What Teachers Are Worth

My childhood ended on the afternoon I tried to sell a Tony Fernandez rookie card. Dad had driven me to the next town over because I was hoping to complete a set of 1985 Topps baseball cards. I was six short, and in those pre-Internet days, the only way to get your hands on missing singles was to trade for them or buy them. I was going to buy mine and Dad, to his credit, had elected to not intervene. This was my ballgame.

I had a stack of cards to sell, the idea being I’d make five or six bucks unloading a pile of unwanted duplicates and then turn around and buy the ones I needed with the cash. I’d done the math. Any card collector of the era either had Beckett Baseball Card Monthly prices memorized or carried around the most recent volume. Beckett said my Tony Fernandez was worth 50 cents. So I started by offering him up.

The owner of the store, a gruff middle-aged fellow with a bushy mustache who stood opposite me behind a display case of Mantles, Koufaxes, and a Tom Brunanski I coveted, peered down at the rangy Blue Jays shortstop. Then he dismissed him, sliding the card to the side and considering the next one, which he also rejected.

“I’ll give you a dollar for the lot,” he told me, which made no sense to ten-year-old me. Beckett said that Tony Fernandez was worth two quarters by himself!

Back in the car on the ride home, Dad explained to his crestfallen, teary-eyed son how the world of baseball cards (and everything else) really worked.

“It doesn’t matter what the magazine says the card is worth,” he explained. “Something is only worth what someone else is willing to pay for it.”

Many people have opined on what teachers are worth. Two of the most determined are Andrew Biggs, a resident scholar at AEI, and Jason Richwine, a public policy analyst in Washington, D.C. Together, they have repeatedly argued that teachers are overcompensated, penning reports and articles with titles like:

No, Teachers Are Not Underpaid

Public School Teachers Aren’t Underpaid

The ‘Underpaid Teachers’ Myth

The Truth About Teacher Pay

Average Public School Teacher Is Paid Too Much

They make many arguments, some of them compelling, but the main one is that teachers don’t have skills that society values and are therefore overpaid. If they were subjected to the laws of supply and demand instead of protected by government and their unions, they’d earn much less. Here they are in their own words:

“The average teacher working in a public school today receives total compensation roughly 52 percent higher than what he or she would receive in private-sector employment.”

“Prospective teachers are predominantly drawn from the bottom third of their college graduating class. Compared with those of college graduates with similar skills, teachers’ average annual salaries of around $55,000 are about right. It is generous fringe benefits that push total teacher compensation far ahead of private-sector levels.”

“Wages are not determined by years of schooling but by the supply and demand for skills. These skills vary by field of study. About half of teachers major in education, among the least-rigorous fields at both the undergraduate and graduate levels.”

“The Bureau of Labor Statistics (BLS) analyzes the skill requirements of different jobs, assigning each a pay grade based on the federal government’s General Schedule (GS). At the lowest skill levels—a GS-6 on the federal scale—teachers earn salaries about 26 percent higher than similar white-collar workers.” 

“Contrary to myth, teachers are generally not foregoing higher salaries by staying in the classroom. Data from the Survey of Income and Program Participation show that teachers who change to non-teaching jobs take an average salary cut of about 3 percent.”

Ignoring the many problems with Biggs and Richwine’s methodology and analysis, which others have written about here, here, and here, the error which begets all others is the authors’ myopic focus on the relationship between compensation and skill.

That people are willing to pay a premium to those possessing certain skills is not in question. That these skills actuate supply and demand is similarly self-evident.

Because most people cannot safely perform open-heart surgery, patients will pay almost any amount to surgeons. Because my freedom is priceless, I’ll shell out hundreds of dollars an hour to a lawyer for her specialized knowledge of the law and legal procedures. Companies will pay high salaries to software developers and engineers because demand outpaces supply.

By this standard, the one Biggs and Richwine fixate on, teachers do in fact appear overpaid.

But as my Tony Fernandez baseball card experience taught me, what something is worth depends on what someone else will pay for it. And people do not only pay for skill.

My neighbor is retired and very active. He rides a bike every day and even goes on cross-country cycling trips. But he doesn’t mow his own lawn. For that, he pays a local teenager $25 for a job that takes about 30 minutes.

