2008, 9).

5. For more about top-code adjustments, see Economic Policy Institute (2024b).

6. The wage model includes controls for both public and private school teachers. The weekly wage penalty estimates are based on the coefficient on the public school teacher indicator. Regression for all teachers includes a gender control. See Allegretto and Mishel (2019, Appendix A), for specification details.

7. See Allegretto, Corcoran, and Mishel (2008) for 1960, 1970, and 1980 estimates using decennial Census data.

8. Keep in mind that state estimates reported in this paper use pooled 2018–2023 CPS data, while the state results reported in the previous paper (Allegretto 2023) used pooled 2017–2022 CPS data. Thus, there is significant overlap of data.

9. The ECEC provides compensation data for a narrower category of “primary, secondary, and special education school teachers” and for a broader category of “teachers.” I analyze the narrower category, which closely matches the definition of teachers in the CPS-ORG data, using data limited to state and local public-sector workers. The inclusion of kindergarten and special education teachers in the benefits analysis does not produce any more substantial differences than if they were excluded (as they are in the CPS sample used to estimate the wage penalty). Greater methodological detail is provided in Appendix A of Allegretto and Mishel (2019).

10. My analysis accounts for differences in annual weeks worked, as it is based on the usual weekly wages of teachers and other college graduates, not hourly wages or annual earnings. One reason health and pension costs are higher for teachers is that teacher health benefits are provided for a full year, while teacher salaries are for less than a full year.

References

Allegretto, Sylvia A. 2022. The Teacher Pay Penalty Has Hit a New High. Economic Policy Institute, August 2022.

Allegretto, Sylvia A. 2023. The Teacher Pay Penalty Still Looms Large. Economic Policy Institute, September 2023.

Allegretto, Sylvia A., Sean P. Corcoran, and Lawrence Mishel. 2004. How Does Teacher Pay Compare? Methodological Challenges and Answers. Washington, D.C.: Economic Policy Institute.

Allegretto, Sylvia A., Sean P. Corcoran, and Lawrence Mishel. 2008. The Teaching Penalty: Teacher Pay Losing Ground. Washington, D.C.: Economic Policy Institute.

Allegretto, Sylvia A., Sean P. Corcoran, and Lawrence Mishel. 2011. The Teaching Penalty: An Update Through 2010. Economic Policy Institute, March 2011.

Allegretto, Sylvia A., Emma García, and Elaine Weiss. 2022. Public Education Funding in the U.S. Needs an Overhaul: How a Larger Federal Role Would Boost Equity and Shield Children from Disinvestment During Downturns. Economic Policy Institute, July 2022.

Allegretto, Sylvia A., and Lawrence Mishel. 2016. The Teacher Pay Gap Is Wider Than Ever: Teachers’ Pay Continues to Fall Further Behind Pay of Comparable Workers. Economic Policy Institute, August 2016.

Allegretto, Sylvia A., and Lawrence Mishel. 2018. The Teacher Pay Penalty Has Hit a New High: Trends in the Teacher Wage and Compensation Gaps Through 2017. Economic Policy Institute, September 2018.

Allegretto, Sylvia A., and Lawrence Mishel. 2019. The Teacher Weekly Wage Penalty Hit 21.4 Percent in 2018, a Record High. Economic Policy Institute, April 2019.

Allegretto, Sylvia A., and Ilan Tojerow. 2014. “Teacher Staffing and Pay Differences: Public and Private Schools.” Monthly Labor Review (U.S. Department of Labor, Bureau of Labor Statistics), September 2014.

Bureau of Labor Statistics (BLS). 2024a. Current Population Survey.

Bureau of Labor Statistics (BLS). 2024b. Employer Costs for Employee Compensation Historical Listing: National Compensation Survey, data tables accessed July 11, 2024.

Croft, Michelle, Gretchen Guffy, and Dan Vitale. 2018. Encouraging More High School Students to Consider Teaching. ACT Research & Policy, June 2018.

Economic Policy Institute (EPI). 2024a. Current Population Survey Extracts, Version 1.0.53, https://microdata.epi.org. Accessed July 1, 2024.

Economic Policy Institute (EPI). 2024b. “Methodology: Wage Variables.” EPI Microdata Extracts documentation.

Fortin, Jacey, and Eliza Fawcett. 2023. “How Bad Is the Teacher Shortage? Depends Where You Live.” New York Times, August 29, 2023.

Franco, Marguerite, and Susan Kemper Patrick. 2023. State Teacher Shortages: Teaching Positions Left Vacant or Filled by Teachers Without Full Certification. Learning Policy Institute, July 2023.

Lopez, Minda, and James P. Van Overschelde. 2024. “Unlicensed Teachers Now Dominate New Teacher Hires in Rural Texas Schools.” The Conversation (Texas State University), May 6, 2024.

National Center for Education Statistics (NCES). 2023. Most Public Schools Face Challenges in Hiring Teachers and Other Personnel Entering the 2023–24 Academic Year. October 2023.

Phi Delta Kappan (PDK). 2018. Teaching: Respect but Dwindling Appeal. The 50th Annual PDK Poll of the Public’s Attitudes Toward the Public Schools. Supplement to Kappan magazine.

Povich, Elaine S. 2023. “Plagued By Teacher Shortages, Some States Turn to Fast-Track Credentialing.” Stateline, July 24, 2023.

Tamez-Robledo, Nadia. 2023. “These States Have the Most ‘Underqualified’ Teachers Stepping in to Fill Open Positions.” EdSurge, April 4, 2023.

In this report we consider how the absence of collective bargaining rights contributes to long-standing gaps between what state and local government workers and similarly educated private-sector workers are paid, and how expanding collective bargaining rights can help address these gaps. To that end, this report examines how public-sector workers in states with limited or no collective bargaining rights fare compared with public-sector workers in states with well-established collective bargaining rights.

To do so, we estimate pay differences between state and local government workers and private-sector workers with similar education and experience in the four years before the pandemic and the four years since the pandemic’s onset. The analysis throughout this report focuses on state and local government workers and excludes federal employees, whose collective bargaining rights are set forth in the Federal Service Labor-Management Relations Statute (CRS 2014) and whose pay is set by Congress. 

Nationally, the public-sector pay gap has widened over the past four years, especially for workers with a bachelor’s or advanced degree—the majority of public-sector workers. Although public-sector workers have more generous benefits, these benefits do not make up for the lower wages and salaries for most workers.

The right to bargain collectively over pay is associated with higher union membership. This report shows that collective bargaining rights and union strength help government workers narrow the pay gap with private-sector workers. We show that pay gaps for government workers are significantly wider in states with weak or nonexistent bargaining rights.

In recent years, some states—including Colorado, Maryland, Michigan, Nevada, New Mexico, and Virginia—have taken important steps to establish, restore, or expand collective bargaining rights for some public employees. But in far more states over the past decade, public-sector workers’ collective bargaining rights have been diminished amid persistent state legislative attacks on public employees and their unions.

Addressing the public-sector pay gap is particularly important at a moment when state and local governments face staffing shortages and serious challenges to recruiting and retaining qualified employees. Low pay is a key factor driving the staffing crisis facing schools and other units of state and local government (MissionSquare Research Institute 2023; Cooper and Martinez Hickey 2022; Martinez Hickey and Cooper 2023).

Low pay for public-sector workers disproportionately affects women and Black workers, who are more likely to be employed in government jobs. Since these workers are also disadvantaged in the broader labor market, strengthening collective bargaining rights for government workers reduces racial and gender inequality in the labor force and potentially attracts more Hispanic, Asian American and Pacific Islander (AAPI), and other underrepresented workers to public-sector jobs.

Data and methodology

The analysis focuses on full-time wage and salary workers (those working 35 or more hours per week), ages 18–64, who are employed by state or local governments or the private sector, including workers employed by private nonprofits. Differences reported in the tables may or may not be statistically significant, but those highlighted in the text are significant at the 0.05 level unless otherwise noted.

Statistics about the demographics of the public- and private-sector workforce are based on the authors’ analysis of microdata from the U.S. Census Bureau’s Current Population Survey (CPS) in the four years since the onset of the COVID-19 pandemic, specifically March 2020 to February 2024 (Flood et al. 2020).

The pay analyses use “Outgoing Rotation Group” subsamples from the same survey; these subsamples include information on weekly pay and hours worked (Flood et al. 2020 merged with EPI 2024). Pay analyses compare the four-year period before the pandemic (March 2016 to February 2020) with the pandemic and post-pandemic period (March 2020 to February 2024). Statistics on employer benefits are from U.S. Bureau of Labor Statistics (BLS) Employer Costs for Employee Compensation tables (BLS-ECEC 2020–2023).