I have a friend who decided to remove the wallpaper from her house. She did half of one room and then decided to pay thousands of dollars to have a company come in and finish the job.

Roofing, while back-breaking, is not especially difficult. It does not require a college degree or hours of training. But most people overpay to have someone else reshingle their house.

People pay to have their groceries delivered, their cars washed, and their toenails painted.

People will pay for services they can’t do themselves, but they will also pay for services they are unwilling to do themselves, regardless of the skill needed to do them.

And they will pay a lot.

Consider the cost of child care. Child care, of which most parents expect little more than their kid be returned safely to them at the end of each day, is prohibitively expensive for many families, despite the “low skill” of providers. Cost varies significantly by state, but the average for the United States is about $10,000 per year.

Or how about babysitting? Certainly, nobody needs a babysitter. Babysitters do not have skills prized in the marketplace. They’re usually teenage girls looking for a few extra bucks. But what are you willing to pay such a skills-deficient laborer so you can have a night out? 10 bucks an hour? 20? According to UrbanSitter’s survey of 28,000 families, the average babysitting rate is $16.75 for one child and $19.26 for two.

To put that in perspective, a teacher with 25 students in her room, who, you might need reminding, is expected to both watch over kids and teach them stuff, would earn almost a quarter-million dollars a year, and that’s if she were only paid $10 an hour (180 days x 5 hours/day (I rounded down, taking out lunch, etc.) x 25 students x $10/hour = $225,000). That’s about $9,000 per student per year.

The market, it seems, has spoken. And it values child care, low-skill or not.

But of course school isn’t just about supervision. Education also has value. And again, when exposed to market principles, it’s expensive.

Private tutors cost anywhere from $25 to $80 an hour.

The average cost of an elementary private school is about $10,000, which, again, in a class of 25 students comes out to a quarter of a million bucks. Not all of that money goes to the teacher — private schools have administrators and overhead, too — but in the mind of the parent who is paying the bill, they are trading $10,000 for the service provided by the school, most of which is performed by the teacher.

The cost of college also proves how much value parents place on education. Even with states kicking in major taxpayer dollars, the average yearly tuition at an in-state public university costs families — you guessed it — about $10,000. Those arguing teachers would be paid less if they were subject to the merciless forces of capitalism should have to explain why the cost of attending a private college in the United States is more than $36,000 annually, with 120 schools charging over $50,000 last year.

A pet argument among the public-school-teachers-are-overpaid crowd is that private school teachers, who basically do the same job, make far less money. Because private schools are at the mercy of the market, so the argument goes, their salaries are true reflections of what all teachers are worth. But private school teachers aren’t paid less because parents don’t value their work. The fact they’re willing to pay ten grand a year proves that. They’re paid less for the same reason child care workers are paid poorly: low adult to child ratios.

Private schools average a 12:1 student to teacher ratio, compared to 16:1 in public schools. States restrict the number of children a licensed child-care provider can supervise, meaning all that money parents pay gets divvied up among a whole lot of adults, lowering the pay for each of them. If public schools followed suit, their teachers would indeed be paid less. But you’d need a bunch more of them and costs would likely rise as increased turnover would lead to higher training expenses, so taxpayers wouldn’t really gain anything.

Watch: Why Does Child Care Cost So Much Yet Providers Make So Little? | Child Care Aware of America

Those who believe public school teachers are overpaid like to blame the government and teachers unions. They believe that if teachers had to compete in the marketplace like other workers, their pay would reflect what they’re actually worth.

But evidence suggests the opposite.

Parents are willing to pay a premium for others to watch their kids. They’re willing to pay a lot for their kids to receive an education. Government’s involvement does not inflate teachers’ salaries. If anything, it depresses them. In a totally free market, the cost of elementary education would look a lot like the cost of child-care. Or college. Or even babysitting.

To slightly rephrase the lesson on capitalism my ten-year-old self received from my dad:

It doesn’t matter what economists, public policy analysts, and “resident scholars” say teachers are worth. It matters what parents are willing to pay.

And unlike that stingy baseball card dealer who destroyed the innocence of my youth, they’re willing to pay quite a lot. It’s the generosity of taxpayers that prevents them from doing so.

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