To assess public-sector collective bargaining rights by state and occupation group, we consulted the following sources:

• National Bureau of Economic Research (NBER) Public Sector Collective Bargaining Law Data Set (Valletta and Freeman 1988) and updates by Rueben (1996) and Dippel and Sauers (2019)
• Sanes and Schmitt 2014
• Frandsen and Webb 2017
• National Council on Teacher Quality (NCTQ) 2019
• Han 2019
• Brannick 2019
• National Education Association (NEA) 2020
• American Federation of State, County, and Municipal Employees (AFSCME n.d.), cited in McNicholas et al. 2020
• Commonwealth Foundation 2021
• García and Han 2021
• Brannick and Holman 2022
• New Mexico Public Employee Labor Relations Board 2023
• National Council of State Legislatures (NCSL) n.d.
• International Association of Fire Fighters (IAFF) n.d

These secondary sources do not always agree because they use different criteria, cover different groups of workers or years, rely on different primary sources, or differ for unexplained reasons. Where sources’ assessments of collective bargaining rights conflict, statutory language and case law cited in these sources were also consulted.

More information on data and methodology is provided in the methodology appendix.

Who are government workers?

Occupations. The largest occupational groups in local government are teachers, police, and firefighters. However, these three groups together do not constitute a majority of local government workers. Local government workers are employed in a wide variety of occupations in education; public safety, courts, and corrections; child care, health care, and social services; transportation, public utilities, and sanitation; parks and recreation; housing and environmental protection; libraries and cultural institutions; and legislative bodies and executive offices.

State government workers also work in a wide variety of occupations, including education; public safety, courts, and corrections; health care and social services; economic programs; legislative bodies and executive offices; environmental protection; and highway and other construction and maintenance.1

Education. Government workers are highly educated: 62.1% have a bachelor’s degree or higher, with half of these (31.4%) having an advanced degree. In contrast, only 40.7% of private-sector workers have a bachelor’s degree or higher, with only 13.7% having an advanced degree (Table 1).

Table 1

Race and ethnicity. White and Black workers are more likely to work in state and local government than Hispanic and AAPI/other workers (Table 2). Black workers are overrepresented in the public sector despite being less likely to have the bachelor’s or advanced degrees required for many public-sector jobs. The relative scarcity of Hispanic and AAPI workers partly reflects age differences since public-sector workers tend to be somewhat older and have more work experience than private-sector workers, whereas the Hispanic and AAPI populations tend to be younger. Hispanic workers’ underrepresentation also reflects disparities in educational attainment. Hispanic workers with bachelor’s degrees are not underrepresented in government jobs (not shown in tables). Hispanic workers are paid less in both sectors, but the Hispanic pay gap is narrower in the public sector (Table 3).

Table 2

Public-sector jobs are rungs to the middle class for Black workers, who often face labor market discrimination, especially in the private sector where employers may be less likely to follow standardized hiring and promotion practices. Though Black workers are paid less than similarly qualified white workers in both sectors, the Black pay gap in the public sector is much narrower than in the private sector (Table 3).

Table 3

In addition to seeking greater protection against discrimination, Black workers may be drawn to public-sector jobs because they provide more secure pensions and other benefits. These benefits are especially valuable to Black workers because discriminatory policies and practices have historically relegated Black workers to jobs that lack secure benefits, prevented Black families from accumulating home equity, and generally hindered Black workers from achieving financial security and transferring wealth to younger generations (Rothstein 2017).

Gender. Women are more likely to be employed in government jobs than men, especially in teaching. Over half (58.8%) of full-time public-sector workers are women, whereas only 43.3% of full-time private-sector workers are women (Table 2).

Women in government jobs are concentrated in certain occupations. Over three-quarters (77.4%) of public school teachers and teaching assistants are women, but women account for only 12.2% of police and firefighters.

Teaching, like many female-dominated occupations, pays less than male-dominated occupations requiring similar professional training (Allegretto 2023). Teachers’ relative pay is especially low considering that half (49.7%) of teachers and teaching assistants in the United States have advanced degrees. In contrast, male-dominated public safety jobs tend to pay better than other jobs that do not generally require bachelor’s degrees. In part because women are overrepresented in teaching and underrepresented in public safety, they face a similar gender pay gap in the public sector as in the private sector (Table 3).

Earnings. Public-sector earnings are less unequal than private-sector earnings. In the public sector, more workers are clustered in the middle of the earnings distribution, and fewer have very low or very high earnings. Government workers at the 90th percentile of the earnings distribution earn 3.8 times what those at the 10th percentile earn. Among private-sector workers, this multiple is 4.8.

Middle-class government jobs have societal benefits that extend beyond the workers and their families. A large middle class fosters economic and social mobility and gives talented people from modest backgrounds more opportunities to contribute to society (Krueger 2012; Olinsky and Post 2013). Careful research has found that high union density decreases inequality beyond the direct effect of raising the wage floor for members (Farber et al. 2021). The likely channels for this effect are that unions support higher minimum wages and other labor standards, change social norms and workers’ expectations about pay (changes that spill over to affect even nonunion workplaces), decrease pay inequality within unionized workplaces, and generally support policies that foster economic opportunity and mobility.

How do collective bargaining rights vary across states?

The National Labor Relations Act excludes public-sector employees from coverage, leaving states to set policy on union and collective bargaining rights for public employees. Collective bargaining rights vary widely across states and for different occupations within states. This report looks at states where government workers have weak or nonexistent collective bargaining rights and compares these with states where government workers have stronger collective bargaining rights.

Collective bargaining rights can vary across several dimensions, including:

• which matters related to compensation or working conditions must be or can be discussed in bargaining
• whether bargaining is purely voluntary on the part of employers or whether employers are obligated to bargain under certain conditions, such as majority support for the union
• what steps a group of workers must take to gain or maintain recognition and/or legal certification as a recognized union for purposes of collective bargaining
• what mediation or arbitration procedures are prescribed if the two parties reach an impasse in bargaining
• whether workers have the right to strike

Researchers such as Keefe (2015) and Frandsen and Webb (2017) have found that these differences in public-sector workers’ collective bargaining rights are associated with differences in compensation. Laws governing how workers form unions and whether individual workers can opt out of paying union fees can also affect workers’ bargaining strength (Keefe 2015). In 2018, however, in its 5–4 decision in Janus v. AFSCME Council 31, the U.S. Supreme Court ruled that public-sector unions and employers could no longer negotiate agreements ensuring that all workers covered by a collective bargaining agreement are required to pay fees to cover the costs of union representation (McNicholas, Mokhiber, and von Wilpert 2018; McNicholas 2018; McNicholas, Shierholz, and Poydock 2021).

Focus of this analysis. The current analysis focuses on legal rights to collective bargaining established by statute, case law, or state constitutions. Notably though, legal rights are not the only factors that determine whether workers have the leverage to bargain for better pay and working conditions. In addition to collective bargaining and union security rights, workers’ leverage also depends on local economic and political conditions, unions’ institutional capacity, and other factors outside the scope of this report.

Evolution of public-sector collective bargaining rights. Variations in collective bargaining rights among states have historical antecedents, notably in Southern states where systemic racism contributed to the enactment of anti-union policies (Dixon 2009; Kaufman 2018; Stelzner, Hoyt, and Ramchurn 2019). With the exception of Arizona, all states that ban public-sector collective bargaining are in the South.

Since the early 20th century, public employees have organized unions and sought various means to achieve formal or informal agreements with public employers. Starting with Wisconsin in 1959, many states adopted laws codifying public employee collective bargaining rights in response to increased organizing (and in some cases, strike activity) among public employees whose demands for equal bargaining rights and improved pay and working conditions were often closely entwined with those of the 20th-century civil rights and women’s rights movements. By the 1980s, a majority of states had enacted collective bargaining policies, though these statutes varied in strength and coverage (Farber 1988). As detailed below, since 2010 these state policies have faced sustained attack, and several states, including Wisconsin, have repealed or harshly limited formerly robust collective bargaining statutes. A few states have also expanded or strengthened collective bargaining rights during this same period.

States that have recently expanded public-sector collective bargaining rights. In 2020, Virginia repudiated the South’s anti-union legacy by taking a step to expand public-sector collective bargaining rights to some local government workers (Rankin 2020; Schweitzer 2021). Since May 2021, local government bodies in Virginia can voluntarily agree to bargain with unionized workers. This opening falls short of a statewide duty to bargain, but it has quickly resulted in numerous local jurisdictions adopting collective bargaining ordinances and substantial numbers of public employees forming new unions—including, most recently, 27,000 teachers and school staff in Fairfax County (Borja 2022; Meyerson 2024).

In recent years, Maryland—where collective bargaining coverage varies by jurisdiction and occupation under a patchwork of highly fragmented collective bargaining laws—took steps to extend bargaining rights to some previously excluded public workers, including community college employees, library staff, and supervisory employees (Shwe 2022; IAMAW 2022; Albert 2024). However, repeated efforts to extend bargaining rights to graduate employees at state universities have yet to succeed (Hogan 2024).

Three Western states—Colorado, Nevada, and New Mexico—have also taken steps to strengthen public-sector bargaining rights. Nevada, where local government employees have had collective bargaining rights for decades, extended these rights to state employees in 2019 (AFSCME 2019). New Mexico overhauled its public-sector bargaining statute in 2020, including restructuring the state’s labor board system to strengthen previously weak or inconsistent enforcement of employee bargaining rights (Lewis 2020). Colorado granted collective bargaining rights to some state employees in 2020 and to some county government employees in 2022 (Hindi 2020; Metzger 2022).

Some states with strong collective bargaining frameworks in place have continued to expand coverage to occupations formerly excluded or functionally blocked from coverage. Just a few such examples include legislation extending bargaining rights to university graduate researchers and state legislative employees in California (Zhen 2017; McKinnor 2023), student employees at public universities in Washington (The Stand 2023), and various groups of Minnesota public university employees (Caputo 2024).

States weakening collective bargaining rights since 2010. Many states have weakened public-sector workers’ collective bargaining rights in recent years. In 2011, newly elected Wisconsin Governor Scott Walker championed passage of Act 10, legislation designed to severely limit public employee union rights. Act 10’s sweeping changes nullified existing public-sector collective bargaining agreements for most state and local government employees (excluding public safety workers such as police and firefighters) and created numerous administrative barriers to maintaining union membership. Among other changes, Act 10 prohibited negotiations on any subject other than base wages (while capping negotiated increases at the rate of inflation), outlawed payroll deduction of union dues, and required a new state-administered election each year in order for a local union to maintain legal certification (Malin 2012; Nack, Childers, and Ibarra 2019).

Following Wisconsin’s example, Republican statehouse majorities in at least a dozen other states passed legislation in 2011 and 2012 to substantially restrict or prohibit collective bargaining rights of some or all public-sector workers (Lafer 2013). Indiana, for example, restricted the scope of public-sector bargaining to wages and related items; Nebraska implemented an arbitration procedure that limited compensation increases unless existing compensation was lower than in comparable communities, with reduced compensation targets during economic downturns. Idaho made teacher collective bargaining contingent on a union validating that at least half of a district’s teachers were members and limited the scope of collective bargaining to a one-year agreement on compensation; Oklahoma restricted the right to organize and bargain collectively to employees of municipalities with populations above 35,000; and Tennessee officially banned collective bargaining for teachers but required school boards to engage in “collaborative conferencing” with teachers’ representatives. Michigan in 2012 also limited the scope of bargaining for teachers, weakened impasse procedures for police and firefighters, and allowed the state to declare a financial emergency to reject a contract agreement, but the state has since reversed these changes with 2023 legislation (LeBlanc 2023).

State legislative attacks on public-sector bargaining rights have continued up to the present, with hundreds of bills filed in all 50 states since 2010 (NCSL n.d.). Other notable changes enacted more recently include the following:

In 2017, the Iowa General Assembly replaced a long-standing comprehensive collective bargaining statute with legislation restricting the scope of public-sector mandatory bargaining to base wages (with wage increases capped at the level of inflation), requiring unions to undergo recertification elections each time a contract expires, and prohibiting payment of union dues via payroll deduction. Like Wisconsin’s Act 10, the Iowa law excluded public safety employees (police and firefighters) from the newly restricted scope of mandatory bargaining. For all other public-sector employees, Iowa’s new law mandates bargaining only over base wages, prohibits bargaining over other aspects of compensation like health insurance and supplemental pay, and permits but does not require bargaining over most other topics (University of Iowa Labor Center 2018).

In 2021, Arkansas prohibited collective bargaining for all state and school district employees, leaving bargaining rights in place only for police, firefighters, and other city or county employees (Herzog and Wickline 2021; Gardner 2023).

In 2023, Florida enacted legislation to severely diminish public employee collective bargaining rights after decades of serving as the exception to the rule among Southern states on public-sector collective bargaining. Florida first adopted a comprehensive collective bargaining statute in 1974, in response to a 1968 statewide teachers’ strike and strong unions flexing their muscles during the construction of Disney World (McGuire 1973; IUPAT 2017). Florida’s new law makes it more difficult for public employees to maintain union membership (prohibiting payment of union dues via payroll deduction) while simultaneously requiring unions to demonstrate at least 60% dues-paying membership or undergo “recertification” elections in order to maintain legal certification for the purpose of collective bargaining. Unions are challenging the law in court as a violation of the Florida state constitution’s guarantee that the “right of employees, by and through a labor organization, to collectively bargain, shall not be denied or abridged” (Berger 2023). Meanwhile, since taking effect July 1, 2023, the new law has already stripped union coverage from tens of thousands of Florida workers (Rivero 2024).

Overall, public-sector workers in multiple states across the country have far fewer protections today to unionize and collectively bargain than they did in 2010. And over a decade after passage, laws like Wisconsin’s Act 10 have begun to show devastating impacts on public education spending, unionization levels, and worker wages—impacts that include widening public-sector pay gaps and gender pay gaps (Nack, Childers, and Ibarra 2019; García and Han 2021; Biasi and Sarsons 2021). We should expect that the diminished strength of collective bargaining rights, especially when targeted at public workers in occupations with a disproportionate share of women and workers of color, has contributed to widening public-sector pay gaps as well as larger gender and racial pay gaps.

Classifying states by collective bargaining rights. The statistical analysis in the next section differentiates between the following: states where collective bargaining or similar negotiation over pay is banned for state and local government workers, states where such bargaining is permitted but not required, and states where employers have a duty to bargain with state and local government workers.

These rights can vary across occupations, with public safety workers and teachers often having more rights than other government workers. The analysis therefore differentiates between the following groups: public prekindergarten through high school teachers and teaching assistants (“teachers” for short), police, firefighters, other local government employees, and other state government employees.

Classifying states by collective bargaining rights is not as straightforward as it might seem. Many states lack laws on public-sector bargaining or rely on vague statutes and case law that can be interpreted in different ways. Tennessee, for example, formally bans collective bargaining for government employees but, as mentioned previously, requires school districts to engage in nonbinding “collaborative conferencing” with teachers. In many states, there is no statewide right to collective bargaining, but local jurisdictions may allow or even require it. Thus, while Maryland is classified here as a state where public-sector collective bargaining is permitted but not required for local government workers other than teachers, in practice it more closely resembles a duty-to-bargain state since the most populous jurisdictions engage in bargaining (see, for example, Montgomery County n.d.; Prince George’s County n.d.; Baltimore City Code 2010).

Table 4 shows a positive relationship between collective bargaining rights and union density. “B” (Banned) indicates states where specified groups of government workers are barred from collective bargaining. “P” (Permitted) denotes states where these workers may engage in bargaining, but there is no statewide bargaining mandate. “R” (Required) identifies states where employers have a duty to bargain with these workers. Union density, shown in the last column, is for all full-time state and local government workers, ages 18–64.

In general, stronger collective bargaining rights are associated with higher union density, but not all states fit neatly into this pattern. As shown in Table 4, South Dakota has low union density despite strong bargaining rights; Florida, Iowa, West Virginia, and Wisconsin previously had strong bargaining rights before they curbed or ended them; and Maryland’s largest jurisdictions have a duty to bargain. Virginia and Colorado recently extended collective bargaining to some workers, but efforts to organize these workers were still in early stages during the period covered by this analysis.

Table 4

How does the pay of state and local government workers compare with that of private-sector workers?

On average, in the pandemic and post-pandemic period, government workers’ weekly earnings were 17.6% lower than those of similar private-sector workers after controlling for education, age, hours worked, state, and year using regression analysis (Table 5). (The methodology appendix has the details). The public-sector pay gap was narrower but still substantial in the pre-pandemic period (-13.9%).

Table 5

Adding control variables—for race, ethnicity, and gender, as well as immigrant and marital status—reduces the government pay gap slightly, from -17.6% to -16.1% in the pandemic and post-pandemic period (Table 5). Including these variables, however, has the effect of normalizing the lower pay of women and Black workers, who are more likely to be employed in government. To the extent that the lower pay for these workers is due to discrimination rather than unobserved differences in job qualifications, controlling for race, ethnicity, and gender tends to minimize the public-sector pay gap between equally qualified workers (see the methodology appendix).

Pay gaps by education. The government pay gap is largely due to the sector’s lower pay for workers with bachelor’s or advanced degrees when compared with the private sector. In the pandemic and post-pandemic period, the pay gap is -25.7% for workers with bachelor’s degrees or more education and only -2.2% for workers without bachelor’s degrees (Table 5).

Pay gaps by race and ethnicity. As shown previously in Table 3, racial and ethnic pay disparities are much smaller in the public sector than in the private sector. These smaller racial and ethnic disparities offset some or all of the lower average pay in the public sector, so Black and Hispanic workers are paid only slightly less in the public sector than in the private sector in the pandemic and post-pandemic period (3.8% and 2.5% less, respectively). In the pre-pandemic period, there was no statistically significant public-sector pay gap for these workers (Table 5).

Pay gaps by gender. As shown previously in Table 3, women are paid much less than similarly qualified men in both the public and private sectors. Table 5 shows that women and men are both affected by lower public-sector pay. (In both tables, small differences by gender are not statistically significant.) The low pay of teachers disproportionately affects women, but male teachers are also disadvantaged by being in a female-dominated profession.

Pay gaps are wider in states with weak or no collective bargaining rights

As shown in Table 6, public-sector pay gaps are wider for government workers who have no (-22.9%) or weak (-20.1%) bargaining rights compared with those with strong bargaining rights (-14.9%). But these gaps have widened across the board since the pandemic. The biggest change was among workers with strong bargaining rights, who have lost ground since the pandemic. Even so, they continue to fare better than workers with weak or nonexistent rights.

This change, based on real (inflation-adjusted) wages, is likely due to a tight labor market where strong private-sector wage growth has roughly kept pace with inflation. Many public-sector employees are covered by collective bargaining agreements that set nominal wages over multiyear periods. If these agreements were negotiated before 2021, they would not have factored in the unusually high inflation of the post-pandemic recession recovery. That means employees covered by these agreements were locked into lower pay increases that did not keep pace with inflation. The weakening of the collective bargaining advantage could also reflect a worsening political environment for public-sector bargaining in some states, including the reality that even in some states where bargaining during this time period remained classified as “required” or “permitted” under the criteria applied in our analysis, significant changes to aspects of bargaining laws and/or practices nonetheless diminished workers’ bargaining power.

Table 6

Positive effect of strong collective bargaining on non-college-educated workers. In states with strong collective bargaining rights, workers without bachelor’s degrees actually earn 3.5% more than their private-sector counterparts because unions raise the wage floor for workers with less education (Table 6). However, this advantage has shrunk relative to the pre-pandemic period.

Positive effect of strong collective bargaining rights on Black and Hispanic workers. In states where employers are required to bargain, Black workers earn roughly the same in government as in the private sector, as lower average pay is offset by less racial pay discrimination in the public sector (Table 6). (Black workers appear to earn slightly more in the public sector—1.6% more—but the difference is not statistically significant.) Hispanic workers earn 3.9% more in the public sector in states where collective bargaining rights are strong.

Positive effect of strong collective bargaining rights for men and women. As discussed earlier, women in the public sector are disproportionately employed in teaching, an occupation in which highly educated workers are paid much less than their counterparts in historically male occupations. In contrast, male-dominated public safety occupations tend to pay better than other jobs that do not generally require a bachelor’s degree. This advantage stems from the fact that collective bargaining rights for public safety workers are often stronger than for other government workers; these jobs require more training and responsibility than many other noncollege jobs; and male-dominated occupations often pay better than female-dominated ones due to a bias against women’s work (Schieder and Gould 2016). As a result, strong collective bargaining rights reduce the public-sector pay gap for women, but not as much as for men (Table 6).

How do our findings compare with prior research?

Other studies (for an overview, see Brunner and Ju 2019) have also found that public-sector workers are paid less than comparable private-sector workers and that strong bargaining rights narrow this gap. The study by Eric J. Brunner and Andrew Ju (2019) using data from 2005–2015 found that mandatory collective bargaining rights increased public-sector pay by approximately 5–8 percentage points compared with states with weak or no public-sector bargaining rights. Our research found larger potential effects of strong bargaining rights in the pre-pandemic period but similar potential effects in the pandemic and post-pandemic period.

Though our study shares many similarities with that of Brunner and Ju, key differences explain why their findings might be considered a lower-bound estimate of the effect of legislation granting collective bargaining rights, while our pre-pandemic results might be considered an upper-bound estimate.

In an effort to isolate the effect of collective bargaining laws from other area effects on wages, Brunner and Ju compared workers who work in the same commuting zone but in bordering states with different collective bargaining laws. This statistical technique has advantages but limits the analysis to commuting zones that straddle state boundaries, which likely minimizes the effect of collective bargaining rights on wages due to spillover effects between neighboring areas.

For example, a school district in a state with weak bargaining rights that is adjacent to a state with strong bargaining rights may need to offer higher pay to attract and retain teachers than a district elsewhere in the state. Conversely, a school district across the border (in the state with strong bargaining rights) may be able to offer lower wages than a district elsewhere in that state. There may also be political spillover effects because strong public-sector unions tend to increase support for funding public services (see, for example, Han and Maloney 2019; Brunner, Hyman, and Ju 2020; Banerjee et al. 2021). Thus, well-funded schools in one district may increase support for more school funding and higher teacher pay in an adjacent district.

Brunner and Ju exclude police and firefighters in states where these workers have stronger collective bargaining rights than other public-sector workers. This might also bias their results because the union effect on pay is larger for public safety personnel than for most public-sector workers, especially those with bachelor’s or advanced degrees. In addition, Brunner and Ju include some control variables, such as population density and proximity to a coastline, that could affect their results in unforeseen ways. At least one of these variables—the Democratic Party vote share in 2008—is likely to be both a cause and consequence of public-sector collective bargaining strength. Including a variable like this will tend to minimize the effect of collective bargaining rights on public-sector wages (Angrist and Pischke 2009).

In contrast, our estimate of the effect of public-sector bargaining rights on wages may overstate the short-term impact of granting public-sector bargaining rights. This is because some of the pay differences between states with strong and weak or no rights are due to differences in state politics, which will not change overnight as a consequence of passing the federal Public Service Freedom to Negotiate Act.

In general, neither our study nor that of Brunner and Ju accounts for lagged effects of changes in public-sector bargaining laws and other factors, including inflation. Because inflation was unusually high in the early post-pandemic period, union members covered by multiyear contracts saw their real wages eroded by inflation, likely contributing to the decline in the pay advantage of union members. Thus, while our pre-pandemic estimates likely overstate the short-term impact of legislation granting collective bargaining rights because we do not control for other political factors that may be slow to change, our pandemic and post-pandemic estimates may understate the benefits of conferring bargaining rights due to the effect of inflation on the real wages of workers covered under multiyear contracts.

Both our analysis and that of Brunner and Ju include private- and public-sector workers, whether or not they belong to unions. Nonunion workers’ pay is affected by collective bargaining rights because unions are obligated to negotiate on behalf of all workers in a bargaining unit, including those who choose not to join the union. There are also spillover effects on workers outside the bargaining unit, including those in managerial positions, as employers adjust pay to preserve hierarchies. The direct effect of granting collective bargaining rights to workers who form a union is likely to be stronger than the indirect effect on workers who are not in a bargaining unit.

How does total compensation compare in government and the private sector?

Though public-sector workers usually have more generous benefits, these are not enough to close the compensation gap for most workers. According to the U.S. Bureau of Labor Statistics, employee fringe benefits were equal to 35.1% of earnings in the private sector and 59.1% of earnings in state and local government (except where otherwise noted, benefit cost estimates are based on the authors’ analysis of available BLS-ECEC 2020–2023 data for the pandemic and post-pandemic period. See methodology appendix).

This is not an apples-to-apples comparison, however, because public-sector workers are better educated, work for larger employers, and are more likely to work full time than private-sector workers. Workers with these characteristics usually have more generous benefits. However, it is difficult to adjust for these combined factors using the BLS data, especially since there is no information on worker characteristics, such as educational attainment, and only limited information on employment characteristics, such as establishment size, especially for government workers. According to BLS, however, benefits for full-time private-sector workers were 37.2% of earnings, and benefits for private-sector workers in establishments with 500 or more workers were 42.4% of earnings—less than for public-sector workers but more than for private-sector workers as a whole.

In addition, the BLS measure for public-sector worker benefits is inflated because it includes amounts going to pay down, or “amortize,” unfunded pension liabilities associated with past employment. Thus, while employer contributions toward state and local government pensions averaged 19.0% of earnings based on BLS data, the average employer share of the normal cost of these pensions was only 6.6% of pay based on the plans’ actuarial valuations (authors’ analysis of Public Plans Data 2020–2022). Unlike the BLS measure, which includes amortization payments, normal cost estimates include only the present value of future pension benefits earned by workers in the current year. Removing amortization payments therefore reduces the cost of public-sector benefits to 46.7% of pay.2

On the other hand, the BLS measure of health benefits may underestimate the full cost of these benefits since many government employers do not prefund retiree health benefits. Though some of the cost of health benefits for retirees is included in the BLS measure in the form of higher premiums for active workers with whom they are pooled, this does not capture the full cost of covering retirees if employers contribute a portion of retirees’ health insurance premiums or if future benefits are more costly as a share of payroll than current benefits. Since retiree health benefits are more common in the public sector than in the private sector, we adjust for this by adding a percentage point to public-sector benefits, putting their total benefit cost at 47.7% of pay, compared with 42.4% for private-sector workers at large establishments. Based on an earnings gap of 17.6% from Table 5, then, total compensation is roughly 14.5% lower for government workers than for comparable private-sector workers.

Collective bargaining can correct a power imbalance between workers and employers

Employment relationships almost never resemble the perfectly competitive markets described in introductory economics textbooks, where employers who pay workers a penny more than the market rate would be put out of business by competitors and those who pay a penny less would lose all their workers (Manning 2005; Ashenfelter, Farber, and Ransom 2010; CEA 2016; Bivens and Shierholz 2018). In the real world, rather than a precise, nonnegotiable market wage that adjusts quickly to changes in supply and demand, employers and workers negotiate across a range of potential wages within which neither the employer nor the worker would gain by severing the employment relationship. The employer would face significant recruiting, training, and other costs associated with hiring new workers, and the employee would face significant search and other costs associated with looking for a new job.

Another recent study shows why strengthening collective bargaining rights for public employees is especially important for correcting broader imbalances of power in concentrated labor markets. Weber Handwerker and Dey (2022) find that one reason public-sector workers are paid less despite their higher unionization rate is that school districts, hospitals, universities, state governments, public utilities, and other government entities are often the largest—or only—employment option in a given town or region for occupations like teachers, emergency room workers, professors, graduate assistants, legislative aides, utility workers, and others with specialized skills. This “monopsony power,” as economists refer to it, gives employers significant leverage in negotiating compensation, especially since many public-sector workers have invested significant time and expense in acquiring specialized skills and cannot easily switch careers. Especially in geographic areas where public employers dominate, public-sector workers’ lack of bargaining power has spillover effects on private-sector workers, including measurable downward pressure on wages.

In these real-world circumstances, collective bargaining, like a higher minimum wage, corrects a power imbalance between individual workers and employers, who generally have informational and other advantages over individual workers. Employers also often have a strong incentive to deny individual workers a raise since it may trigger higher wage demands by other workers. Employers are also reluctant to raise wages because it is difficult for morale reasons to reduce them later in response to changing economic conditions, though real wages can be gradually eroded through inflation. These factors help explain why some employers who complain about difficulties hiring workers offer hiring bonuses but are reluctant to raise wages.

Unions representing public-sector workers negotiate directly with school districts and other employers and indirectly with elected officials and the taxpayers who elect them. Politicians have an incentive to overpromise the public services they can deliver with existing revenues and to claim credit for saving taxpayers money by reducing or minimizing workers’ compensation while ignoring the effect on services. For small-government ideologues, a disgruntled workforce slowly eroded of workers with the best outside options may be seen as a desirable outcome, not a disadvantage, of limits on public-sector bargaining rights—a way to tarnish the government “brand.” For these politicians, weakening unions as a force in politics may be a goal in itself.

Public-sector workers, meanwhile, are reluctant to quit careers devoted to public service, especially with pension and other benefits designed to encourage retention. For this reason, elected officials and public-sector employers can sometimes get away with cutting pay for extended periods before facing increased turnover and difficulty recruiting new workers, or even waves of strikes, as occurred among teachers in recent years or among bus drivers working under challenging pandemic conditions in 2021 (Poydock et al. 2022). In the long run, however, the quality of public services suffers when job satisfaction and other nonmonetary rewards do not make up for the lower pay workers receive in the public sector.

In these real-world situations, closing the public-sector pay gap benefits not only workers and their families but also the general public. The broader benefits of strong public-sector unions are outside the scope of this report, but they include fostering social mobility, advocating for better public services, strengthening whistleblower protections, raising labor standards in all sectors, lowering poverty, and reducing expenditures on safety net programs (Banerjee et al. 2021).

Conclusion

Public-sector workers earned, on average, 17.6% less than comparable private-sector employees in the four years since the pandemic, a larger pay gap than in the four years leading up to the pandemic (-13.9%). The compensation of these workers—such as teachers and school staff, bus drivers, firefighters, police, state agency staff, and public university employees—is an important issue because they provide essential public services. Though public-sector workers receive more generous benefits, these are not enough to close the pay gap. Total compensation in the pandemic and post-pandemic period is approximately 14.5% lower among government workers.

Unions help narrow the public-sector pay gap. In states where employers have a duty to bargain with state and local government workers, the pandemic and post-pandemic earnings gap was -14.9%, whereas in states where collective bargaining is banned outright, the earnings gap was -22.9%. In states where collective bargaining is permitted but not required, the gap lay in between the two (-20.1%).

While a few states have strengthened public-sector bargaining rights in recent years, in more states these rights have proven precarious and highly vulnerable to political attack since 2010. The inconsistency in workers’ rights across states and the large and growing number of states where public-sector workers lack comprehensive collective bargaining rights illustrate the need for Congress to take action to guarantee a solid floor for collective bargaining rights of all public employees. In the meantime, states must cease attacks on public employees and prioritize ensuring that all workers in their states have rights at least equivalent to those guaranteed to private-sector workers under federal law.

Acknowledgments

The authors are grateful to Katherine deCourcy and Nina Mast for excellent research assistance and to Jessica Maloney and Grace Park for expert editing.

Methodology appendix

The pay analyses use eight years of pooled inflation-adjusted microdata from the U.S. Census Current Population Survey Outgoing Rotation Group (CPS-ORG) data downloaded from the University of Minnesota’s IPUMS site supplemented with weekly pay and hours data from EPI CPS-ORG microdata extracts (Flood et al. 2020; EPI 2024). Pre-pandemic observations are from March 2016–February 2020; pandemic and post-pandemic observations are from March 2020–February 2024. Observations with imputed weekly earnings are dropped from the sample for reasons explained by Allegretto and Mishel (2019) and Brunner and Ju (2019). Top-coded weekly earnings values are estimated separately by year and gender assuming a Pareto distribution, except for observations beginning in March 2023 where the Census Bureau substituted earnings based on the average weekly earnings of the top 3%.

The sample is restricted to full-time wage and salary workers between the ages of 18 and 64 who are employed in state or local government or the private sector, excluding federal government and self-employed workers. The private-sector sample includes nonprofit workers. The full-time workforce is defined as workers working 35 or more hours a week. Although the sample includes some teachers and other workers who do not work year-round, focusing on weekly earnings permits apples-to-apples comparisons.

The regression model—using the natural log of weekly earnings as the dependent variable—is based on Allegretto and Mishel’s (2019) model, with some modifications. Since the public-sector sample includes all occupations, not just teachers, the overall sample is not restricted to workers with bachelor’s degrees or more education. Likewise, the coefficient of interest is the pay difference for all state and local government workers rather than the pay difference for teachers. Similar to Allegretto and Mishel’s (2019) analysis, our analysis controls for age, including a quadratic to capture diminishing returns to experience; educational attainment (less than high school, high school, some college, bachelor’s degree, advanced degree); and state. It also controls for the year and number of hours worked, which vary even among full-time workers. Allegretto and Mishel do not control for hours worked to assuage critics who claim that teachers’ weekly hours may be overstated. While teachers, police, and firefighters report working longer hours than full-time private-sector workers, this is not true of other government workers, who tend to have slightly shorter work hours. Therefore, omitting a measure of hours worked could result in an exaggerated (not conservative) measure of the pay penalty faced by government workers.

Controls for race, ethnicity, gender, immigrant and marital status are similar to those used by Allegretto and Mishel (2019) but are not included in most regressions examining government earnings gaps. While such demographic characteristics are associated with differences in pay, these differences often reflect labor market discrimination rather than differences in job skills and qualifications. Since women and Black workers tend to be overrepresented in the public sector, in part because civil service hiring practices reduce the scope for discrimination, controlling for race and gender tends to explain away some of the public-sector pay gap. However, because pay differences associated with race, ethnicity, and gender may also reflect unobserved differences in work experience or other job qualifications—for example, if women are more likely to have taken time out of the labor market to care for young children—some researchers prefer to include these demographic controls as proxies for these unobserved differences. Key results are reported both ways to show that conclusions about the state and local government pay gap do not hinge on including or excluding these controls.

Additional regressions estimate the size of pay gaps for women and Black, Hispanic, and AAPI/other workers within each sector, and the size of the public-sector pay gap for each demographic group. These regressions also control for educational attainment, age, year, state, and hours worked.

Employee benefits and total compensation. The source for the cost of employee benefits is the Bureau of Labor Statistics Employer Costs for Employee Compensation downloaded from the BLS website for state and local government employees, full-time private-sector workers, and private-sector workers in establishments with 500 or more workers (BLS-ECEC 2020–2023—the latest available at time of writing). Benefits are adjusted to exclude supplemental pay, which is added to the earnings measure. Benefits in this report are expressed as a share of earnings, whereas those in the BLS data are expressed as a share of total compensation.

Notes

1. See Wolfe and Schmitt (2018) for a detailed profile of state and local government workers.

2. The 6.6% estimate is the participant-weighted average of employers’ normal costs in fiscal years 2020–2023 for plans in the Public Plans Database (latest available as of May 10, 2024). This is in line with figures reported in a 2021 Center for Retirement Research brief (Aubry and Wandrei 2021, Figure 2).

References

Albert, Jessica. 2024. “New Legislation Will Allow Maryland Library Workers to Form Unions.” CBS News, May 1, 2024.

Allegretto, Sylvia. 2023. Teacher Pay Penalty Still Looms Large: Trends in Teacher Wages and Compensation Through 2022. Economic Policy Institute, September 2023.

Allegretto, Sylvia, and Lawrence Mishel. 2019. Teacher Wage and Compensation Penalty Methodology. Economic Policy Institute, April 2019.

American Federation of State, County and Municipal Employees (AFSCME). 2019. “Nevada State Employees Gain Collective Bargaining Rights” (blog post). AFSCME website, June 13, 2019.

Angrist, Joshua D., and Jörn-Steffen Pischke. 2009. Mostly Harmless Econometrics: An Empiricist’s Companion. Princeton, N.J.: Princeton Univ. Press.

Ashenfelter, Orley C., Henry Farber, and Michael R. Ransom. 2010. “Labor Market Monopsony.” Journal of Labor Economics 28, no. 2: 203–210. https://doi.org/10.1086/653654.

Aubry, Jean-Pierre, and Kevin Wandrei. 2021. 2021 Update: Public Plan Funding Improves as Workforce Declines. Center for Retirement Research at Boston College, June 2021.

Baltimore City Code. 2010. Article 12, §5. Municipal Labor Relations: Labor Negotiations.

Banerjee, Asha, Margaret Poydock, Celine McNicholas, Ihna Mangundayao, and Ali Sait. 2021. Unions Are Not Only Good for Workers, They’re Good for Communities and for Democracy. Economic Policy Institute, December 2021.

Berger, Michelle. 2023. “Unions Allege DeSantis Violated Their State Constitutional Rights.” OnLabor, November 2, 2023.

Biasi, Barbara, and Heather Sarsons. 2021. “Flexible Wages, Bargaining, and the Gender Gap.” Quarterly Journal of Economics 137, no. 1: 215–266.

Bivens, Josh, and Heidi Shierholz. 2018. What Labor Market Changes Have Generated Inequality and Wage Suppression? Employer Power Is Significant but Largely Constant, Whereas Workers’ Power Has Been Eroded by Policy Actions. Economic Policy Institute, December 2018.

Borja, Mel. 2022. “How Public-Sector Workers Are Building Power in Virginia.” Working Economics Blog (Economic Policy Institute), February 18, 2022.

Brannick, Priya. 2019. The Janus Impact and Grading of State Public Sector Labor Laws. Commonwealth Foundation, August 2019.

Brannick, Priya, and Andrew Holman. 2022. The Battle for Worker Freedom in the States: Grading State Public Sector Labor Laws. Commonwealth Foundation, September 2022.

Brunner, Eric, Joshua Hyman, and Andrew Ju. 2020. “School Finance Reforms, Teachers’ Unions, and the Allocation of School Resources.” Review of Economics and Statistics 102, no. 3 (July): 473–489. https://doi.org/10.1162/rest_a_00828

Brunner, Eric J., and Andrew Ju. 2019. “State Collective Bargaining Laws and Public-Sector Pay.” Industrial and Labor Relations Review 72, no. 2 (March): 480–508.

Bureau of Labor Statistics (BLS-ECEC). 2020–2023. Employer Costs for Employee Compensation data. Accessed May 2024.

Caputo, Bianca. 2024. “PELRA Reforms Passed. What Now?” The Minnesota Daily, June 21, 2024.

Commonwealth Foundation. 2021. Public Sector Labor Law Database. Accessed May 9, 2021.

Congressional Research Service (CRS). 2014. Federal Labor Relations Statutes: An Overview. Updated September 5, 2014.

Cooper, David, and Sebastian Martinez Hickey. 2022. Raising Pay in Public K–12 Schools Is Critical to Solving Staffing Shortages. Economic Policy Institute, February 2022.

Council of Economic Advisers (CEA). 2016. Labor Market Monopsony: Trends, Consequences, and Policy Responses. October 2016.

Dippel, Christian, and Zachary Sauers. 2019. “Does Increased Union Power Cause Pension Under-Funding in the Public Sector?” (preliminary draft). September 23, 2019.

Dixon, Marc. 2009. “Limiting Labor: Business Political Mobilization and Union Setback in the States.” Journal of Policy History 19, no. 3: 313–344. https://doi.org/10.1353/jph.2007.0015.

Economic Policy Institute (EPI). 2024. Current Population Survey Extracts, Version 1.0.51, Outgoing Rotation Group sample, https://microdata.epi.org.

Farber, Henry S. 1988. “The Evolution of Public Sector Bargaining Laws.” In When Public Sector Workers Unionize, edited by Richard B. Freeman and Casey Ichniowski, 129-166. NBER and Univ. of Chicago Press.

Farber, Henry S., Daniel Herbst, Ilyana Kuziemko, and Suresh Naidu. 2021. “Unions and Inequality over the Twentieth Century: New Evidence from Survey Data.” Quarterly Journal of Economics 136, no. 3: 1325–1385.

Flood, Sarah, Miriam King, Renae Rodgers, Steven Ruggles, and J. Robert Warren. 2020. Integrated Public Use Microdata Series, Current Population Survey: Version 8.0 [data set]. Minneapolis, Minn.: IPUMS, 2020. https://doi.org/10.18128/D030.V8.0.

Frandsen, Brigham R., and Michael Webb. 2017. “Public Employee Pensions and Collective Bargaining Rights: Evidence from State and Local Government Finances.” Hutchins Center Working Paper no. 35, Brookings Institution, October 2017.

García, Emma, and Eunice Han. 2021. The Impact of Changes in Public-Sector Bargaining Laws on Districts’ Spending on Teacher Compensation. Economic Policy Institute, April 2021.

Gardner, Olivia. 2023. How Arkansas Educators Lost Their Bargaining Rights. Arkansas Advocates for Children and Families, March 2023.

Han, Eunice S. 2019. “The Impact of Teachers Unions on Teachers’ Well-Being Under Various Legal Institutions: Evidence from District–Teacher Matched Data.” American Educational Research Association 5, no. 3 (August). https://doi.org/10.1177/2332858419867291.

Han, Eunice S., and Thomas N. Maloney. 2019. “Teacher Unionization and Student Academic Performance: Looking Beyond Collective Bargaining,” Labor Studies Journal 46, no. 1 (October). https://doi.org/10.1177/0160449X19883373

Herzog, Rachel, and Michael Wickline. 2021. “New Laws in State Hold Restrictions, Loosen Some Reins.” Arkansas Democrat Gazette, July 25, 2021.

Hindi, Saja. 2020. “Colorado State Workers Can Now Bargain for Pay, Benefits; Gov. Jared Polis Signed Bill Giving Union New Powers Tuesday.” Denver Post, June 16, 2020.

Hogan, Jack. 2024. “After Collective Bargaining Wins, MD Unions to Push for Binding Arbitration.” The Daily Record, April 26, 2024.

International Association of Fire Fighters (IAFF). n.d. “Collective Bargaining” (web page). Accessed May 2024.

International Association of Machinists and Aerospace Workers (IAMAW). 2022. “Machinists Union Supports Maryland House Legislation Giving Harford County Library Workers the Right to Collectively Bargain.” IAM News, February 24, 2022.

International Union of Painters and Allied Trades Local 1010 (IUPAT). 2017. “Commemorative 100-Year History and Anniversary Celebration Program Book.”

Kaufman, Dan. 2018. “A Labor Day Reflection on Unions, Race, and Division.” New Yorker, September 3, 2018.

Keefe, Jeffrey. 2015. Laws Enabling Public-Sector Collective Bargaining Have Not Led to Excessive Public-Sector Pay. Economic Policy Institute, October 2015.

Krueger, Alan B. 2012. “The Rise and Consequences of Inequality in the United States.” Speech at the Center for American Progress, January 12, 2012. Charts: https://www.slideshare.net/whitehouse/the-rise-and-consequences-of-inequality-in-the-united-states-charts.

Lafer, Gordon. 2013. The Legislative Attack on American Wages and Labor Standards, 2011–2012. Economic Policy Institute, October 2013.

LeBlanc, Beth. 2023. “Whitmer Signs Laws Boosting Teacher Union Rights at Bargaining Table.” Detroit News, July 26, 2023.

Lewis, C.M. 2020. “The Stunning Workers’ Victory in New Mexico That You Haven’t Heard About.” In These Times, December 22, 2020.

Malin, Martin H. 2012. “The Legislative Upheaval in Public-Sector Labor Law: A Search for Common Elements.” ABA Journal of Labor & Employment Law 27, no. 2: 149–164.

Manning, Alan. 2005. Monopsony in Motion: Imperfect Competition in Labor Markets. Princeton Univ. Press.

Martinez Hickey, Sebastian, and David Cooper. 2023. “The School Bus Driver Shortage Remains Severe: Without Job Quality Improvements, Workers, Parents, and Children Will Suffer.” Working Economics Blog (Economic Policy Institute), November 15, 2023.

McGuire, Raymond G. 1973. “Public Employee Collective Bargaining in Florida—Past, Present and Future.” Florida State University Law Review 1, no. 1: 28–130.

McKinnor, Tina. 2023. “California Legislative Staff Unionization Signed into Law” (press release). October 7, 2023.

McNicholas, Celine. 2018. “Janus Decision Is Not About Union Finances—It’s About Working People’s Finances.” Working Economics Blog (Economic Policy Institute), June 27, 2018.

McNicholas, Celine, Zane Mokhiber, and Marni von Wilpert. 2018. Janus and Fair Share Fees: The Organizations Financing the Attack on Unions’ Ability to Represent Workers. Economic Policy Institute, February 2018.

McNicholas, Celine, Lynn Rhinehart, Margaret Poydock, Heidi Shierholz, and Daniel Perez. 2020. Why Unions Are Good for Workers—Especially in a Crisis Like COVID-19: 12 Policies That Would Boost Worker Rights, Safety, and Wages. Economic Policy Institute, August 2020.

McNicholas, Celine, Heidi Shierholz, and Margaret Poydock. 2021. Union Workers Had More Job Security During the Pandemic, but Unionization Remains Historically Low: Data on Union Representation in 2020 Reinforce the Need for Dismantling Barriers to Union Organizing. Economic Policy Institute, January 2021.

Metzger, Hannah. 2022. “Polis Signs Collective Bargaining, School Funding, Dozens of Other Bills.” Colorado Politics, May 27, 2022.

Meyerson, Harold. 2024. “Teachers in the South Go Union.” The American Prospect, June 18, 2024.

MissionSquare Research Institute. 2023. State and Local Government Employment Trends, 2023 (issue brief). May 17, 2023.

Montgomery County. n.d. Article VII. County Collective Bargaining.

Nack, David, Michael Childers, and Armando Ibarra. 2019. “The Recent Evolution of Wisconsin Public Worker Unionism Since Act 10.” Labor Studies Journal 45, no. 2: 147–165.

National Conference of State Legislators (NCSL). n.d. Collective Bargaining database. Accessed May 2024.

National Council on Teacher Quality (NCTQ). 2019. “Collective Bargaining Laws” database. Updated January 2019.

National Education Association (NEA). 2020. “Collective Bargaining Laws for Public Sector Education Employees,” November 2020 (unpublished document used by permission).

New Mexico Public Employee Labor Relations Board. 2023. Public Sector Collective Bargaining by State.

Olinsky, Ben, and Sasha Post. 2013. Middle-Out Mobility: Regions with Larger Middle Classes Have More Economic Mobility. Center for American Progress, September 2013.

Poydock, Margaret, Ihna Mangundayao, Celine McNicholas, and John Schmitt. 2022. Data Show Major Strike Activity Increased in 2021 but Remains Below Pandemic Levels. Economic Policy Institute, February 2022.

Prince George’s County. n.d. Section 908—Right to Organize and Bargain Collectively.

Public Plans Data, 2020–2022. Center for Retirement Research at Boston College, MissionSquare Research Institute, National Association of State Retirement Administrators, and Government Finance Officers Association. Accessed April 2024.

Rankin, Sara. 2020. “Virginia Lawmakers OK Limited Public Sector Bargaining Bill.” AP News, March 8, 2020.

Rivero, Daniel. 2024. “Tens of Thousands of Workers in Florida Have Just Lost Their Labor Unions. More Is Coming.”WLRN Public Media, February 16, 2024.

Rothstein, Richard. 2017. The Color of Law: A Forgotten History of How Our Government Segregated America. New York: Liveright.

Rueben, Kim. 1996. Extended NBER Public Sector Collective Bargaining Law Data Set. Downloadable data available at www.nber.org/research/data/nber-public-sector-collective-bargaining-law-data-set (see last paragraph on this web page).

Sanes, Milla, and John Schmitt. 2014. Regulation of Public Sector Collective Bargaining in the States. Center for Economic and Policy Research, March 2014.

Schieder, Jessica, and Elise Gould. 2016. “Women’s Work” and the Gender Pay Gap: How Discrimination, Societal Norms, and Other Forces Affect Women’s Occupational Choices—and Their Pay. Economic Policy Institute, July 2016.

Schweitzer, Ally. 2021. “Many Virginia Workers Will Get a Pay Raise and More Labor Rights Starting May 1.” DCist, May 1, 2021.

Shwe, Elizabeth. 2022. “USM Graduate Students Fight for Collective Bargaining Rights.” Maryland Matters, January 28, 2022.

The Stand. 2023. “Right to Unionize Codified for WA Academic Student Employees” (website), April 24, 2023.

Stelzner, Mark, Eric Hoyt, and Toushita Ramchurn. 2019. “Structured Conflict: Changes in Federal and State Labor Laws and Strike Activity, 1950 to 2017.” University of Massachusetts Amherst Political Economy Research Institute Working Paper, updated July 2019.

University of Iowa Labor Center. 2018. Quick Guide to Understanding Public Sector Bargaining Under Iowa’s New Law. February 2018.

Valletta, Robert G., and Richard B. Freeman. 1988. “The NBER Public Sector Collective Bargaining Law Data Set.” Appendix B in When Public Employees Unionize, edited by Richard B. Freeman and Casey Ichniowski. NBER and Univ. of Chicago Press.

Weber Handwerker, Elizabeth, and Matthew Dey. 2022. “Some Facts About Concentrated Labor Markets in the United States.” U.S. Department of Labor, Bureau of Labor Statistics (BLS) Working Paper no. 550, June 2022.

Wolfe, Julia, and John Schmitt. 2018. A Profile of Union Workers in State and Local Government: Key Facts About the Sector for Followers of Janus v. AFSCME Council 31. Economic Policy Institute, June 2018.

Zhen, Sharon. 2017. “New Law Allows Graduate Student Researchers to Unionize.” Daily Bruin, October 31, 2017.

In 2023, almost half of U.S. K–12 students were Black, Hispanic, or AAPI, while only a quarter of teachers identified in the same way (Figure A). This large disparity has major implications for education policy. 

Figure A

Improving teacher diversity leads to better student outcomes 

Research links same-race teachers to better educational outcomes for students. Cheng (2017) finds that increasing the representation of Black teachers “even by a single percentage point” is associated with lower suspension rates among Black high school students. Lindsay and Hart (2017) find that exposure to same-race teachers is associated with reduced rates of exclusionary discipline (out-of-school suspensions, in-school suspensions, and expulsion) for Black students in elementary, middle, and high school. Same-race teacher matches are also associated with lower high school dropout rates and greater college aspirations. Gershenson, Hart, Lindsay, and Papageorge (2017) estimate that exposure to a same-race teacher during elementary school not only reduces the high school dropout rate by 39% for the most economically disadvantaged Black male students, but also increases the likelihood that persistently low-income students aspire to attend a four-year college and take a college entrance exam.  

Moreover, same-race teachers are shown to improve test scores at magnitudes that could potentially help close the Black-white achievement gap. Egalite, Kisida, and Winters (2015), for example, find that same-race teacher matches have demonstrable impacts on test scores in math and reading for both elementary and middle/high school students, but at greater magnitudes for Black students relative to white students. This suggests that if the racial composition of teachers moved closer to the racial composition of the students they teach, one would likely see a measurable decline in the test score gaps between Black and white students.

Same-race teachers can also improve outcomes that may be more difficult to quantify numerically. Egalite and Kisida (2017) find that middle school students who are assigned to teachers of the same race report higher personal effort, happiness in class, feeling cared for and motivated by their teacher, and higher quality of student-teacher communication.

Figure B shows the difference in shares of teachers and students, for each educational category, by race and ethnicity in 2023. A positive difference indicates that the share of teachers in a given racial group is larger than the share of students in that same group. From Pre-K through high school, the figure shows that the share of white teachers exceeds the share of white students by 22.1 to 27.7 percentage points. The figure also shows that Black, Hispanic, and AAPI teachers in all schooling levels are underrepresented relative to the shares of students from those racial and ethnic groups. This demographic mismatch is largest for Black and Hispanic high school teachers and students. For example, the share of Black teachers is 7.6 percentage points lower than the share of Black students in high school, while the share of Hispanic teachers is 15.8 percentage points lower than the share of Hispanic students in high school. Of all the groups, the differences in the share of teachers and students are smallest for AAPI students across all levels of schooling.

Figure B

Taken together, this array of benefits for students of same-race teacher matches underscores the importance of recruiting more teachers of color as part of any effort to address the national teacher shortage and reduce racial disparities in academic outcomes. Further, raising pay for teachers and increasing the representation of teachers of color today could help ease any future shortage of teachers by making the teaching profession more attractive to students of color making career decisions in the next two decades.

Public schools, especially schools that serve students of color, are facing severe staffing shortages that threaten students’ ability to learn. Even with the staffing improvements made possible by COVID-related fiscal relief, CPS per-pupil spending levels are not sufficient to meet recognized educational adequacy benchmarks. CPS’s 2025 budget should target maintaining recent spending levels to support the recruitment and retention of qualified staff, particularly in low-income neighborhoods and schools that serve students of color.

Maintaining school staffing with COVID relief funds was essential to student learning during the pandemic

There were three tranches of ESSER funds. Two were distributed in 2020, but the largest by far was ESSER III, with a total of $122 billion allocated to districts around the country as part of the American Rescue Plan in 2021. School districts were given tremendous latitude in exactly how they wanted to spend that money, but ESSER’s central intent was to improve student learning outcomes. Among its key purposes was a mandate to “address the significant academic, social, emotional, and mental health needs of their students” and to “address the disruptions to teaching and learning resulting from the pandemic.” ESSER III funds must be spent by the end of January 2025, and CPS has already spent 88% of the $1.86 billion it received. This relief, along with additional COVID funding from the American Rescue Plan and the governor’s Emergency Relief fund, amounted to $3,428 per student in 2021, allowing for a 23% increase in per-pupil spending for elementary and secondary education in CPS.

One of the most pressing challenges facing schools over the past few years has been staff shortages. Schools nationwide shed more than 700,000 staff—almost 10% of their entire workforce—during the first two months of the COVID pandemic, as schools shut down and public revenues declined. It took more than three years for numbers to recover, but significant shortfalls still remain. Further, the stresses on student achievement imposed by the pandemic almost surely require higher per-pupil resources in coming years than pre-pandemic standards.

One of the key reasons for persistent staffing shortages in schools has been that pay for educators has failed to keep up with other jobs. Teacher wages are 26.4% below the incomes of similarly educated workers in other industries, and wages of bus drivers and food service workers are substantially below the median worker’s wage. Schools that service majority students of color are more likely to face staff shortages than schools in predominantly white neighborhoods.

Staff shortages in schools are most harmful to students from low-income families. EPI has shown that schools with a higher share of low-income students need more staffing—including more counselors, teachers, nurses, and classroom aides—to provide an adequate education compared with schools in high-income areas.

ESSER funds were well-suited to help school districts address staffing shortages. The key purpose of ESSER was to support student learning, and hiring new staff and retaining current staff are integral to that purpose.

Chicago Public Schools should maintain needed investments in staffing

Given that 76% of CPS students come from low-income families, CPS’s decision to spend nearly half of its ESSER funds on staffing was the right choice. Importantly, this spending did not just maintain existing staff levels. While just 37% of school districts nationally used ESSER funds to create new staffing positions, CPS has added more than 5,000 staff over the past four years. Chicago students were well-served by having more staff, including hundreds of tutors and instructional coaches.

Between 2019–2024, CPS increased staffing in every category. They more than doubled the number of social workers, from 308 to 691. They doubled nurses, from 322 to 661. They created a new position—advocates for students experiencing housing insecurity—and hired 50 of them. They created 306 new case manager positions to coordinate work with students who needed additional help. They also added 575 new custodians, 169 counselors, and more than quintupled the number of instructional coaches, going from 47 to 259.

The wisdom of CPS’s investments in these personnel has been borne out by academic research showing how strongly Chicago students have recovered from the pandemic. According to analysis of large urban school districts nationwide by the Council of Great City Schools, Chicago students were ranked first in reading and 13th in math. While most school districts nationwide are still below their pre-pandemic levels in reading, Chicago is doing better than it was in 2019. The results were even better for Black and Hispanic students. This is a remarkable achievement that shows the importance of increased staffing supports for students. Other research looking at districts across the country shows that federal pandemic relief for education was highly effective for aiding student achievement during the post-pandemic period.

Even with extra relief funding, Chicago Public Schools spending is not adequate

The temporary surge of ESSER funds provided a welcome boost to educational spending in Chicago, but per-pupil spending is still below funding levels required to provide an adequate education. In addition to providing basic funding for instruction, strong school systems try to compensate for factors beyond a state’s control that nevertheless impact a student’s education, such as student poverty or labor costs, by diverting funding into areas that need it the most. Under this principal of school finance, for a given outcome goal such as the average score on a standardized test, funding should be allocated based on student population need and the surrounding labor market and community, with more money going to higher poverty districts and less money going to wealthier districts. New data on school finance adequacy compares actual per-pupil spending with estimated per-pupil spending levels needed for the district to achieve the common benchmark of national average test scores. In 2021, the most recent year we have data from the National Center for Education Statistics, CPS was able to raise their per-pupil spending by 23% from $14,788 to $18,216 with COVID relief spending, of which the ESSER program funded the majority. Yet, this still falls short of adequacy benchmarks estimated by researchers ($21,000 per pupil in Chicago). This adequacy measure provides key context for calls to continue spending at least at levels made possible by federal relief.

ESSER funds allowed Chicago Public Schools to not just weather the pandemic but also strengthen the school system and improve outcomes for children. The end of ESSER funds should not lead CPS to change directions. CPS students, especially those in low-income parts of the city, need adequate staffing to have the best chance at a good education. CPS should continue its focus on recruiting and retaining qualified educators.

Key findings:

• New School Pulse Panel data show that educators’ feelings of being understaffed fell by eight percentage points in the past year, suggesting an improvement from pandemic heights of understaffing stress amid a widespread teacher shortage.
• Some improvement in feelings of being understaffed may be linked to American Rescue Plan (ARP) funds. SPP data show that 37% of public schools created positions with ARP funds.
  • Of these schools, 15% created positions for academic interventionists, 14% for mental health professionals, and 6% for academic tutors.
• But disparities filling teaching vacancies remain: While difficulty filling vacancies declined in majority white schools and in schools in higher-income neighborhoods, it increased in schools in lower-income neighborhoods and in schools with greater than 75% minority students.

The COVID-19 pandemic greatly exacerbated a long-standing and widespread teacher shortage in schools. By mid-2022, several indicators of teaching shortages and staffing stress were at record highs. Recent data from the School Pulse Panel (SPP) show that understaffing stress in schools has relented somewhat in the past year, though progress remains modest and uneven. The SPP also indicates that funding from the American Rescue Plan (ARP) has helped close some of these staffing gaps and address pressing needs in the nation’s schools.

While schools have been struggling to fill vacancies long before the pandemic due to chronic low pay and compensation, the stress of teaching during the pandemic made the teacher shortage even worse. A RAND 2022 report showed that 73% of teachers reported having “frequent job-related stress” compared with 35% of working adults, which can contribute to otherwise qualified potential teachers taking positions in other fields. This degradation of non-wage-related working conditions means that schools need to pay teachers more to retain them and adequately staff schools, yet this salary increase has not happened. In 2022, the teacher pay penalty—the gap in pay between teachers and similarly educated workers in other professions—hit a new high of 26.4%.

New School Pulse Panel data allow us to assess how school staffing has fared in the aftermath of the pandemic. Administered by the National Center for Education Statistics, the SPP has sampled school and district staff on a monthly basis since 2021. In August 2023, they surveyed 3,998 public elementary, middle, and high schools about staffing needs. Given the long-standing teacher shortage, the latest SPP data can be seen as an indicator of how effective the nation has been in alleviating long-run school staffing stress over the past year.

Figure A shows the percentage of schools that feel their school is understaffed entering the school years in August 2022 and 2023, including by the share of students that are in a minority group and by neighborhood poverty. (Note: we use the term “minority students” to be consistent with the terms used in the SPP survey.) The figure shows that feelings of being understaffed improved between 2022 to 2023, falling by eight percentage points. The improvement was relatively widespread, holding regardless of the share of minority students in the school. Feelings of being understaffed also declined in schools with lower neighborhood poverty, but there was no change in schools with higher neighborhood poverty.

Figure A

The overall improvement may, in part, be linked to the Elementary and Secondary School Emergency Relief funds provided through the 2021 American Rescue Plan (ARP). These funds—$122 billion in total—were intended to help PreK–12 schools safely reopen and to tackle learning loss and mental health challenges brought on by the pandemic. Figure B shows that 37% of schools surveyed in August 2022 reported that they created positions for the 2022–2023 school year using ARP funds. Of these schools, 15% created positions for academic interventionists, 14% created positions for mental health professionals, 7% created positions for special education, 7% created positions for instructional coaches, and 6% created positions for academic tutors. The creation of jobs using ARP funds was fairly similar across schools regardless of the school’s share of minority students or neighborhood poverty.

Figure B

Unfortunately, the ARP did not solve shortages in certified teachers, and disparities in the extent of these shortages persist across schools. Figure C shows the percentage of public schools that experienced difficulty filling at least one teaching position entering the school years in August 2022 and 2023. Difficulty in filling vacancies declined slightly from 80% to 79% between 2022 and 2023. Underlying this modest decline, however, are larger declines in schools with less than 75% minority students and in schools in lower poverty neighborhoods. By contrast, schools with greater than 75% minority students experienced a six-percentage-point increase in difficulty filling teaching positions, and schools in higher poverty neighborhoods also experienced a four-percentage-point increase in difficulty. These findings suggest that long-standing disparities in teacher quality may have exacerbated over the last year, in which high-poverty schools suffer the most from a lack of credentialed teachers.

Figure C

Taken together, the results suggest that while schools are rebounding from the pandemic in terms of staffing overall, improvements in the teacher shortage have been felt unevenly, with schools that are majority white and in high-income neighborhoods seeing larger improvements. A shortage of qualified teachers threatens students’ ability to learn and reduces teachers’ effectiveness. When the shortage is distributed so unevenly among students of different socioeconomic backgrounds, it hinders the U.S. education system’s goal of providing a sound education equitably to all children.